Implementing freemium - Freemium Blog

So you have been reading and hearing about freemium. Maybe you even think it would make sense for your company. Your company fits reasonably well within the 4 characteristics.
The question you might be left with is, “How do I implement this”?

In order to help companies implement freemium, I have set up two conditions for success. These are not a guaranty that freemium will be a success for your company. Your company might not be among the ones “who should use freemium”. Yet if you want to use freemium, you should fulfill these two conditions when implementing.

Spread the word, (using social media)

The principle behind freemium is that
“When the supply of a product increases, the demand for its complimentary products increases.”

So the success of freemium is dependent on having a free product that reaches a certain level of popularity, thus facilitating the sale of complimentary products. For such an outcome, you need to have a quality free product that people want. Even so, the fact remains that people will not use the free product unless they know about it.

As per a desirable quality of freemium, a free product is something that can be duplicated and distributed digitally. This means that these products are easily accessible online. This makes them perfect candidates for being promoted online.

Social media is a phrase used to describe the social platforms available on the internet. This could be everything from blogs to facebook. (More about freemium and social media)

The people generating and using social media like to pass on information about valuable resources. If there is a thing that is very interesting, it will often be written about in blogs and twitter. There will be videos on youtube and discussions on facebook. This is why many people call social media an amplified word of mouth effect. Like with word of mouth in real life, people will talk about something valuable and interesting, if they know about it.

This practice of using social media to promote a free product is well known within the internet business. As the use of freemium is spreads out into other industries, more and more industries can use the same approach and “spread the word”.

One important point is that spreading the word through social media should not be done by sending direct mail to everyone you can think of. In this world there are codes of conduct you need to follow in order to get exposure. (More about successfully using social media)

Adapt business model

Spreading the word looks at spreading the free products as much as possible, which creates a bigger demand for complimentary products, but will you be able to meet that demand?
In order to create a viable business around freemium, you need complimentary products – something that can convert the positive attention from the free product into revenue.

Let’s look at this issue using my favorite example, Skype. They have a quality free product in the normal download, which lets you call between computers for free. They then sell things like Skype out, which is a perfect supplement to the free product. When you are using free Skype there is a button you can push to call normal phones and it seamlessly gets you started using the complimentary product Skype out.

The business model is important if you want to be successful using freemium. If you don’t have something to sell, the positive attention generated by the free product is “wasted”.
Imagine if Skype had offered a free client and offered (sold) physical phones as complimentary product. The free program might have been just as big a success today, but there would not have been a lot of revenue.

Similarly, many businesses would not have products suited for complimenting a free product. Now then, if your company wants to successfully adopt freemium, you would have to look at your business model.

Adapting the business model need not to be difficult or complicated, but it surely demands a conscious and focused effort.
(More about adapting business models)

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