What The Freemium!?

A guide to making your product... FREE!

Freemium gets a lot of hate. I hear these complaints all the time:

• “The free tier devalues the product”

• “Free users are ‘junk’ users and ruin the pipeline”

• “If customers can’t be directly monetized, they’re not valuable to the business”

A lot of these comments miss the point. But before we get there, let’s be clear about what freemium is—and what it isn’t. 

Freemium: what is it?

First of all, freemium is not a quick fix. It’s not some plan you can slap on top of your paid offering to drive more conversions. Freemium is an intentional business strategy that must be carefully constructed. More specifically, it’s a model in which a company offers a limited version of a product or service for free while charging for additional features, usage, functionality, or services. The goal of freemium is to attract a large number of users and build an engaged user base that can be continuously nurtured to convert to paid. 

Freemium is most often used in the software industry:

• Spotify offers free access to …