Financial, Legal, Insurance & Management ServicesPricing Strategies - Freemium + Upsell

In the olden days (before the late 90’s) most companies had one monetization strategy (and it probably wasn’t called that) – the one time transaction. They had a product and people bought it. When it wore out, broke, or was improved, etc. Businesses hoped people would buy another one.

Priceisright

Of course there were exceptions, cable television, phone, newspapers , magazines, even milk delivery were some of the pioneers of the subscription strategy. Then cloud computing was born and everything changed. Salesforce.com was the first to move to the cloud in 1999 offering enterprise applications on the web, Amazon started a couple of years later and it wasn’t’ long until all of the big players, joined them and by 2010 most the small players were also looking to take advantage of this new way to do business.  From all of this, very different pricing strategies from the old óne-time transaction were been born’.

One of these is what’s commonly known as Freemium+Upsell. This is where a company offers people a ‘free forever’ service but also offers a paid version that has more features, or removes advertising, etc.

Linkedin is a good one example of this strategy. Anyone can signup for a Linkedin account, it’s free and all you need is an email address. Once you are signed up you can create a profile and start asking people to join your network.  There’s no limit on how long you can keep what LinkedIn calls this basic account.

But if you want to see a full list of people who have viewed your profile, or use the InMail feature, or get better, faster access to job posts, you need the Premium account and it comes with a price tag. 

LinkedIn does a great job of incorporating advertising for their Premium account in the basic or free account. They ‘tease’ you by giving you some of the information, and then showing you how you can get more. 

If you click one of the many teaser ads strategically placed within the free account you are taking to a buy page where you can pay a monthly fee for a premium account.

 

 


 

Author

Steve-adams-fusebillCEO Steve AdamsFusebillCEO

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