this disruptive pricing strategy has been growing. It was previously used when the subscription for the product was uncertain. It was introduced with frugal costs per user and no marketing budgets. But by understanding the user’s conversion and the banking users all the while, now Freemium can improve the conversion through rapid iteration and superior user interfaces and experiences surprising the users constantly. Thus making they stick to the product.
Freemium Funnel – The four stages
The Freemium strategy is highly dominant in the mobile world is due to its sales funnel. The sales funnel basically depicts the process involved in getting traction and making customers stick to the products. The funnel basically has four stages namely (a) Awareness, (b) Interest, (c) Desire and (d) Action.
Freemium Sales Funnel and its four stages
For example, in the scenario of a mobile application – the first step is get notice and get picked amongst the gamut of other apps the user is provided with. Secondly, he or she could inculcate an interest based on the reviews for the application. Since the application is free for the basic configurations the user does not hesitate to get the experience. Freemium does not provide a time frame unlike the traditional demo products where the user is barred from using the product after the time frame, hence the user could be converted in to a paying customer in due course of time. This happens when he or she has formed a desire for the product or the service. The last stage is the action stage when the leads are turned into paying customers generating revenue.
Conclusion
As said by Nick Earl that “The market has absolutely spoken so loudly that freemium is the future," , freemium model is turning out to be the most advantageous model to various online based games and apps because, it has actually jammed the human mentality of experiencing a thing before paying for it.
- Raja Tejas Yerramalli
& Gandham Lakshmi Jyothi
Institute - NALSAR University of Law, Hyderabad – Centre for Management Studies
30
FMS Scholastic Council