Free Internet Traffics Attraction Factor

Freemium is the latest business model that new startup companies are focusing their eyes on these days with the intention of making concrete profits out of such an innovative business style. What, actually, is freemium? What makes it such a radical business concept?

In a nutshell, freemium (a coined term from the words “free” and “premium”) or free giveaway is a business model with the premise of giving away the company’s product (or service) for free, with an eye of making a profit in the long run. The root idea is to cultivate a paying customer base out of the collated free users.

Conversion

Individual users who belong to the free customer base (referred to as lower tier) can always move up to the paying customer base. The charges would be tagged on upgrades and new features that are new add-ons to the original free software or service.

These paying customers (upper tier), although significantly very small compared to the free customer group, is being hoped to be able to sustain the business viability of the company. The idea is based on the statistics that the growth of free customer base would in turn yield a bigger paying customer base as well.

With freemium business model, customers are required to pay only when they already had enjoyed enough significant value from their software, usually the limits of the free versions. This is different from the model where customers have to pay even before they get enough value from the software (like most shareware products).

Some sticky points

This business model looks very good on paper, but needs a good hard push to achieve. The freemium business model has to work first. Making the free users become paying customers needs some real work. (Conversion is usually less than 1 %.)

One tried method is to put enough value in the free version to drive adoption while at the same time giving enough incentive to those who pay for premium services or features or add-ons. The most important consideration is you have to make sure that the paying users can subsidize all the free users.

Benefits

From a freemium model, the benefits are found mostly in the flow of feedback and market requirements. If there are enough eyes focused on anything, you will have enough feedback, and fast.

This attention lets you focus on the product’s iteration, and this happens earlier on in the process. This is very important to young companies for the simple reason that it lowers the stakes on the decisions regarding the product’s development.

Market values

Freemium also becomes the control yardstick for companies that can deliver the data after finding out which market segments and product features have the highest value. Once you recognize who wants to pay and what they want, you certainly would know where to put up the collection box.

Freemium also means extreme precision in this part of the process. Any deviation or error and the flow is reduced, people are outraged and the business suffers. The opposite would mean more business, would yield more satisfaction and people would finally pay up.

Are you looking for Free Traffic Generation information? Giveaway or Freemium is one effective strategy to attract good quality traffics to your site. Free memberships is one good example. Try Memberships Giveaway for free or goto http://www.membershipsgiveaway.com


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