Many a times our Small and Medium Enterprise segment partners have approached us to discuss new business models and ideas. One of the key models which was strongly debated and discussed is the 'freemium' business model.
But how can you position your services just for no price at all?
Well, that's the trick. First things first, as they say and we have been hearing that there are no free lunches in this world. The statement is true and we are not here to make an exception to it. But sure we are here to present a different view and take on what's free - actually! Obviously no business can sustain by giving away all its services for free. A business is out there to make money and that's the way it is.
Lets try and understand this simply, what we are suggesting is: to create a model/ space in your business where you give a set of your services for free, they may possibly be sponsor/ad supported; efficient customers acquisition through word-of-mouth, organic search marketing, etc. Once you see the volumes building, you can offer premium priced, value added services or an enhanced version of your service to your customer base.
Would the customer not become used to 'free'?
Many of the SMEs suggested that the customer hence will become used to the tag 'free'. This will lead to de-valuing their brand proposition and also their value in the market. Lets understand why not. You are essentially creating a powerful distinction between the 'free' and 'with value' services that you provide.
For the freemium model to be successful, you have to clearly communicate to your customers/ consumers about the value add's (free) services and the value added (premium) services that you provide. Once this distinction is strongly set and metrics to track the results is put into place, your business can surely reap the benefits of going free!
Successful example of a freemium model
LinkedIn: One of the most powerful 'professional' social networks on the web. All the benefits that you/ your business derives from it are free (majorly all of them). That's the key. Creating an account on LinkedIn does not costs you a penny, other than your time to do so. Also the basic part of networking is free. You can also create a network with people you want for no money at all, globally.
But how does Linkedin sustain then? The freemium model essentially allows LinkedIn to have key information available with them of professionals all over the globe which many lead generation business, business advertisers, recruiters are ready to pay for. Hence millions of users across the globe are effectively pooling together to create a shared knowledge base which many other businesses are ready to pay for.
Freemium for the SMEs
The freemium model is an innovative approach to acquire customers and doing business. Not one size fits all, hence the objectives of implementing a freemium model may differ from business to business. The freemium model has to be custom designed and built into your business model. It may not be about customer acquisition only.
At IndiaMART Knowledge Services we are always partners in growth for SMEs. If you have any queries regarding the freemium model, drop in a comment to this post and our team of experts will get in touch with you.
But how can you position your services just for no price at all?
Well, that's the trick. First things first, as they say and we have been hearing that there are no free lunches in this world. The statement is true and we are not here to make an exception to it. But sure we are here to present a different view and take on what's free - actually! Obviously no business can sustain by giving away all its services for free. A business is out there to make money and that's the way it is.
Lets try and understand this simply, what we are suggesting is: to create a model/ space in your business where you give a set of your services for free, they may possibly be sponsor/ad supported; efficient customers acquisition through word-of-mouth, organic search marketing, etc. Once you see the volumes building, you can offer premium priced, value added services or an enhanced version of your service to your customer base.
source: http://newmediamonthly.co.uk/wp-content/uploads/2010/11/freemium_model.gif
Would the customer not become used to 'free'?
Many of the SMEs suggested that the customer hence will become used to the tag 'free'. This will lead to de-valuing their brand proposition and also their value in the market. Lets understand why not. You are essentially creating a powerful distinction between the 'free' and 'with value' services that you provide.
For the freemium model to be successful, you have to clearly communicate to your customers/ consumers about the value add's (free) services and the value added (premium) services that you provide. Once this distinction is strongly set and metrics to track the results is put into place, your business can surely reap the benefits of going free!
Successful example of a freemium model
LinkedIn: One of the most powerful 'professional' social networks on the web. All the benefits that you/ your business derives from it are free (majorly all of them). That's the key. Creating an account on LinkedIn does not costs you a penny, other than your time to do so. Also the basic part of networking is free. You can also create a network with people you want for no money at all, globally.
But how does Linkedin sustain then? The freemium model essentially allows LinkedIn to have key information available with them of professionals all over the globe which many lead generation business, business advertisers, recruiters are ready to pay for. Hence millions of users across the globe are effectively pooling together to create a shared knowledge base which many other businesses are ready to pay for.
Freemium for the SMEs
The freemium model is an innovative approach to acquire customers and doing business. Not one size fits all, hence the objectives of implementing a freemium model may differ from business to business. The freemium model has to be custom designed and built into your business model. It may not be about customer acquisition only.
At IndiaMART Knowledge Services we are always partners in growth for SMEs. If you have any queries regarding the freemium model, drop in a comment to this post and our team of experts will get in touch with you.
No comments:
Post a Comment