Is Freemium even free?

 

So late last year Pokemon Go was the most addictive app to come out in a long time (well since Candy Crush). Not only was it nostalgic to all us 90s kids, but it was free, a word that is music to my ears.

I mean who wants to pay for an app?

However, Pokemon Go had one very long and annoying draw back. Running out of Pokeballs just when you found a Gyarados and not having enough lures or incense to capture those rare Pokemon.

The good news is that if you really couldn’t be bothered waiting or walking to a PokeStop, you could buy incense to make those Pokemon come to you.

Haha! Yes you’ve now beaten the system. Big cooperates can’t make you unwillingly excersise now right?

Well, it depends on what you count as winning. If you want to sit on your but and play a free game by purchasing items with real money, I think the game has got you beat. Congratulations, you have now entered the freemium universe.


So what is Freemium?

Basically, Freemium is a produce provided to consumers free of charge with the option of purchasing additional extras (features, life, coins) to enhance the experience.

With almost all free games on the App store, freemium is the way for organisations to make revenue. This model accounts for 98% of the revenue in google’s app store and 95% in apple’s app store.

It removes the traditional way that companies try to make money off free services, such as forced sales and lengthy advertising pop up campaigns and is more subtle and persuasive.

 

Consumers are lured into making in app purchases by the simple and easy journey. Within a few clicks and for $0.99 you may have scored yourself 100 magic coins (whatever that means)! They also ensure that at the worst moment, you’ll run out of life or coins, just as you’re meeting a boss and if you die you’ll loose all your work up until this point. In moments like that, it’s as tempting as ever.

There is a brilliant episode of South Park, where it depicts the ease of using and getting addicted to Freemium products.


However, it is not only games that utilise this Freemium model. LinkedIn, a business orientated social media platform, provides the core platform to users for free, while creating profit by providing something extra.

Dropbox is the same, allowing every user 2 gigs of storage space. When that runs out, you can upgrade to 100 gigs for just $9.99 a month! If you’re just into storing documents, the free version is good enough, but if you’re into saving photos, that 100 gigs looks pretty good.

Even WordPress uses Freemium! Starting a blog is so easy, and everything you need is there. However, if you want to go further, find out specific statistics and better engage with your audience, that’s going to cost you.

Only a small percentage of users actually engage in the premium services offered with a freemium model.


Want more information on how game companies are encouraging people to utilise the premium service? Take a look at this video:

Do you think more marketers should look into using Freemium as a business model?

What about social media? We’ve spoken about FB and Instagram and Snapchat’s use of advertising models. Would this be a less invasive option to choose?

Let me know in the comments below!

 

https://hbr.org/2014/05/making-freemium-work

http://www.freemium.org/about-us/

 

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4 thoughts on “Is Freemium even free?

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  1. Great blogpost! I definitely think marketers should look into the freemium model just from the examples you gave! Implementing the model into social media may be difficult, however if marketers do it very subtly and not change too many features it may work.

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    1. I agree with what you are saying. Social Media is a delicate platform to modify as their loyal users are already confident and comfortable in using it. As soon as you implement a new model, such as Freemium, I wonder how many users they would lose? I did recently see Twitter is trying to implement this model.

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  2. I think Freemium is a really clever concept for apps, that is, when it’s implemented correctly. I once downloaded a recipe app (for free) that claimed it would have “in app purchases”. Little did I know they would give you access to all of two recipes, with the rest purchasable! I immediately deleted the app. If people are going to be enticed to make in-app purchases, there needs to be enough content available for free to get people to see the value and benefit in using the app. Otherwise, like me, they would probably just get rid of the app. This is why Freemium works so well in games, because like you said people are hooked and they want to move to the next level, or achieve a higher score.

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    1. I do think they sometime have ‘click bait’ type of descriptions to get you to download the app. Sometimes they work if the content is good enough, however, they need to at least give you enough to draw you in and want more. For two recipes I can fully understand why you deleted the app!! I would too!
      I wonder how the developers of the app could have made it more enticing?
      For a game, it is a lot easier that a recipe app.
      Thanks for your comments!

      Like

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