Discounting can be a touchy subject. Sales people often claim that discounts are required to make the sale. Pricing is philosophically opposed to discounts as they undermine profitability and signal lack of pricing power. Marketing worries about how discounts will impact value perception but at the same time desire the increased attention that a well-managed discount campaign can generate. Ouch. How do you manage all of these different imperatives?
The freemium revenue model is the go-to-market strategy for many web-based software solutions. Unfortunately, it can turn into a costly trap for the service provider. We saw this happen in June of this year with the Photobucket freemium to fee-based service migration debacle. Let's delve into what went wrong with Photobucket's fee introduction and contrast this with the lessons to be learned from Meetup's successful migration to a paid subscription model.