29/07/2021
freemium model

Freemium model for business with Case Study

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Experiential marketing is a low-cost marketing technique to acquire new customers either by offering some product for free or giving a low-cost sample to the identified customers. giving sample product at minimum price or free is freemium model ( free + premium = freemium )

Giving a product free to your customers is called Freemium technique and giving a low-cost sample to your customers is called Sampling technique.

In both cases, if the customer tried your product and is happy with the experience, then he/she certainly will buy your product.

 Let’s understand in detail about the Freemium and Sampling technique to acquire new customers.

Freemium technique

Give something free to your customer so that he becomes happy and buy the premium product on his second visit. Free plus Premium is called Freemium.

Examples of Freemium Model
A. YouTube: After providing free content since its founding, the world’s largest video channel has started YouTube premium.

B. Spotify (In foreign countries) or Ganna.com (in India): These two music channels gives you song free of cost initially and then asks you to buy thepremium section. Its premium costs only Rs. 100per month. In the premium section, new songs, premium songs, and your favourite songs will come first and there will be no advertisements.

C. Linkedin: The world’s largest professional website is used for hiring people because all the professionals are present on this platform. If you are using Linkedin free of cost, then you will get limited features. However, if you take premium services, then it becomes easy for you to hire people, you will get maximum reach, maximum view, and skilled people.

Sampling Technique

Give the sample of a product to your customer so that he becomes happy and buy 1he product on his next visit. You can provide two types of samples — free samples and low-cost samples.
This is one of the low-cost marketing techniques in which you select the right customer and give him product either free of cost or in the form of a sample. If the customer likes it, then he will come to buy it.

Example of sampling

  1. Vistara Airlines: During travel, a sample of a perfume named skinn by Titan is given to the passengers as a gift The simple is provided in the 5ml or 10ml bottle People like the perfume very much and purchase it from the skinn stores located at different airports in India.
  2. shampoo and oil brands provide their products in the form of small sachets of Rs. 1-5. If customers like it, they buy the whole bottle.

Benefits of Freemium / Sampling

When you provide a small sample to the customer free of cost, it influences his consumer behavior. If you give the sample to the right customer, then it costs very less.
( Freemium model )Freemium / Sampling will help you in the following ways:

.Provides conversion benefit
.Increases brand awareness
.Increases brand recall value
. Increases the repeat customers. Improve customer loyalty

Sample are not mass product, they are test
product

Brands collect customer data using samples They determine how customer is reacting or behaving to the product They take feedback from the customers

It is test and launch and not launch and test

If the customer likes the product, then start its mass production.
Initially, you can ask your existing customer to test the sample They will provide you feedback instantly If you get positive feedback from all the existing customers, then start the mass production.

You will not decide whether the customer needs a product or not. customer himself will decide this.

Try before you buy

You need to do something in a manner that the customer is able to try your product before buying it Experiential marketing, freemium model, and sampling model are the sure ways to keep your product in the hands of your customers.

When your product is reached in the hands of your customers, he/she will atleast try it. Without investing, you enable your customer to try the product.

It will also create a memorable and emotional connect with the customer.

For example:
You have visited a McDonald outlet and you get a free sample cake or ice cream along with your order.
You will find the free cake tastier than the food items you have purchased. You will always remember it.

Everyone likes tree gifts or low-cost products
you are able to build big demographic or
geographic expansion at low-cost.
clinic Plus shampoo the 6ml sachet of Clinic Plus
shampoo is sold for Rs. 1. So, its 600ml bottle
should be sold for Rs. 100. But, it is not the case.
The 600ml bottle is sold for Rs. 325.

They have sold the small sachet at a low price but they have sold the bottle at a higher price.

Brands are able to do so because a customer did not calculate that if the sachet of 6ml is of Rs. 1, then the 600ml bottle should be of Rs. 100. Customer only observes that he is getting 25% off on the bottle and 20% extra shampoo. So, he purchases the shampoo.

Colgate toothpaste: 50 g small tube ot Colgate toothpaste is sold for Rs. 20. So, its 1 50g big tube should be sold for Rs. 60 but you will get the big tube of Rs. 92. Customer did not think of this because he is getting 20% extra.

These brands are not doing sampling free of cost. They sell it for some price.

So, you can do experiential marketing through freemium or sampling.

What is the Freemium Business model?

Freemium business model where users get to use a basic product or service for free, but must pay for a premium version with additional features.

Do Freemium model work?

 Freemium model can help drive faster recurring revenue and profit growth than a paid-only model.

What is Freemium strategy?

The words “free” and “premium”, is a pricing strategy by which a basic product or service is provided free of charge, but money is charged for additional features

Difference between Freemium and Free

Freemium is a customer acquisition model without a time limit, A free trial, on the other hand, is a customer acquisition model limited amount of time.


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