It’s hard to resist the allure of free. One key reason user adoption of the Internet has soared globally is the rise of the “freemium” business model — where users get to use a basic product or service for free, but must pay for a premium version with additional features.
How Companies Can Get the Most Out of a Freemium Business Model
A study shows it comes down to pricing.
March 20, 2019
Summary.
It’s hard to resist the allure of free. One key reason user adoption of the Internet has soared globally is the rise of the “freemium” business model — where users get to use a basic product or service for free, but must pay for a premium version with additional features. But succeeding with a freemium model can be difficult, as many customers are reluctant to start paying. One strategy for dealing with this is called versioning, where different versions of the premium product or service are made available to the market. Research finds that this can work in moving customers to let go of the free and move to premium versions.