The Freemium Facelift

Within the last few years, the Freemium Business Model has begun to pickup momentum. For those new to the concept, “Freemium” refers to giving away a free online product or service and charging for the advanced features. If it sounds familiar, that’s because it is. The concept is rooted in the days of shareware; when developers would produce a version of software with limited features in the hopes that you would purchase the full version. It is a strategy that continues to be successful, but making it work today requires some new key elements.

First, the free version now needs to be much more than just an entry-level software solution. It takes a robust, full-featured product that can easily stand on its own two feet. Whetting the appetite of potential buyers means allowing them to put the petal to the metal during the test drive rather than restricting them to school zone speeds. The paid premium features must therefore be positioned as a value-add, but not essential to achieving full functionality.

Second, time should no longer be an factor. In the golden age of shareware, free titles often had an expiration date that ran 15 to 30 days following installation. When time ran out, the title would shut down and allow no further access until a purchase was made. This doesn’t fly anymore. Users now need more time with a solution to be totally convinced a purchase is justified.

Third, and most importantly, ALWAYS keep the free features free. I cannot stress this enough. You will experience a hurricane of dissent among your users if you begin charging for features that were once free. Sure, it’s possible that you may convert some users, but most will walk away never to return.

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