Between emerging social media platforms, the continual push for digital transparency, and more, customers today are more savvy and skeptical than ever before… and therein lies the challenge in converting them. A new model, however, is designed to circumvent this challenge, thus posing a compromise for businesses and consumers alike. Enter: The Freemium Model.
Filing Through The Freemium Facts
The math is simple: Free Content + Premium Content = The Freemium Model.
In other words, freemium content utilizes a two-tiered conversion strategy aimed at targeting new leads with free content and/or services. This is because, by offering your audience access to your product with no strings attached, you can continually build trust with them — thereby optimizing your ability to retain their loyalty long-term.
What’s more, once they’ve gotten a taste for your free content, the key is to pique their interest with an enhanced or expanded version of those products, services, or content available only when they take the next step with their wallet.
“Because free features are a potent marketing tool, the model allows a new venture to scale up and attract a user base without expending resources on costly ad campaigns or a traditional sales force,” as explained by the Harvard Business Review.
In other words, freemium content is all about strategically dangling the carrot in front of your audiences’ noses in an effort to lower your overall customer acquisition cost (CAC).
Finding Today’s Freemium Models
“Successful freemium apps offer continuously evolving content or services to provide value to users and to encourage engagement and monetization,” Apple reports on their App Store website. “Engaged users sometimes move quickly through content, and planning and resources are required to keep the pipeline full.”
Thus, one prime example of a freemium model in today’s market would be that of Spotify.
Providing users with a wide, nearly unlimited library of music and podcasts across all genres and industries, Spotify is arguably one of the most widely accessed music streaming apps across the globe today.
Of course, you can always use Spotify for free, in which case you’re provided with the same general services — like content access, discovery tools, playlist creation capabilities, and even music blacklisting options — as with Spotify Premium.
The drawbacks? Users can’t endlessly skip songs, download content to listen to offline, avoid annoying ads, or further customize their unique Spotify algorithms.
They can, however, do all of those things with Spotify Premium — which makes it entirely unsurprising that it has over 155 million paying subscribers today.
Fitting Freemium Into Your Marketing Plan
If freemium sounds like a fresh and flexible new model for your business, the only question, then, is how best to effectively integrate it into your marketing strategy.
After all, if you’re attracting plenty of new leads but are finding that few — if any — are paying for your premium services, you may be offering too much at the basic level, thereby dampening the allure of your higher-end product(s).
On the other hand, if you’re not attracting any new users at all, it’s time to reconsider what other boosts you can give to your basic offerings.
But don’t worry, if you’re struggling to find the best balance for your business, you don’t have to continue taking shots in the dark.
Here at Mad Men Marketing, we recognize that freemium content offers an excellent avenue for interacting with your audience, as opposed to interrupting them and consequently chasing them away. That’s why our team specializes in designing and developing a strategy in accordance with your business’s unique needs and goals — because, at the end of the day, conversion is key.
Effective freemium strategies are not far out of reach. To learn more about how our team can optimize your marketing model, contact Mad Men Marketing today by calling 904-355-1766!