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Join Our Research Team at DMA 2014
Jun 28, 2001
Interview

25% of MessageFriends.com Service Convert from Free to Paid

SUMMARY: Learn how a new owner turned a free online bulletin board service that was losing money into a profit center by -- yes you got it - charging for subscriptions.  Subscriptions are probably the biggest trend online today. Check out this fairly quick article to learn more.
MessageFriends.com is only tangentially in the content industry. The site allows members to add bulletin board functionality to enhance their own site's content. This service was originally free; but when Brian Welch, President of Perfect Presence Inc., acquired it in February 2001, it had 1546 clients and was "losing a lot of money."

Welch immediately emailed clients asking for suggestions to improve the service. A month later, as improvements were underway, he followed up with a second email asking whether members would prefer to pay $15, $20 or $30 a year for the service. After picking the final price of $39 per year for the first board plus $9.95 for additional boards, Welch sent a staggered series of three more email notices letting members know the free service would be turned off in 60 days.

He got fewer angry flames in response than expected, "Maybe 25 were really pissed off. But a lot of people were really happy to no longer have to have ads on their boards." As of June 2001, a full 25% of former free members converted to a paid basis, many purchasing multiple boards. Next Welch plans to start marketing the service outside his current member base.

While most Web site and email newsletter publishers moving from free to paid these days count themselves lucky at a 3-7% conversion rate (depending on marketplace), MessageFriends.com's story proves that if you can create a service that's truly useful, conversion rates can soar much higher. How does "truly useful" content differ from the "sticky" content everyone was previously aiming for? And can these small-site successes translate to mass audience sites? That's the next challenge for the subscription sales hopefuls everywhere.

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