Crafting an Effective Freemium Model for Premium Upgrades

Freemiums have become a mandatory part of the subscription business model. It is a prosperous way to aim at acquiring as many customers as possible. Freemium enables them to test before buying, a never-failed marketing approach. Customers or subscribers are more interested in knowing the value that they will get after subscribing.

Freemium is the business growth tactic that enables you to hook customers by offering a free version of your product. Freemium is not free-trial. A free trial is a limited-time access to the premium product. In our previous articles, we have discussed the difference, value, and requirements of these in length.

This piece of writing, exclusively, concentrates on the facets of freemiums.

Let’s begin with how Freemiums and Free Trials serve the purpose of creating the community for a SaaS product in a market.

Freemium vs Free Trial

Freemium is a pricing strategy famous among the SaaS business community. The strategy is opted to acquire more customers by offering free of charge certain features of a SaaS product or services that you offer. You can plan and manage your freemium strategy at your subscription management software platforms.

Free trials are also used as a customer retention strategy but the concept is based on offering certain features of a product for a limited time period. If the user analyses your product to be useful, he will turn to be a potential customer.

Also Read: SaaS Free Trial vs. SaaS Freemium—An Ultimate Exploration of the Option That Drives More Paying Customers and How!

Now that the thin line between freemium and free trials is clear, you will understand the essentials of making a fail-safe freemium model in a better way that includes:


Devise a Freemium Model That Suits Your Business

If a freemium model is successful for one business, it will not necessarily be workable for other businesses as well. You will have to plan your freemium model based on the nature of your business, clientele, the region where you operate, and a lot more other factors. You can use the SubscriptionFlow platform to come up with a workable freemium model for your subscription business.

Even when you succeed in making and adopting a freemium model, you will have to think about post-adopting customer behaviour regarding:

  • Upgrading to the premium
  • Customer retention for premium

Your freemium plan ought to include nurturing new subscribers to ensure customer retention. From classical freemium to freeware, there are many types of freemium models but there is no strict rule that one needs to follow to adopt a freemium. You can go as per your business niche and requirements.

Optimize User Experience Constantly

The purpose of a freemium model does not end with customer acquisition. If you do not optimize the user experience, the foundation of your freemium model can collapse. Unsatisfactory customers not only cancel the subscription but leave negative reviews, which can directly affect your freemium model.

Once the customer is acquired, your engine should start working to retain that customer. The freemium models are interlinked with marketing strategies and branding. They not only help you acquire potential customers but also play role in branding (but for that you need to integrate your freemium plan well with marketing strategy and customer experience policies).

Also Read: Optimize your Freemium Subscriptions Conversion Rate and Business Health with SubscriptionFlow

Balance the Freemium and Premium

One of the causes of the failure of the fermium models is the failure to maintain the balance between freemium and premium. You must add features in your freemium that are sufficient to attract new users and urge the existing users to stay on your platform. Furthermore, your premium version should have features that the user considers worthy to pay for.

These different features of the freemium and the premium will maintain certain standards of user experience. You can maintain this balance by opting for the best practices of customer experience (CX). Here are some tips that can help you in upholding the standards of freemium and premium:

  • Offer some rewards to the premium users when they switch from freemium to premium.
  • Emanate the idea on social media platforms that you are cultivating a community of premium users. It will establish the mindset at the customers’ side that many people use the premium version so, it will surely be valuable.
  • Be communicative with freemium users and advertise your premium to remind them your freemium version can offer more features.
  • Personalize the user experience to avoid churn because when awards are given to those who have recently adopted premium, it makes old premium users feel neglected.

Also Read: Everything You Need to Know about Dunning Management for SaaS Business and how it can Reduce Churn

Build A Community of Users & Customers

If you are planning a freemium for your SaaS business, always try to build a community. Sometimes, marketing and advertising annoy users so much that they never turn to be your customers. In worst cases, they stop using even the freemium. The best solution to avoid such worst-case scenarios, building a community is always helpful. People put forth questions and get their answers from other users and customers.

Such communities help in evaluating and validating SaaS products. Communication among your users helps you analyse the customer behaviour and improve the CX to increase the conversion rate. So, building the community can not only help you with your freemium model but also becomes part of your marketing and branding strategy.

Offer Training to Your Customers

Many people are afraid of converting to premium versions because they believe they are not tech-savvy and they will not be able to use the advanced features of the product for which they buy premium. You can minimize such fears by offering training to such users who turn to be your customers. Fermium version with training session becomes a complete lucrative package for the customer. It benefits not only the users but also the company – a win-win situation.

Also Read: What is Customer Success and why do You Need it for Your Subscription Business Model to Succeed?

The subscription business highly depends on the customer experience and freemiums are not only customer acquisition but also customer retention strategies. When freemiums are designed in a way that they also portray your brand, they can effectively be used for branding and marketing purposes. You can lead the subscription market by devising your own customized freemium model. If you are still unsure about your premium model, then it is totally normal because you have your own limitations and challenges. SubscriptionFlow is a recurring billing software as well as a platform where you can come with your ambiguities and get them resolved for we have a team of professionals to help you formulate the best freemium model to cater to the needs of customers.