Making Freemium Work: 6 Tips on How to Succeed with this Business Model

As a software development company, you know the importance of getting more users to try your product.

However , exactly where do you find them and how would you plead your case that your firm’s solution is the best out there for solving challenges and needs?

The truth is which you don’t. Instead, you make your offer so impressive that they can’t say no .  

And, provided enough time, they come back prepared to give you money in exchange with regard to access.

How is this also possible? By using the freemium model to leverage your software platform or service.

You have probably already encountered this type of business in your everyday life.

Facebook does it. Dropbox does it. Plus a whole bunch of other well known organizations who understand precisely how powerful it can be.

But , before you start telling everyone that the software platform is available at no cost , there are a few elements you should keep in mind.

Here’s what you need to know about making freemium work in order to expand your customer achieve.

What is a Freemium Model?

Basically, the freemium model is usually when you offer a target consumer a free version of your software program or other SaaS platform.  

➤ To be able to unlock more features plus expand the usability from the program , they’re needed to upgrade to a premium version for a small fee.

It may sound counterproductive at first to provide away the software your team has worked so hard to create.  

But the truth is that this can be a profitable sales model, especially if your own premium version is filled up with robust features or extra product training.

➤ The process also acts as a way to build a foundation of rely on between your business and the end user.  

If this doesn’t cost them anything to use the basic level, then they’re likely to start to increase confidence in your organization and product while using the free edition.

In the end, this translates to a greater likelihood of upgrading to the premium option in the future. Which, if you think about it, is the whole stage of using this type of sales technique in the first place.

➤ The particular freemium business model is also an excellent option if your software or even SaaS platform is new to the industry or even hasn’t yet built up its reputation as an industry head.


Consumers normally distrust new or emerging solutions. Instead, they want to use tried-and-true products or services.  

Whenever you can build up your reputation, there is a better overall chance on success.

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Making Freemium Work: How To Do It

Almost anyone can try the freemium model to gain more traction for their software platform. But it really takes a skilled marketer to find out how to do it well .

The reason why? The process isn’t always since cut and dry since it seems.

In order to make a freemium program stand out, you have to be willing to give up basic access to your software without getting anything at all.

And the features a person provide need to be as robust and useful to your target market as possible.

But you also do not want to give away everything immediately, either.

If a consumer is getting a lot of value through what they have access to , they might never upgrade to the premium version.

Can you observe that there is really a delicate balance between giving too much of your product away and not being able to gain premium subscribers?

The good news is there are multiple ways you can achieve this without having to give up too much of your own profit margin.

To help you out, we have collected six of our top tips on how to succeed with this business model.

#1: Know what your ideal customer is willing to purchase

It isn’t useful to just let anyone use your system without some sort of premium choice.  

That said, you also don’t want to be too skimpy around the freemium offer, as a bad deal could turn away subscribers.

The trick is to find the happy medium between , which really begins with knowing your ideal buyer character .

When deciding on what features to include in your freemium offer, make sure you’ve thought about how your target customer would use the platform.

However, you might get a wider range of clients than just that ideal client you have in mind, knowing their needs is the first step in understanding what they want for free and what else they’re willing to pay for to gain access to.

For example , let’s say a person offer a cloud storage answer for medical providers. You understand just about everyone could use a small amount of room, such as 500 MB.

But the vast majority of your ideal client base has a need that surpasses 1 GB of storage space .

To help make the freemium model work, you would give the lower amount free of charge, but charge a premium rate for what they really need access to.

#2: Nurture your own freemium customers into paid ones

To ensure your freemium business model is a success, you will need a plan to nurture your unpaid subscribers into becoming high quality members.

What this means is that you should be able to know your buyer’s trip well enough to find touchpoints where reaching out plus helping with their concerns makes the most sense.

For example , if a user has had access to the software program platform for a set quantity of days but has never logged into their account.  

You should want to automate an email or other means of communication that could see if there were any questions or concerns.

You could also make a drip feed of emails offering helpful advice, guidance, and tutorials in order to best maximize the use of the freemium version of the item.

By doing this, you are building trust with your subscribers and showing which you truly care about their requirements.

After a few contacts, they should be warmed up enough to start hearing about the premium version of the product.

If you’ve earned their particular trust and conveyed the significance of upgrading, then it should be an easy feat to get them to purchase.

#3: Stay committed to improvements

Let’s say you get to a place where your freemium offering is going spectacularly well.

You might have tons of new free clients jumping on board all the time. And also a fair number of those convert well to premium customers.

How do you keep them because customers and ensure they do not slide back into the unpaid version of your platform?

By continuously remaining committed to improvements and creativity.

Simply put, you have to continue to make your product the best it absolutely can be by adding new features as often as reasonably achievable.

This allows current subscribers the option to try out the new capabilities, although it also gives your freemium users a reason to consider upgrading.

The problem a lot of freemium software program providers have when it comes to this business model is that they let their own end product get stale, which leads to attrition and declining subscription numbers.

Instead, it is always better to make these improvements and give your focus on customers yet another reason in order to trust your company.

Unsure where to start on making modifications? Send a survey in order to your existing customer bottom.  

They’ll probably have an idea (or seven) to help get your development group on track.

#4: Offer a recommendation incentive

Word-of-mouth advertising is definitely one of the strongest forms of marketing, even before the internet was a thing.

With the freemium business model, it is still just as important to get people talking about your item and the different features available for subscribing.

To make this much more effective, you’ll want to offer some type of referral incentive.

For example , you could give a newly improved paid subscriber the chance to provide one month free to a friend.  

There’s a good chance that the new person who received a premium month for free would be super happy to continue after the time-frame is up.

The end result is that you possess two happy premium clients willing to tell others regarding your product and precisely why it is the absolute best solution for unique needs.

You may also take this a step further by offering monetary or gift incentives for referrals.

This is often more lucrative within the B2B environment, where your SaaS might be something that a company will pay thousands of dollars a month for team access.

If your existing client knows about this program and understands that they might get a commission, there is a high probability that they are likely to work harder to help you near the deal.

#5: Understand client motivations for conversion

Could somewhat relates to knowing what your customers are willing to pay for, it is a small different.

Understanding client motivations for conversion are usually elements that would push an existing freemium subscriber into purchasing paid access.

As an example, let’s say your own software is financial-related and assists small businesses get better organized just for filing taxes.

During the majority of the year, your main freemium base wouldn’t have any immediate need to speak with a certified accountant over live chat.

But during tax season? You bet they would.

In fact , they would become likely to sign up for an upgraded assistance that provides access to additional insight and guidance to keep all of them in compliance with the Internal Revenue Service.

Even if your software package doesn’t deal with something since huge as finances , it comes down to a basic knowledge of what drives people to look for additional value from your item.

By keeping in mind your perfect customer’s wants, needs, and motivations, you can position your paid subscription as a good alternative to the free providing they already have access to.

#6: Understand the intricacies of this kind of business model

The freemium business structure isn’t like many others you may see.

For example , your hairstylist wouldn’t usually allow you to try out a portion of a haircut before leaving without paying.  

As well as your favorite vegan restaurant definitely wouldn’t let you chow lower half of a sandwich at no cost before walking out the door.

Understanding the intricacies of the freemium business model includes knowing how to offer intense value without worrying away potential subscribers.

Furthermore, it is important to know that this model has a unique consumer life cycle.

While early adopters tend to be very excited subscribers, those who arrive at the product later in the process will likely not be as enthused.

In turn, this can lead to a higher churn rate than you might have earlier experienced.

So , how do you save this from becoming an issue?

Success with the freemium business model really just comes down to studying it carefully and striking a balance between value and necessity for the target market.  

If you can make that happen, then your company is really within a good place.

Wrap Up: Making Freemium Work Effectively for Your Business

Coming up with various ways to ensure your free subscribers rely on and value your brand name is important.  

But so is striking a balance exactly where upgrading to a premium subscription feels like a no-brainer.

Striking this balance is absolutely at the heart and soul of creating freemium work.

If you can have the ability to accomplish this feat, then it should be incredibly easy to keep individuals new free customers plus, ultimately, a whole slew associated with happy paid subscribers.

Are you looking for more information on how to increase online conversion rate ?  

The Rock Content team provides put together an extensive ebook specifically made to help you reach your targets!

The particular post Producing Freemium Work: 6 Tips on How to Succeed with this Business Model appeared first upon Rock Content .

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