5 Perspectives on How to Succeed with a Freemium Business Model

Doing market research shouldn’t only focus on the the scale of the problem and the competitors in the space, but also you should look for lessons learned from folks in the space or similar business models and conferences provide some great insights from people that have been there done that.   The recent rash of featured freemium presentations on Slideshare’s homepage provides some lessons learned which any product marketer can learn from, even if you don’t have a freemium offering.

The presentations were from the recent Freemium Summit, which has provided some really good information for folks who want to know more about those sort of things.  I certainly have seen freemiums which have worked and those that haven’t, but there are some common themes which appear to have emerged from the presentations at the event – constant customer communication, ruthless analytics and fact based packaging are critical.

Below are 5 presentations from the conference which provide interesting insights and perspectives on why freemium works.

1. YouSendit’s Ranjith Kumaran has some interesting graphs on paid and free usage trends, but also confirms that usage metrics and lifetime value are critical to managing a freemium business.  It’s about the product, customer and the community over time.

2. Survey Monkey’s Brent Chudoba’s overview is little text heavy, but that’s why it’s a good read on the importance of internationalization to scale a company online.

3. Ning overview from Taylor Bueley cites integration and partnerships as critical to growth for such platforms:

4. Owen Tripp recommends starting with a freemium model when launching/creating a new product category like Reputation Defender is doing.  If people don’t know the market, it’s hard to charge for it and it’s hard to build a compelling offering which address the market problem without users/customers, so free was a great model to use to learn the market and build a product they can ultimately charge for.

5. Hootsuite’s Ryan Holmes explains that packaging is critical to establishing multiple revenue channels for how their customers really use the product.

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12 Comments

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  • Reply 2010 in Review December 27, 2010 at 7:40 am

    […] 5 Insights on Freemium Business Models Doing market research shouldn’t only focus on the the scale of the problem and the competitors in the space, but also you should look for lessons learned from folks in the space or similar business models and conferences provide some great insights from people that have been there done that.   The recent rash of featured freemium presentations on Slideshare’s homepage provides some lessons learned which any product marketer can learn from, even if you don’t have a freemium offering. […]

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    […] 5 Freemium Business Models […]

  • Reply Business Model Innovation – Picking the right model matters July 6, 2011 at 8:28 am

    […] doesn’t matter what type of model – a freemium business model, utility oriented cloud model or even a legacy on-premise licensing approach all are equally valid […]

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