freemium monetization model

Many revenue models can be used to monetize your application. Freemium is among the most popular, and it’s one of the most well-known ways to earn money. However, it’s not for all users. Let’s take a look at Freemium carefully and discover the reasons why it works. 

What is Freemium?

“Free” is a combination of “Free” and “Premium” together to create “Freemium.” In the Freemium revenue model, the app is provided for free to users; however certain features are locked or blocked, and users must pay a specific amount to access the features they want. The basic features of the app are available for free. However, there is a fee for premium features and exclusive ones. 

Everything valuable and available at “Free” indeed attracts users. The Freemium model of monetization attempts to draw the maximum number of users it can by showcasing the essential capabilities of the application. The aim is to keep users interested and attracted enough that a portion of engaged users will choose to purchase the premium experience for the application by paying more to the app’s publishers. Many apps by enterprises that are subscription-based use freemium to sustain a healthy revenue stream. 

The most successful games have adopted this model of revenue. Angry Birds, Clash of Clan, and Kim Kardashian’s Hollywood Game – all of them offered their free version to users at no cost. If users desire premium features or higher levels, they come at a cost. If you’re using one of the services offered by Pandora, LinkedIn, MailChimp, or SurveyMonkey, You are using an application based on an approach known as the Freemium Strategy. 

Why does Freemium work? 

Freemium is successful because it is free. People are drawn to the app and get familiar with it at their own pace. They begin to discover what they love about the application. They can understand the basics of the app. If it’s a sports app, they learn the basic strategies and moves for the game’s higher levels.  

The app’s creators offer basic instructions to ensure users understand the functions correctly. If they are satisfied with the app, they recommend the app or service to their friends and post the information on social media networks. It is no cost word of mouth advertising for new apps to the city, and it provides users’ attention and time without spending a dime. There’s some more exciting news. As The number of users grows slowly and more people join the app, more word gets out. 

Freemium is a simple model; it costs nothing and allow owners to test the market.  

How can you achieve your goals using Freemium? 

Let’s look at some tips to help you use freemium for your app’s success. 

The right offer for the right reasons 

you can tap into the market segment where users are not being served well by current providers to help you succeed. You can also identify a gap in existing products and services and capitalize on it. It doesn’t matter how fascinating your app idea is or is based on a hobby or passion; it must add value if it is to make money. It should help companies and people make money or add value to their lives like music, health, and dating apps. 

Use free features like marketing tools 

Think clearly before you decide to segregate features between paid and free users. You should use the features you give away for free as marketing tools, and you and your users should use these free features to generate buzz. It would be best if you created excitement about your product when you launch it; as many people as possible should be involved in your product launch. 

Make Your Free Users Your Evangelists 

It is worth it to have free users. They will fall in love with your app and start to spread the word about it. They become your evangelists, and you get more users. How can you support your evangelists? Create a content strategy that is explicitly targeted at them. You can offer Referral incentives to your supportive audience. Referring to happy customers who are satisfied with your app can make it more popular. Please make the most of this opportunity and take advantage of it. 

Give users a compelling reason for upgrading 

Users are savvy; they need to have a reason to upgrade. Your free version may be too suitable for your users’ needs, but it will not satisfy them. You must strike a balance to keep them engaged with free features yet make them desire more. It is essential not to give away too much. Segment users and features so that both paid and unpaid users can benefit.  

A failed example of freemium is Ning, a social network that offered nearly all of its core advantages for free. Users were not compelled to pay for its services, and it was destroyed due to giving away all valuable features for free.  

Ensuring that customers understand the benefits of becoming a paid member 

This is an important point that cannot be overemphasized. It is important to explain clearly to the customer the benefits of becoming a paid customer. Make sure he is fully informed about the premium features he will have access to. This point can be made more tangible by your content strategy. 

Your customers should be divided into segments according to their engagement with your app. Different strategies will work for different groups, and this group may require you to communicate with them at different paces, give cues, and get feedback regularly. 

The Wrap

Freemium is an effective alternative to a disruptive marketing strategy. You don’t require a large marketing budget, but you need an extensive infrastructure to support a massive crowd of users. The acceptance of the Freemium model in products, apps, and services is fast. The free product generates the attention, which is then sold as premium goods. This is a win-win for both app creators and users. Users can test the app for free, while app developers gain access to many users, which aids in quick iterations and testing to improve the UX/UI.  

Only a small portion of free users will upgrade to premium or paid services; however, it’s not an issue if it’s a tiny portion of a more extensive user base and the company is still financially viable, sustainable, and profitable. Traditional marketing strategies are changing to include new strategies such as freemium. It is said that If you’re not using free, you will compete with free, and Freemium will be around for the long haul.  

Our mobile app development company can help you develop an effective strategy for marketing your app. Call us today to learn more. 

By Anurag Rathod

Anurag Rathod is an Editor of, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.