Freemium and Advertising
to win more customers
The term popularized what Fred Wilson and the basic idea is to offer a free version of particular service or content, but also reserved a part for users of payment. There is a trend towards the free network and must not go very far to find examples that work: Skype and Flickr are two services that have always allowed free use and have been able to charge for value-added on them.
According to Reuters new companies that use the "freemium" business model, including Dropbox, SurveyMonkey, Animoto, and Eventbrite, are thriving. These companies offer some products and free services, and then try to attract customers to superior versions that cost money.
The economic crisis as competition has increased the impatience of investors and large part of the initiatives are threatened its existence.This creates a constant pursuit of growth in number of users while a business model that allows to live of advertising is. traffic news
Freemium and Advertising
Clear that move from version 100% free to freemium model isn't easy, we must take account of the market in which moves one (there are free alternatives), what value is going to offer and how it is perceived. On this last point is curious what one found, no one would pay today for a web browser to the desktop, but there is who makes it to devices like the iPhone (alternatives to Safari) or for the Wii. The idea is that there are niches with more payment culture than others (e.g., users of Apple, mobile, consoles). The market Spanish, still more complicated, culture of paying for services on the network is little or no entrenched, although they are beginning to see some details to consider changes, such as the many "Pro" of Flickr users. But is it really this freemium, so widespread model, a good model? I am not talking about the model itself, but whether it really is helpful to other types of models. To view results, Poker Face, one of the songs are most heard in 2009, only generated $167 USD in profits, and that that was reproduced a million times, it is soon. traffic news
Some forms of restricting a product or service of the Freemium model include:
Limited features, for example a 'lite' of a software version
Limited time, can only be used for 30 days.
Capacity limited, a software for accounting can be used only to create 10 invoices
(Limited users, only usable on 1 computer rather than over a network).
Limitations on the type of client, available for free only to educational users.Freemium and Advertising
In most models freemium less than 5-10% of end users buy something. When analyzing this from the traditional point of view it has no sense financially. It is like giving away 100 apples to each 5 pears that you sell. Despite this, things have changed, thanks to innovations in digital Internet production and distribution.
Some forms of restricting a product or service of the Freemium model include:
Limited features, for example a 'lite' of a software version
Limited time, can only be used for 30 days.
Capacity limited, a software for accounting can be used only to create 10 invoices
(Limited users, only usable on 1 computer rather than over a network).
Limitations on the type of client, available for free only to educational users.Freemium and Advertising
In most models freemium less than 5-10% of end users buy something. When analyzing this from the traditional point of view it has no sense financially. It is like giving away 100 apples to each 5 pears that you sell. Despite this, things have changed, thanks to innovations in digital Internet production and distribution.
Tips for attracting customers in the freemium model:
The key is to know sell the free package.
Concentrate on your package free for now not exhibas prices or promotions related to packages payment, that can scare off your customers.
Be clear in descriptions.
Explains the features and advantages of your product.
Don't be very extensive descriptions.
It aims to be clear, concise and brief.
The objective is to create intrigue in the client so that it is encouraged to test your business idea, total, does not
nothing to lose, is the FREE package!
Tips to keep in mind after having captured clients with our product.
The basic package must be of quality, otherwise clients will feel cheated and soon
They stopped using our product/service.
We must provide sufficient functionality to catch the user, to use it, which provides that your problem has been fixed thanks to our product.
It should be easy to use, clear, intuitive.
The key is to generate a product that catches the user and that after a time stop it asking to more shouts!
Tips to keep in mind when offering our product to a version upgrade pays.
We do not ofertemos paid versions or well our customers subscribe to the free version.
Hopefully a prudential time to offer upgrades to payment plans.
Let the user use our business idea a prudential time and that is the same that.
Search expand the features of the free version.
The key of the freemium model is in the package free and like this encourages the client to obtain a version pays.
Freemium and Advertising
Success factors
Conversion
One of the key factors of this model is to make free subscribers premium customers. Doing so is easier when the company can control their costs and therefore offer a low price.
Amount
Freemium is a numbers game: If only 1% of your users are going to pay you, then you need to have very large amounts of free users to have utilities for this % 1. traffic news
Value added
There is a need to create additional high value added products and services for the free user feel that it is worth paying the premium price. The value of the pleasant services must be also high because there is lot of competition for anything that's free in Internet.
MailChimp created a premium plan for a year and a half. The results speak for themselves: 12 months, the users of payment had grown 150%, the benefits a 650% and ACC had been reduced by 8%. Sorted figures that anyone would sign. Also increased their problems, so you have to take into account a trade-off between performance and problems
LinkedIn
LinkedIn is an example of a company that successfully applies the freemium model. LinkedIn basic services are free, but the company charges a monthly subscription for additional services. Reuters reports that LinkedIn recently published its financial results and subscriptions premium from utilities rose 60% in the second quarter of this year, for a total of $23.9 million.
SurveyMonkey
Another example is SurveyMonkey that allows to conduct surveys of up to 10 questions and 100 responses for free and charged $200 per year for an unlimited number of questions and answers. SurveyMonkey CEO said "Fundamentally changed the way of thinking the business."
Freemium and Advertising
Skype
Skype Internet phone service is a typical example of business model Freemium. The program that allows you to call between computers is free. If you want to call a landline or cell phone of a computer or have a mailbox associated with your Skype account, you have to pay. The free program has hundreds of millions of users and the only 10% of them use paid services.
Is the model freemium on the side of tourism can work?. There are numerous applications for mobile phones with this modality. Some travel agencies can download your reservation or search application for free and charge after 100 searches (or after the first 5 bookings, or after the first year,...). Each company's strategy, of course, is different, and there are just allowing download and free use. Some companies distribute free applications for tourists; But let us think about companies that are advertised in them. They are allowed to register for free in the application, but you can count on value-added services paying a fee. This means that it creates a mixed model B2B and Freemium.
However, there are two things that almost all agree on:
Freemium models works better with SaaS (software as a service) companies where you have a basic version or lite and after an update to version complete, once they have become addicted to your software and you can not live without it
Only a small percentage of people (1% - 4% on average) is actually going to pay, which is OK if we are talking about a large number of people, and not so good if you're not
traffic news
Amount
Freemium is a numbers game: If only 1% of your users are going to pay you, then you need to have very large amounts of free users to have utilities for this % 1. traffic news
Value added
There is a need to create additional high value added products and services for the free user feel that it is worth paying the premium price. The value of the pleasant services must be also high because there is lot of competition for anything that's free in Internet.
MailChimp created a premium plan for a year and a half. The results speak for themselves: 12 months, the users of payment had grown 150%, the benefits a 650% and ACC had been reduced by 8%. Sorted figures that anyone would sign. Also increased their problems, so you have to take into account a trade-off between performance and problems
LinkedIn is an example of a company that successfully applies the freemium model. LinkedIn basic services are free, but the company charges a monthly subscription for additional services. Reuters reports that LinkedIn recently published its financial results and subscriptions premium from utilities rose 60% in the second quarter of this year, for a total of $23.9 million.
SurveyMonkey
Another example is SurveyMonkey that allows to conduct surveys of up to 10 questions and 100 responses for free and charged $200 per year for an unlimited number of questions and answers. SurveyMonkey CEO said "Fundamentally changed the way of thinking the business."
Freemium and Advertising
Skype
Skype Internet phone service is a typical example of business model Freemium. The program that allows you to call between computers is free. If you want to call a landline or cell phone of a computer or have a mailbox associated with your Skype account, you have to pay. The free program has hundreds of millions of users and the only 10% of them use paid services.
Is the model freemium on the side of tourism can work?. There are numerous applications for mobile phones with this modality. Some travel agencies can download your reservation or search application for free and charge after 100 searches (or after the first 5 bookings, or after the first year,...). Each company's strategy, of course, is different, and there are just allowing download and free use. Some companies distribute free applications for tourists; But let us think about companies that are advertised in them. They are allowed to register for free in the application, but you can count on value-added services paying a fee. This means that it creates a mixed model B2B and Freemium.
However, there are two things that almost all agree on:
Freemium models works better with SaaS (software as a service) companies where you have a basic version or lite and after an update to version complete, once they have become addicted to your software and you can not live without it
Only a small percentage of people (1% - 4% on average) is actually going to pay, which is OK if we are talking about a large number of people, and not so good if you're not
traffic news
Ultimately, it is necessary a good product that is worth paying. The free version should not of poor quality, because that is ultimately what is reflected in the pay version and is going to tempt the people on board, but must give customers a reason to make the leap. And, ideally, should be done without pulling the rug from under customers while they are enjoying the free version.Freemium and Advertising
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