Wednesday, 9 November 2016

New pricing model: premium users are no longer paying for free users

TL;DR our pricing model is changed from freemium (free + premium) to trial + premium. New premium fee is $1.99 per year per device.  You are right, that's an annually price.

What's wrong with freemium model?


Freemium model seems to be the de facto standard pricing model nowadays. The benefits are clear:

  • it's usually easier to convert a premium user in two phases than directly from a stranger
    1. convert a new user to setup a free account
    2. upgrade a free account to a premium account
  • you get free marketing when ppl lower their expectation on free services
We bought this philosophy initially, so Just Proxy was launched with freemium model. It indeed helped a lot at the beginning by attracting lots of installs. But the natural free to premium conversion is just too low to make the whole model sustainable.

Let's do the math, assuming the free to premium conversion ratio is 1/1000 for a newly launched app (it's not our number but not far off). This is not scalable at all, I can hardly imagine any service would break even with 0.1% users paying for the rest 99.9%. This is extremely true for VPN industry, when bandwidth and servers are still expensive. 

What are the options?


We discussed a few options:
  1. Increase the premium membership fee. Until today we are charging $5/month, or $50/year. This is slightly cheaper than our competitors. But given we are rated (4.72/5.0) higher than our competitors, can we try to increase our fee for a better service?
    • Rejected: with the raised premium charge, we might end up having even less premium users (say 1/5000) paying for the rest (say 4999/5000), then shall we raise again? On the other hand, do we really want to rip off a group of people but actually spend the money on another group? 
  2. Increase the free to premium conversion ratio. 
    1. Throttling network speed for free users
      • Rejected: we are harming 99.9% users experience simply to make that 0.01% looks more compelling? 
    2. Prompt premium plan more aggressively, like extension popover, email etc.
      • Rejected: our ultimate goal is to make a VPN that just works. It should be something start-and-forget. All the complexities should be handled seamlessly in the background. This approach is against our goal. 
  3. Introduce advertisements
    1. extension ads
      • Rejected: same as 2-2. With extension ads, we would inevitably complicate the operations to get more ads presences. This is fundamentally against our goal to make a perfect VPN app. 
    2. inject ads to the page by replacing existing ads or content with ours
      • Rejected: this is harming website's benefit. They are already getting the traffic but ends up showing someone else's ads. I wonder it might even be illegal in some countries. We discussed this option because some of our biggest VPN competitors are surprisingly doing this. 
So what are the other options?

Our new pricing model

The new pricing model is very simple. All new installs are given one hour trial, and then $1.99 per year per device for unlimited access. By unlimited we mean:

  1. no location limitation. You can freely access all 18 locations instead of 3. 
  2. no speed limitation. Feel free to stream 1080p videos.
  3. no time limitation. You can keep the extension on 24 x 7 if you like.
  4. no total bandwidth usage limitation. 
And again, $1.99 is for a whole year. When a premium user is only paying for his/her own usage, the total fee can actually be reduced from $5/month to $1.99/year.  Although Paypal is charging even more on small amount transactions, we anticipate healthier financial conditions with the new plan. 

What about existing users?

Thanks for all the early adopters, we won't be able to improve so much without your timely feedback.

All existing free users can enjoy the trial until the end of November (instead of one hour), and then decide whether they want to

All paid users can request refund anytime and re-join with the cheaper plan. There is no more 14 days money back limitations for for any plans started on or before Nov 9th.

Any questions feel free to write to justproxy.crx@gmail.com. We actually monitor this address.

35 comments:

  1. but i think the users will decrease in number as people use it for using facebook or instagram because in boarding schools they have their own servers and those servers has denied access to such sites like facebook, instagram, youtube and other sites. so you should not bring this app as a paid app

    ReplyDelete
    Replies
    1. Exact same thing. Keep the slow network speeds (e.g. when the trial is over, Ask: Get Premium ($1.99 a year) or Downgrade to Free Version(Free) and then if they click "free", show the limitations of the free version. Hopefully you can look at this!

      Delete
    2. Dear sir can you help me how can I purchase I know the purchase method I'm from UAE I wanna purchasing by visa debit card when I put the details of my debit card after then going processing but not paying by my debit card why sir ?

      Delete
  2. I've been using this extension for my google chrome for like 2 month and i think 3 server is good enough. I do know your intention for better service but as a student(like what he said ^) i'm practically using the app for streaming youtube and facebook as those website are block my school and i cant seems to bypass them unless i use a vpn. So please dont make this an paid app.
    By the way..... thanks for the 1 month service. I'll quit after the free trail.

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  3. I will be leaving after the free trial. Sorry.

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  4. Paid, $1.99 for a VPN that works fine is no big deal

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  5. you get the rating because this service is free, now we'll leaving

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  6. Please don't do that, better you could monetize it for ads but paid content is not good for my wallet. -_-

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  7. I was really concerned at first but I appreciate you laying out your thought process like this. It makes sense to me and the 1.99 for a year for a service that actually works smoothly is definitely worth considering.

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  8. $1.99/year that's not going to kill me

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  9. Well... Im a student and I'd like to say: It was nice being with ya. i understand that ya have to get money someway but I can't pay for it so after the trial i have to leave. It was amazing though. most don't work but this was incredible. If I manage to get some way of paying I'll buy it. buy for 2 years I'm going. Bye.

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  10. $1.99 a year is fine. Nothing is free in real life and it works fine.

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  11. i can't open the payment page even when your vpn is on
    maybe because i am in saudi arabia

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  12. for those say "i'm student i cant afford $1.99" really? even ur one dine also more then that

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  13. i dont think you should make it a paid for app i think ppl should use it for entertainment for example school how do we get on youtube or other websites im using this thing on 3 different computers and they are making my account faster and they keep me hidden keep it free and more and more ppl will use it put adds up keep it free this is the best proxy ik thats out there if u keep it free ppl will be willing to use it a lot more

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  14. 1.99 a year is extremely affordable. I hope the quality of service doesn't decline as I feel like more people will sing up for premium services now.

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  15. Good deal, who can't afford $1.99, i think its a little low but i'm hooked

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  16. I would agree to pay $1.99 BUT only if your app will be smart enough to change constantly addresses of your servers. Or else it is easy to block your servers and stop provision of the service.

    ReplyDelete
    Replies
    1. hi, we are experimenting features to keep refreshing IP addresses. Please write to justproxy.crx@gmail.com if you would like to help with a beta testing.

      Delete
  17. maybe make it an option to just watch however many adds will get you two dollars, instead of having to pay for it, because setting up payment through paypal ect. can be very complicated.

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  18. your going to lose alot of customers by doing this.

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  19. Sold! your service is good, and you should be proud of it. you can't win everyone over, but your explanation is well thought and well presented. it's $1.99 a year. those who said that they can't afford it simply means they're a total cheapskate, or too lazy to push a button.

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  20. Indian User will not able to pay because our most Indian banks card don't support international transaction with international currency :( ,i have to leave now ..

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  21. please provide me the link for the premium services because this one
    wouldn't work https://www.justproxy.io/

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  22. I can't use it even after the payment. Please help

    ReplyDelete
    Replies
    1. hi, it's likely your payment is not associated with your account.

      Can you provide your account email and paypal transaction id to justproxy.crx@gmail.com?

      Delete
  23. India call nahi ja ranhi hai doston kus to batao me kya karu

    ReplyDelete