Formsly gives your visitors detailed information about your business — the sort of information that you might find on Yelp or Google Places — but that information is embedded in your own website, and you can control its format and content.

In addition to the usual address and phone information, pages from Formsly can include integrated Google Maps, and turn-by-turn directions to your location. Formsly’s contact forms include a CAPTCHA to discourage spam, and can route email to the relevant department with CC and BCC support.

In order to set up the service, you log into the Formsly site and provide it with the data you wish to display. You can preview the results, then copy the simple HTML that Formsly provides directly into the appropriate web page.

Formsly has both a free plan and paid plan. The latter adds some nice options, including being able to add Google Street View, your latest tweets and social media profiles. The paid plan also lets you customize the contact page in various ways, add branch offices, and view and download visitor tracking data.

You can see a demo or sign up here. The paid plan costs $11.95 per month.

I found Formsly very easy to set up and use. Smaller companies may prefer the free plan, but the paid plan is probably a good value for larger businesses with multiple locations.

How do you manage the contact information on your website?

The idea behind “freemium” is simple: Offer a basic free version of an app to entice new users, and then get them to pay as they need more features or capacity. Dropbox, Freshbooks, Evernote — nearly all of our favorite web apps use the freemium model; its ubiquity would suggest that it is successful.

But is that really the case, or is it just that because there are free apps that it make it very difficult for startups to do anything differently? Setting the base price for a product at zero can make turning a profit difficult; converting free users to paying customers is a tricky task, and as user numbers grow, so do costs. Indeed, many people have questioned whether so many free apps are good for the web app industry, and even whether the freemium model is bad for business in general.

However, MailChimp’s figures suggest that freemium does work, at least for that company. Not only has making the app a freemium product grown its user base, as you might expect, but other figures show positive gains, too. In the 12 months since going freemium:

• The company has added over 30,000 new users and 4,000 new paying customers each month.
• The total number of paying customers has increased over 150 percent, and profit has increased by a whopping 650 percent. Profit has increased primarily because cost of acquisition has dropped.
• Contrary to what you might expect, the result of making the product free for users with a small number of subscribers actually increased the number of customers managing large email lists through MailChimp. In April of this year, 12 percent of MailChimp’s users had lists of greater than 10,000 subscribers. By September, that had increased to 20 percent.

Of course, MailChimp’s experiences won’t automatically extend to other web app vendors; indeed, there are many people who don’t think that the freemium model works. MailChimp is a slightly unusual example because it’s an established app that only recently made the decision to make some of its services free; it’s not a startup trying to break into the market with a brand-new product.

So what’s the secret to making a freemium business successful? MailChimp’s co-founder Ben Chestnut explains in his post that for most freemium services, the ratio of non-paying to paying customers is 10:1. For a freemium business to work, the revenue from that small number of paying customers has to support the large number of non-paying customers. As Chestnut notes, many startups make the mistake of solely focusing on growing their user base, assuming that they’ll be able to monetize the product later. MailChimp had already developed a solid product that was demonstrably generating decent profits. Adding a free component helped the company to get that product out to a much larger audience. Freemium doesn’t automatically mean success, but when coupled with a solid product with a proven ability to generate revenue, it can be a very useful marketing tool.

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This trend is not exclusive to web app startups, however. Even freelancers seem to apply some aspects of this model to their services. Let’s take a look at how it’s done and how to make it pay off.

Starting With Free

In Charlie Hoehn’s e-book “Recession Proof Graduate,” he recommends that fresh graduates with no job experience offer to do web working projects for free to start their careers. Since the work is done remotely, they can manage this free project while searching for paid ones.

I see this idea reflected in my own career path. I was still a college freshman when I started freelancing, and I did a lot of spec work back then — both graphic design and writing. My experience is not unique; I often hear of new freelancers doing something similar.

Kristine Clarisse Cruz, who has only been a writer for two months, told me that she gives away sample articles to hook potential clients into a working relationship. When I asked why she did this, she replied “I [want to] establish a good first impression with my potential clients and leads, and allow them to see what kind of work I can do….” Kristine doesn’t have a portfolio yet, and this practice allows her to build it and gain clients at the same time. It seems to be paying off, because according to her “I’m actually earning more now than when I had a regular job.”

For beginners, working for free is an important part of the learning process. Fresh graduates and new talents are able to practice their craft and get hands-on business training, usually at low risk to themselves and the client. Through direct experience they learn about client communication, setting deadlines, and managing expectations (especially their own).

Like all first steps, we quickly move beyond this model. But do established freelancers also use free services in their practice?

Free as the Front End

Past the beginner stage, it’s common for freelancers to stop giving away their services unless they are doing pro bono work. But this doesn’t mean that they no longer perform professional tasks for free. Many of us leverage freebies for the purposes of promotion, marketing and gaining authority in our fields. We do this by giving away ideas and information via blogs, social media and case studies. Others work on open-source projects. While this brings us new opportunities, we are faced with new challenges as well.

One such challenge is that your potential clients might judge the value of your free work differently than you do. WWD blogger Nancy Nally is one of the many freelancers who uses her blog, Scrapbook Update, as an anchor for her paying projects. “First, my writing credits from my web site aren’t viewed as highly by many people looking at my writing credits because ‘it’s just a blog’ and I own it myself. That is despite the fact that the site is highly respected in its subject area.”

Lack of control is also an issue. Once you release your free ideas, services, or products into the world, you’re never sure what the results are going to be. According to Nancy, offering free content causes some copyright problems “I do have the common blogger’s problem of my work being stolen and republished by other sites fairly regularly.”

Making Money — Finally

As Kristine and Nancy have illustrated, it is possible to use free projects to induce income generating work. Doing this successfully, however, takes effort and thought. Here are some points to consider:

Remember what you are really selling. Even if you have free content, services, or products working on them does not mean you should lower your prices or devalue your other projects. It’s never just a press release, a logo, or an e-book — these things can be found somewhere for free, or at least close to it. Usually, what we’re really selling is talent, reliability, years of experience, or excellent customer support. Our real product is the value we provide.

Think small. If you’re producing some free blog posts, e-books, or reports, you don’t have to make all of them available for free. Writer and developer Nick Cernis suggests micropayments as an alternative. In his post, “The End of Free Content”, he elaborates on this idea:

“Continue to provide free content just as you are, but sell your more unique content for a small one-off fee or ‘micropayment’. You choose what you sell, your audience still gets a stream of free stuff, plus they get to support you by buying paid content if it’s relevant to them.”

Web cartoonists may be familiar with this idea, especially since it was one of Scott McCloud’s more controversial proposals regarding monetizing online comics almost a decade ago.

Set criteria. Establishing limitations and criteria allows you to work on free projects with less stress. What types of people or organizations are you willing to work with? How much free time do you have to devote to this project? Do you have to be given a non-monetary reward?

While it’s hard to imagine being a freelancer without doing at least one thing for free, we shouldn’t get carried away. Remember that: 1) Freelancers have clients. 2) Clients pay freelancers to do stuff. The rules of the business don’t get any simpler than that — no matter how complex and unpredictable this new “freeconomy” seems. At the end of the day, cash in your bank account is the only objective measure that business is going well.

Have you ever worked for free? How did it affect your freelance practice?

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But as Paisano wrote recently, current conditions won’t last forever. Many sites will eventually become fee-based; others will shut down when their funding runs out, or when their owners decide to move in a different direction.

So when I evaluate a product that I’d like to incorporate into my company’s workflow — especially a product that will be visible to clients — I try to consider the product’s feature set, along with the issues raised in Judi’s 2007 WWD post. I also ask the following questions:

• Is the product open? Like a lot of people, I prefer open source projects. But I will consider proprietary systems if I am comfortable with how my data is stored and backed up, and whether the product allows me to do my own backups.
• Does it use standard formats that are easy to import and export? If the product will interface with my existing data, I need to evaluate how much work it will be to prepare the data for use by the new product.
• Can I host the product or software myself? Because my company does web hosting, we have easy access to web servers, bandwidth and backup systems. Therefore, I tend to prefer software that we can host ourselves. Maintaining a web server isn’t everyone’s cup of tea, although most of the major hosting companies make it really easy, as long as you’re willing to keep up with security patches and so on.
• If I can’t host the software myself, how reliable and robust are the product’s servers? Of course, even major services (like Gmail) have occasional outages. Here in Seattle, a fire caused a significant outage for many web sites just a couple of weeks ago. So I need to decide how my company will deal with such outages if we adopt the software.
• How will using this product affect my bottom line? Managing any new product requires investing time and resources to install, set up, maintain and troubleshoot. Proprietary services are priced many different ways, and may require an up-front cost, plus continued license fees or service contracts. And while open source products don’t require license fees, many open source software companies offer service contracts. I need to decide whether I want to invest in such a contract, or whether I think I can rely on the user community. Whether open source or not, it’s always a good idea to look at the complexity and maturity of the product, how likely it is to need support, and how active the user base is.
• What is my exit strategy should the product no longer be available? I need to decide how I will get my data, and plan for alternatives, if the product goes away.
• How likely is it that the service provider will be available in the long run? This one’s tricky, since as a small businessperson, I’m hardly in a position to see, much less analyze, the business plans and financial statements of every producer I consider. But there is a fair amount of public information available, so I need to do what due diligence I can.

It’s never possible to plan for every contingency. I had to scramble to replace my Sunrocket VoIP service when that company ceased operation, and I still have some SyQuest backup disk cartridges somewhere for which no players are now available. But with a little common sense, it’s possible to avoid putting all of our technological eggs in one basket and becoming too dependent on any one service.

How do you evaluate what new services to include in your workflow?

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This isn’t the first time I’ve considered upgrading my LinkedIn account and decided against it, which led me to start thinking about all of the “freemium” apps — basically free apps with premium upgrades — I’ve been using. I started feeling guilty about taking advantage of the “free” in freemium services, especially because I’ve had the opportunity to interview founders of these companies, many of whom confess to struggling over pricing.  So what makes us decide to pay for an app?

My decision process works something like this:

1. Is it mission critical? Not every app or tool I use is critical to the well-being of my company, but some are. Our project management system? Critical. Our internal social networking system? Not so critical, because we’ve not all adopted it yet, but this could change.

2. How useful is the free version? In my WWD review, I was impressed that Deskaway‘s free version had more features than Basecamp‘s. That could have won me over, but its interface just didn’t work for me.

3. Can I live without more functionality? I used Basecamp for quite a while without ever thinking about the reporting available with a paid plan. I was getting my reports from Freshbooks, and Basecamp was just a way for me to manage client information when I was working solo. I only upgraded to the $24 per month plan when I needed to manage more projects. Payment made sense because I had so much more new work to cover the expense.

4. Should I upgrade and pay or seek out a different app? Once I began adding more team members to my company, Basecamp’s inadequacies for deeper project management became obvious. So instead of upgrading a notch or two further — and still not having the functionality we needed — we moved over to 5pm at $4/month more. Again, the cost was palatable because more team members meant greater productivity and more moving parts to manage, so it made good business sense.

5. Do the fee levels hit my sweet spot? I realize I have two tiers of apps that I am willing to pay for, each with its own sweet spot in terms of pricing. For apps that benefit the overall smooth functioning of my business and provide real value that I can quantify, I’ll pay around $25 per month. I feel comfortable having four of these. The second tier contains apps that are useful in some aspect of my work, and I’ll subscribe to up to five of these at $10 per month. That’s about my limit. Right now, I don’t have a real method for deciding how much I will pay — it’s all from the gut. But we’re working to measure the costs of doing business and the impact our apps have on our bottom line, so eventually I should have some real numbers to work with.

6. How entrenched am I? In some cases, I begin to feel “trapped” by the choice I made initially when I started with an app. If I need to upgrade and the next level is out of my price range, what then? When I left Basecamp, I couldn’t easily figure out how to migrate information over to 5pm, so I just downgraded my membership to a free plan, and now cannot figure out how to access my data so it just sits there. Over time, those assets will be outdated and no longer as valuable as they were the first months of the migration, but I still feel a sense of my data being trapped. Avoiding this trapped feeling — as well as avoiding a huge learning curve of a new app — are two big factors when deciding whether to move to another service.

7. Can I afford not to pay? If an app I’m using has a positive effect on my business’ bottom line–or moving away from it has a significant negative impact–then I’m much more likely to dish out the cash.

Back to the case of LinkedIn. The lowest monthly upgrade is $24.95. Per month. For me, that hits a sour note. I get so much benefit out of LinkedIn at the free level and have for years that there is no incentive for me to pay. Just missing out on that Quick Poll feature isn’t enough to entice me over to a paid plan.

All LinkedIn could do right now to win my paying business — possibly — is to remove the free level altogether. But by doing that, their entire business foundation would crumble as many people migrate quickly away.

How do you decide whether an app is worth paying for? Which services do you consider well worth paying for?

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