Pricing model for Lists Kit

Which pricing model should I go for for my Lists Kit boilerplate business?

Some context: It’s a plain vanilla HTML, CSS, Javascript boilerplate for making info directories. Everything in a single index.html file, drop into a web hosting of choice, tweak colors and images, and voilà, new info directory is up.

Now with the launch approaching, I’m mulling over the pricing model. I’ve not done a boilerplate business before, other than my Carrd plugins, if we consider them some sort of boilerplates. I’m considering two options:

1. License model – One-time yearly license with all updates. Upgrade at smaller fee next year for new updates. No free tier whatsoever.

2. Freemium model – Free version of boilerplate for try-outs, some documentation, but no support other than peer/community support. Premium paid version comes with more features, components, dedicated customer support, documentation.

I asked LLM pplx-70b-online

“Pricing models. Give a list of 5 pros and cons each when comparing one time payment license model versus freemium model for a code template.”

And here’s the AI’s response

Pros and cons of license model

Pros:

• Predictable revenue: A one-time payment model provides a clear and predictable revenue stream, making it easier to plan for future expenses and growth.
• Higher perceived value: Users may perceive the product as having a higher value since they are making a significant upfront investment.
• Lower churn rate: Users who have invested in a one-time payment are less likely to churn, as they have already made a commitment to the product.
• Simplified pricing structure: A one-time payment model has a straightforward pricing structure, making it easier for users to understand and commit to the product.
• No need for continuous monetization: With a one-time payment model, there is no need to continuously monetize users through upsells or additional features.
• [My own point:] I love one-time payments. It’s taps on subscription fatigue. It’s easy to impulse buy.
   

Cons:

• Higher barrier to entry: A one-time payment model may deter potential users who are not willing to make an upfront investment, limiting the potential user base.
• Limited opportunities for upselling: Once a user has made a one-time payment, there are fewer opportunities to upsell additional features or services.
• Potential for lower user engagement: Users who have made a one-time payment may be less engaged with the product, as they have already made their investment and may not feel the need to continue using the product.
• Difficulty in tracking usage: With a one-time payment model, it can be challenging to track user usage and engagement, making it harder to identify areas for improvement or expansion.
• Risk of lower customer lifetime value (CLV): Users who make a one-time payment may have a lower CLV, as they are not continuously investing in the product.
   

Pros and cons of freemium model

Pros:

• Larger user base: A freemium model attracts a larger user base by offering a free version of the product, making it more accessible to potential users.
• Lower barrier to entry: The freemium model allows users to try the product without making an upfront investment, reducing the barrier to entry.
• Opportunities for upselling: By offering a free version with limited features, the freemium model creates opportunities to upsell users on additional features or services.
• Increased user engagement: Users who start with a free version may be more engaged with the product, as they have not made a significant upfront investment and are more likely to explore the product’s features.
• Easier tracking of usage: With a freemium model, it is easier to track user usage and engagement, as users are more likely to explore the product’s features and provide valuable feedback.

[My own points:]

• Allow people to dip their toes, try it out before buying.
• Just like free tools marketing, like my free Carrd plugins.
   

Cons:

• Lower perceived value: Users may perceive the product as having a lower value since they are not making a significant upfront investment.
• Higher churn rate: Users who start with a free version may be more likely to churn, as they have not made a commitment to the product.
• Complex pricing structure: A freemium model can have a more complex pricing structure, making it harder for users to understand and commit to the product.
• Need for continuous monetization: With a freemium model, there is a need to continuously monetize users through upsells or additional features, which can be resource-intensive.
• Potential for lower customer lifetime value (CLV): Users who start with a free version may have a lower CLV, as they are not continuously investing in the product.

[My own points:]

• Those who want free might never convert anyway.
• Customer support for free users will suck up more time.
   

So after comparing this way, I’m still unsure. Neither one seems to have a clear upside against the other. I guess in the end, it might come down to personal preferences, like:

• Do I enjoy supporting free customers indefinitely?
• Do I want to continuously upsell?
• Which pricing model will attract the kind of customers I enjoy working with more?

So if you’re in this situation, which one would you go for, and more importantly, WHY?