(What is freemium ?: see this link)
1 To earn money
For most companies the main reason for adapting a new business model is to post profits. By creating a lot of more attention and selling more profitable complimentary products, freemium could help you to earn more money.
2 To adapt to a digital world
Industries like newspapers and music are often said to be in a crisis. During the last couple of years, there has been a steady decline of revenue and profit.
This is because of digital production and distribution. In the past, the newspapers and large record companies were practically for selling printed news and music.
With the digital revolution, the production and distribution of news and music has become distributed. As a result of this, the previous monopolies are suffering.
With virtually free digital production and production, a similar development will take place in other industries. TV and movies are migrating on to the net; MIT open cause ware is changing the way knowledge is distributed. This will also happen to your industry
Freemium is a business model based on, and optimized for digital production.
3 To make a difference in the world
A central part of the freemium model is to give a quality product away for free. Like the quality VoIP client form Skype or the quality open source software produced by many different companies.
This free product is available for everybody, including those who could not afford it (previously) or those who could use the money for better things, say, long distance family calls for low income families, or software programs for schools in Africa.
The knowledge possessed by knowledge based companies can often be very valuable. Imagine what could happen if everybody had the knowledge and abilities you have.
4 To get goodwill
During the last couple of years, corporate social responsibility has become very popular. While companies are realising that their image is as important as the quality of their products, they are also realizing how socially responsible they are or should be.
Giving away a quality product that people find useful can make a difference in the world. It can also do what is often very important to businesses – make people aware that you are making a difference in the world. Because of the mass distribution inherent in freemium, the word about a free product would reach a lot of people.
5 To better leverage social media marketing
Social media marketing is connecting with possible clients on platforms such as flickr, youtube, liinkedin and twitter.
“PR has gone from meaning public relations to personal relationship”. This quote beautifully illustrates that Social media marketing is all about developing a relationship with people and not merely communicating to them one way.
When developing relationships with people you don’t know, it always helps to bring something to the table. The free part of freemium can be just that something.
6 For better search engine optimisation
Search engine optimisation is about getting your site to rank higher on Google. If someone searches for freemium, I would love to be the first result in Google.
One of the main criteria that Google uses to decide this is the pages linking to your site.
Also, the quality and number of these pages plays a great role in determining how highly you will rank.
If you give away a quality free product on your site, a lot of people would link to it, and this could do wonders for your Google ranking.
7 To differentiate your brand
Within the IT world, the freemium model is common place. In other areas of business it is a novelty.
By releasing their latest album for free, Nine Inch Nails positioned themselves as “fan friendly” within the music business. If your company is among the first in your industry to do this, it would greatly differentiate you from the rest of the industry players.
8 To get more input from your costumers
User driven innovation is becoming increasingly popular – the idea is that the users of your product can be a great resource in developing your product.
By releasing a quality free product, your ideas would reach more people. If ask them in the right way, they might just become an invaluable resource in further development.
9 to open new possibilities
By mass distribution of a quality product, a great deal of people will learn about you. Some of these people will think that you are a rock star within your field and open up new possibilities.
This could be a lecture in a place you have never heard about or a translation of your book into Japanese!
Remember
One thing to remember for these things to work – your free product has to be a quality product that people truly want.
Also, freemium is not a model that will work or everyone. You will need to carefully see if it could be beneficial for your company.
What do you think? Are there any more? I would love to hear your opinion.
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