Christopher Carfi

In case you haven’t seen it, here’s a link to Fred Wilson’s description of the “Freemium” business model.

Now let’s segue from there to another reason why freemium really makes sense. Erik Keller at SandHill writes:

“Now this approach may be seen as foolhardy by those who believe that products are always sold rather than just bought. This assertion, however, must be reexamined in the light of rampant license-fee discounting as well as the fact that [a typical enterprise software company] spends over 90 percent of its license fee revenue on sales and marketing expenses. The reality in enterprise software is while most companies do not give away their software, they might as well, given the cost of sales as well as market conditions.” (emphasis added)

I had to reread that paragraph a couple of times to really grok it, but Erik is spot-on: many companies could, arguably, eliminate their “traditional” sales and marketing expenditures, give their products away for free, and still do just about the same on the bottom line.

Put another way…what if your company could turn its sales model on its head, and respond to customer pull, versus selling and marketing via “push?”

(Bonus quote from Erik, from the same article: “When a value-oriented buyer’s point of view is taken, the core of this inefficiency becomes obvious. From an income-statement perspective, the cost of delivering a product and service as well as R&D are customer value-adds: buyers get something direct and of value from these costs. On the other hand, sales and marketing as well as general & administrative expenses are seen as valueless to the buyer. They represent the overhead that a vendor needs to engage the market.”)

Yes, RSS and feeds are where things are going. That said, the pragmatic folks over at FeedBurner have enabled enhanced email subscription capabilities for blogs. From Burning Questions:

“It turns out that not everybody is quite ready to ditch the old Inbox just yet. People like to be notified when their favorite publishers have something new posted, but a large audience still finds the familiar setting of email to be the most comfortable and reliable way to receive updates. We initially announced feed-by-email support back in October. Since then, we have been asked by a number of our publishers to integrate our own feed-powered email update service, and we are the kind of people who do what is asked of us, if the question is asked nicely, in lower case, with a minimum of question marks.”

FeedBurner actually has three email delivery options: their own, one via FeedBlitz, and another via Squeet.

A quick test run of the service showed it’s easy to set up, and seems to work as advertised. Good job, FeedBurner people!

You can try it here, if you want.

Enter your email address:

(Email subscription is now a feature of the Social Customer Manifesto sidebar as well.)