Thursday, May 28, 2009

Freemium?

As most of you know, the Fast Pitch! business model is different than most social networks who rely almost entirely on advertisers to support their operations. In fact, advertising on our network (although quite effective for the few advertisers we've decided to work with) accounts for less than .001% of our annual sales.


Instead, we have decided to run our business as a 'Freemium' business, which gives our users a free account to get started... and the option to upgrade to a higher level of service for a monthly fee. Since launching in July 2006, we've stayed the course and refused to give in to the notion that people will not pay to belong to an online network. Despite pressure from hundreds of 'fly by night' ad supported, free networks popping up everyday, our Freemium model has continued to be successful. Here's a few reasons why:

  1. Paid membership levels create a HEIRARCHY within the community - Paid members have the largest footprint across the network by virtue of a higher ranking across all searches and the ability to make the most connections and grow their network. Combined, these two factors bring more attention to the paid members who eventually become viewed by the network as experts. Over time, members with such an elevated status are presented with more opportunities... and obviously more business.

  2. We Offer VALUE. Quite frankly, we offer a better product that helps you grow your network, market your business... and best of all... saves you money! In many cases, we've commoditized other services you may be paying for a la carte from third-party vendors. For example, to post a press release on other PR websites it can cost as much as $300 per press release... whereas, for as little as $7 per month Fast Pitch! members can post an unlimited number of press releases each month... and do many things with that press release that are not possible without a network (i.e. audience).

    Another example is our email marketing service (3Step Contact) which as part of a $7 per month membership our memebrs receive a full-featured email marketing tool that allows you to create, send and track email newsletters to your existing contacts. For a similar service, many people spend $25 - $200 per month with third-party platforms.

  3. Membership creates ACCOUNTABILITY. People who pay even a nominal amount of money for a service are more likely to use it. Overtime, more paying members creates a more vibrant network which generates a higher response rate for everyone on the network... which leads to a larger, tighter network, and so on. The converse of this is a very large network with millions of inactive profiles and no paying members with no accountability, where messaging among members falls on deaf ears (Twitter anyone?)

Since the summer of 2006, we've stayed true to this Freemium philosophy as the number of paid members on our network continues to grow every month since we launched. Our Freemium model has been so successful that we have turned away countless numbers of advertisers whose product or service had little relevance to our community. In other words,

if your product is not business-related and does not help our members save money and become more efficient, do not bother contacting us about advertising



Bill

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