As we have already seen, a freemium plan has many advantages , both for the company and for the user. For the latter, the main and obvious one is to enjoy a service for free, without the obligation to buy anything, if they do not wish to.
From a business perspective, this allows for a huge number of users who generate traffic, word of mouth and data acquisition . However, many companies make the mistake of offering free service users too many features, a choice that can limit the benefit of the premium version, which users may never feel the need for. This can create an economic problem, having created an infrastructure whose costs are not covered by customer revenues.
Finally, the freemium model allows products or new products to be launched to a potentially huge audience , carrying out very effective acceptance tests before eventually making the same product or service payable. Users, for their part, have the possibility of trying out a product or service for free for a period of time and experiencing its potential directly, before deciding whether to buy it. A winning strategy for both users and companies.
Freemium model, another way to monetize a business
Examples of freemium products
Examples of the freemium model include all the major social sweden whatsapp data networks . Users do not actually pay to register or use Facebook or Instagram, but the company, Meta, earns its income in other ways, such as selling advertising space to companies or, but this is a controversial issue that is being regulated, by exploiting the data of registered users.
In fact, companies, as well as influencers, are not obliged to buy advertising space and can use these platforms completely free of charge. However, if they want to reach more people, or reach those who are part of their commercial target, they must pay. The freemium model has guaranteed their dissemination on a large scale , making them an extremely attractive showcase for anyone who wants to promote something, be it a product, a cause or a person.
There are other examples of the freemium model being used , including Spotify, one of the most widely used music streaming apps in the world. Spotify is free to download and use, but the price to pay is in its use. In fact, with the free app you can listen to all songs, unlimitedly, but you cannot choose which song to play. You must select an artist and start 'shuffle', waiting for the desired song to play. And, of course, you must listen to the ads, another way Spotify makes money.
If you want to avoid ads and decide freely which song to play, you have to activate a premium (paid) subscription. The same applies to many smartphone and tablet apps, which can be downloaded and used for free up to a certain limit of functions, but which must be integrated with the premium version to unlock additional features . From dating apps, such as Tinder, to those for gardening or fitness, and the same for many video games.