While there are a few vendors with seemingly generous "unlimited" (I am not sure how they can offer it, really), I have also seen vendors in this space fold away and reduce from something like 100,000 free records to just 1000 free records (of course, there was some backlash from existing user base, so they had to allow existing users remain with the old quotas, while restricting new ones).

But I would like to take different approach - based on what really costs us money. This means our free app may not seem very much generous, but our paid versions have substantially better value for money. I am trying to reason this out to users, with the following content in the pricing page..

"Did you know that the average conversion rate in freemium apps is just 3% ( link to http://dondodge.typepad.com/the_next_big_thing/2007/05/freemium_free_t.html ). That is, 3% of the users fund 97% of the other users who use the free plans. Our pricing plans are such that we don't over-charge our paying customers to fund our free users. In a way, our free users pay for themselves - since our free plans our ad-supported. This enables us to provide generous quotas for our paid-users.

We believe software apps are becoming a commodity and should be priced like one. Our rates and quota limits are based on what actually costs us money - the computing power, storage and bandwidth. This enables us to be generous in allowing more user-accounts per application."

The pricing page is at http://crm.ifreetools.com/pricing

My questions to HN : 1. Do you think that such a pricing approach (lesser in free, but much better in paid -and- pricing in terms of what costs us) is OK ? 2. Do you have other suggestions on communicating in a better way to users ?

Thanks.