Running the add-on business model successfully

I get a great deal of questions on how to be successful with the “freemium + add-ons” business model. I suppose the word has started to get out that Ninja Forms is doing really, really well and they want to know how we did it.

The truth is we’re still doing it and we’re not even close to done. You learn quickly that in business things can change quickly. This means you have to be constantly reviewing what is and isn’t working as well as watching trends coming down the road.

All that being said, while success is relative, I have decided to write a series of posts about how we’ve made the add-on model work for us. Before we get into that let me share a little story.

Ideas can come from unusual places

Nineteen years ago I got my first job in sales.

I answered an ad in my local paper that promised unlimited growth potential and of course lots of money. I was twenty years old and was looking to expand my horizons and was ready to try something new.

The add didn’t really say much about the position. It only promised the lifestyle it would provide and I didn’t have anything to loose so I answered the call and headed to my first day of orientation.

Orientation was a day filled with filling out paperwork and watching propaganda videos starring William Shatner with several other people. As each hour passed more and more of the applicants began to leave realizing that this was not the job they hoped it would be. I wanted some new experiences so I decided to stick it out.

It took almost 6 hours before it was finally revealed what the job entailed. We would be selling vacuum cleaners…door to door.

You read that correctly. My first sales job was as a door to door vacuum sales person.

Specifically I was selling the Generation 4 Kirby Vacuum.

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What does this have to do with the add-on business model?

While there was nothing about the Kirby vacuum cleaner that was “freemium”, it was essentially a small unit that had attachments (add-ons) that extended it’s capabilities. With the right configurations it could be a handheld (albeit a heavy one), a canister vacuum, an upright, or even a shampooer.

That’s right, my first experience with the add-on model was though an overpriced vacuum cleaner. Not just any overpriced vacuum cleaner mind you.

The Kirby is actually an impressive piece of machinery with a lot of extra functionality, but it wasn’t all the extras that made people purchase it. It was the fact that it was a great and well built vacuum. It was because it was solid and it cleaned really, really well. While it could definitely do a lot of other things it was the core functionality that set it apart from the rest.

And this brings us to what I think is the single most important part of being successful when attempting the freemium + add-ons business model.

Your core plugin must be amazing

This is the failure of many traditional freemium plugins. The ones that offer a stripped down lite version with the hopes of converting users to their more premium version of the same plugin. Many times the lite version is so stripped down and useless that it offers no real glimpse as to what the premium version may offer.

If you want this add-on model to work the first step is creating an amazing free base plugin. This many times means that you will put features into this base that you might otherwise be able to easily sell at a premium amount.

I’ll discuss this in a later post, but it’s key that you don’t try to sell everything. It’s challenging to know when to include it in the free version and when to sell it as an add-on. Learning this, however, will have a huge impact on the success of your project.

Perhaps a real life example from my own plugin is in order.

Ninja Forms v2.8 – Emails & Actions

Most free forms plugins provide a way for your to send the user and an admin an email with the submission data. We offered this from the very beginning as well, but in version 2.8 we decided that there was a much better way. At the time we called it “Notifications” but have since renamed it to “Emails & Actions.”

Emails & Actions essentially allow you to create an unlimited number of actions that can take place when a form is submitted. These may be emails, redirects, or success messages. Because this feature is extensible, anyone can register their own actions to be triggered when a form is successfully submitted. Our Text Message Notifications and Slack add-ons already take advantage of this.

We could have made this whole Emails & Actions system a paid add-on. After all, most other form plugins don’t offer even close to that kind of flexibility. Instead we decided to place it into the free core plugin. It ended up having two huge benefits.

It made Ninja Forms even more powerful and thus attractive as a free form creator. It also made it possible for us to extend that functionality with our add-ons making them even more powerful themselves. For instance our Conditional Logic add-on is now able to provide conditional actions.

It’s all about the free core product

The Add-on business model has a lot of challenges. Some are common with other models while others are exacerbated by the unique qualities of selling add-ons. Many of these challenges can be dealt with simply by making sure that your core base plugin get’s treated like it the main premium product. Because if your core plugin isn’t solid the whole system collapses.

Do you have an add-on product you are trying to make successful? Please share your experiences below.