The Idea

“Freemium” is a term that refers to a product or service that gives a part of it away for free in return for (hopefully) users that will eventually turn in to customers. Marketers know that only a small minority of users may actually convert – but you get:

  • Feedback
  • A chance to market new products to an existing audience
  • Get people to try your product that wouldn’t otherwise
  • An opportunity to build trust
  • “Warm leads” that can convert

In return for

  • Supporting a free user base
  • Cheapskate customers that are nothing but a loss

Provide Real Value

The idea is to give something of value that people can actually use – not just a gimmicky “free course” or something like that. That means it needs to be low-cost to offer in relation to the price of your product and size of the market.

Some examples are travel-sized samples, software with limited functionality, a product with obvious branding on it, free consultations or services etc. This works best for software companies for obvious reasons but the term goes hand-in-hand with the retail term “loss-leader”. It works great for some companies and poorly for others, so give it some thought and maybe a few tests.

Metrics

  • Ease: Doable
  • Cost: $100+
  • Scope: Medium
  • Speed: Quick
  • Reach: Global