Who does not love free stuff? Everybody LOVES it!
Source: Free Stuff (Kitten)
It is, however, natural human reaction to ask ‘why? what’s the catch? what are you trying to sell me?’ once they hear the word ‘free’ since many of us growing up knowing that there is no such thing as free. From a business perspective, the goal of free is to convert free users into paying customers. It is the objective of every business to make money, after all. Giving away something for free often supplies value on the back end – businesses will make sure that it is going to be worth it. Sure, the upfront costs can be substantial, but it can easily pay off in some monetary value form a little further down the road.
It might be true that there is a ‘catch’ behind the ‘free’.
Let’s look at Course Hero. It is one of the education technology website company which operates an online learning platform for students to access course-specific study resources contributed by a community of students and educators. At first, this website allows users to gain information from its website for free, however, after certain periods, it restricts the users to access its website. It requires users to pay membership fees in order to get to the websites. Since it was free at first, it attracts users to explore the websites and when they love the experience they get from using it, some of these users, would then, might bond with it and would want to continue accessing it. Marketers could also make use of freemium model to get customers’ attention where marketers provide the basic product for free whereas a premium will be charged if customers want to access additional features of it. Free offer might serve as a magnet; it hooks customers and could encourage impulse purchases from users at the end.
Further, sometimes, in exchange of free product or offer, consumers are being asked to provide their data such as email, and gender. For instance, in order to get free Wi-Fi, consumers will be asked to enter their email address and any other details. We, as consumers, might not realize how important that is for the marketers. We thought it was just an email and nothing more, but marketers get our data which worth everything compared to the free Wi-Fi they offer us.
This proves that free things are not actually free!
As a marketer, would you adopt this kind of strategy where you are going to offer free things in order to attract customer’s attention first and take the risks of whether they are going to end up buying your products?
Felicia Boedisoesilo 
Free stuff! thinking about it alone makes me excited!. Course hero has been a great example of the freemium business model. I would adopt this model if I am sure there is a worthwhile benefit I could offer and when the switching costs for the customer is high in that specific industry!
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YES! Some services inherently increase in value or stickiness the longer you use them, making it too “costly” to make a switch.
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Free is one of the best techniques to entice customers I believe! Like you said, who doesnt love free things? But as mentioned, there is always some exchange for something, whether it be data, or enticing customers then charging them to continue. I think this model works so well because almost no one can resist free, while it also gives consumers a taste for products/services without having to fully commit. This essentially gives the brand an opportunity to prove itself, and if its successful, it can reap the rewards.
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Yes, good point there. The idea behind it is to give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base. The idea is that once customers fall in love with the free version, they’ll purchase a subscription for the more robust version and spread the word about it to others
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Like you said, who does not like free stuff! I would adopt this method if I am a marketer and looking from customer’s point of view, they would be hesitant to purchase something that they have not tried before. It is also crucial to ensure that customers get the best experience from using the product freely as this would attract them to purchase it for long term use. Therefore, giving users free trial is beneficial for both the customers and businesses.
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Couldn’t agree with you more! For a service that’s new to the market, offering a freemium version can be a quick way to drive trial because of the low barrier to entry. It also makes a product more shareable to build word of mouth. In fact, if the right business conditions are met, a freemium model can help drive faster recurring revenue and profit growth than a paid-only model.
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