The Forever Transaction by Robbie Kellman Baxter

Author:Robbie Kellman Baxter
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2020-03-15T00:00:00+00:00

Many businesses such as marketplaces or communities use freemium to build membership because members attract the paying subscribers.

Freemium models do a couple of other things for your business model. Even if a SurveyMonkey freemium user never upgrades to the premium version, someone receiving a survey from that person might become a paid subscriber. In other words, freemium can drive organic viral growth. This is especially important if your product connects your target buyers—for example, billing software sent to people who also have billing needs.

Many businesses such as marketplaces or communities use freemium to build membership because members attract the paying subscribers. Some companies that build products for software developers know that their products need to be familiar to all software developers, not just the ones who pay for them and routinely use them.

A final thought about free: companies sometimes give away subscriptions to influencers. These may be well-known professionals who blog or create industry insider content, or individuals inside large companies. There are times to give away subscriptions, but it’s important to understand why you’re doing it, especially in B2B, where money is rarely the hurdle preventing purchase. Sometimes higher usage is driven by charging for the product instead of giving it away. Resist the short-term desire to add another customer by focusing on long-term engagement and growth. That decision will lead to a healthier business model.

If you haven’t experimented with “free” as part of your business model, I encourage you to do it. It’s an easy exercise to test.

Start by listing all the ways you might use free—free trial, freemium, free for influencers. How could you structure these offerings? Who would they target? What behavior would they drive? Share your list with the most creative and experienced strategists in your organization—maybe even get it on the leadership team’s next meeting for a 15-minute brainstorm. It’s useful to involve leadership because they’re often the people throwing out ideas about strategic use of free at the most inopportune times.

Evaluate the cost and benefit of each idea on your list. Are these lead generation strategies, or awareness strategies? What problem are they solving and for whom?

From there, if you have any promising options, map out a small test (ping me and I’ll try to help). If you don’t have any promising options, that’s good too; you can quickly shut down well-intentioned but distracting suggestions.

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