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Freemium – Why This is a Great Business Model

Freemium is the business model I’ll be focusing on from now on. There are several reasons why I believe freemium is the business model for me, both as an author and as a solo entrepreneur.

I buy products all the time, even though I should be careful about how I spend my money. I have just started my own marketing business and I need to save money for a rainy day. That’s what they’re all telling me. But, I still keep doing (small) investments. I buy plugins, books, apps, and things every single week. It’s mostly because I love testing new things, and I love to learn, but it’s also because I really enjoy to see how people are selling their products.

That’s how I discovered freemium.

freemium

What is Freemium?

Freemium is based on two words, free and premium, and when you combine the two words you get freemium.

When you base your business on a freemium business model, you provide a product or a service for free, and you sell a premium version with advanced features.

I am a big advocate of why you should promote free, and with freemium as your business model, this makes a lot of sense. The reason why I have always enjoyed promoting free, is that I want people to test the products before making a decision to buy it.

How I will be using Freemium

I am actually not sure how I will be using freemium, at least not yet. But, since I’m about to publish a short story on Amazon (for the Kindle) and eventually later this year, I will be publishing my (Norwegian) novel, I have been thinking about doing it this way.

The short story will be sold for $0.99. It’s not really part of the freemium business model, but I’m mostly publishing it to see how hard it is, and to learn about Amazon.

My novel will be available free at iBooks as part of my freemium business model, and I’m thinking that if people like it (and I will provide a way for them to contact me and a method for me to send them updates on my next projects), they’ll eventually buy whatever I publish next.

I believe that freemium is a great way for authors to promote their books. Authors can give away the first chapter for free, and if the person reading it enjoys it, she will eventually buy the book.

What’s your thoughts on freemium as a business model?



13 responses to “Freemium – Why This is a Great Business Model”

  1. Devesh says:

    Excellent post, Jens. Freemium is a great business model and it works well with digital products. I’ve been using this method for last 12+ months and getting good response so far.

    Looking forward to reading more about your kindle ebook.

    • Hi Devesh,

      I just recently started to think about Freemium, even though I have experienced it for a long time buying products. It’s so obvious to me that this is a great model, but hopefully it will work as well for other products (like books) as for digital products 🙂

      I am thinking that freemium might also be a way to sell my “offline” services to local clients, but I am not sure how (at least not yet) 🙂

  2. Bill Dorman says:

    Yeah, I’ll be contacting you to translate it for me……..

    And I never told you not to spend it……..you can’t take it with you……..just sayin’………:).

    It will be interesting to see an ‘update’ 3 mos from now and see if this worked out for you.

  3. Carolyn says:

    Hi Jens, Freemium is big in the tech world. App developers have learned that it’s best to give away a free version of their app, then charge for higher levels, ad-free or more features.

    You’re very smart to incorporate freemium into your business model. Perhaps you could have your novel be free in Norwegian but charge for it in English? Or should Bill and I start translating now?

    • That’s a great way to use freemium. I haven’t thought about publishing the Norwegian version for free and charge for the English. Thanks. This might work, even though I’m not sure when it will be available 🙂

  4. Hi Jens,
    I have to admit, although I’m familiar with the business model, the term “freemium” is new to me. I would like to commend you on your honesty when you admit that you’re not quite sure how you’re going to implement this strategy yet. It’s refreshing when a blogger takes us on a journey with them. It will be interesting to find out what you discover and to learn from you.

    As for the business model, I can’t help but think of CommentLuv as an excellent example. Anyone who is unsure if they want to invest in the premium version can easily download and use the free version of this plugin. Actually, it would be interesting to know what the conversion rate is on people who have started with the free version and then upgraded.

  5. Terry Conti says:

    Hi there Jens,

    I like the word Freemium. It says it all! Provide free stuff that is of value! Providing value, I’d like to call educational marketing.

    Freemium can be done in many different ways. I particularly like what you state, providing one free chapter, is an excellent idea!

    You can also provide a freemium report in exchange for an email address and build your mailing list!

    Educate so when you recommend selling a back end product within the freemium report, chances are so much better an interested person will buy from you vs just selling cold.

    It’s better to sell to someone who has raised their hand letting you know they are interested than it is to sell randomly and with an email address if they don’t make a purchase now they can later.

    Freemium is the way to go. Thanks for sharing,

    Terry Conti

    • That’s great examples. I’ve been thinking about giving away my novel for free and in exchange for my free novel I’ll build a list of people who’d be interested to pay for my next novel 🙂

  6. Helene says:

    Really interesting, I haven’t heard about the expression ‘freemium’ before, although I have already known this business model. A great example for that are the applications for smartphones. There is a premium version available from the most free apps, which don’t contain advertisements and have got more features. I really like your point on using this business model as a freelancer/self-publisher, your tips are really helpful.

    • Hi Helene,

      That’s true. I have bought many apps for my iPhone and they’ve started out as free, and then after I have tested them, I have ended up buying the ones I really enjoy 🙂

      Thanks a lot for your kind words.

  7. So Freemium simply means that, a kind of product is only a trial version because it is ‘Free’ and when the end-user likes the product he/she can purchase it to make it ‘Premium’. That is what I understand about that freemium business model.

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