How MailChimp increased their earnings by 650% in a year by making only this one change

You need to continue growing rapidly even though your growth has stopped.

You start to think about switching to freemium more frequently.

 

Since MailChimp became a freemium:

  1. In a single year, their user base multiplied five times.
  2. Their profit grew by more than 650%.

 

As a result, you must immediately switch to freemium. Right?

Wrong.

 

The most important section is WHY MailChimp changed to a freemium model.

Here is their account:

 

  1. For eight years, from 2001 to 2009, they had no interest in freemium. They have a profit-growth goal in mind.

 

  1. By 2009, they had generated sufficient income to consider freemium, so they performed some careful math:

2.1. They were aware that 9% of subscribers are paid subscribers on average across all businesses.

2.2. They therefore determined how much it would cost to manage 10 free users for every paid user.

2.3. They gave their deliverability impact, misuse vectors, staffing needs, and many other factors careful consideration.

2.4. Their calculations indicated that there might be a chance.

 

  1. They conducted numerous pricing A/B testing studies and monitored:

3.1. Profitability.

3.2. adjustments to order volume.

3.3. Downgrades.

3.4. Refunds.

 

  1. Using a tonne of price data, they discovered that freemium is the most profitable pricing option for them.

 

  1. They opted to move to freemium because of this.

 

Source : Blog.mailchimp.com

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