
I am a big fan of the freemium business model. If for no other reason, I like trying out new apps without having to take the risk of spending money on something I discover I don’t like or don’t need. I’ve even discussed this approach briefly in two previous posts: A Look at Dropbox’s Business Model and Monetizing Your App (Or How to Make Money Off Your App).
Both of the above articles, in addition to representing literary brilliance, discuss successful strategies that companies employ to first get you hooked on their app, and second, and perhaps the most important to developers, get you to spend money on their app. Basically, the two approaches discussed in these articles look at giving away a limited version of your product in order to get the customer to later spend money on the “premium” or full-featured release.
More after the JUMP…
One of the people I follow on twitter recently posted a link to an article discussing the freemium business model, titled Give Away the Diagnostic, Sell the Remedy. In his article, Nathan Kaiser discusses a fresh perspective on the freemium model. That is, what exactly should you be giving away in order to secure future sales? His answer: give away the diagnostic to a problem. The more I think about this approach, the more I’m digging it, with two shovels!
Granted, this approach is easier said than done. In order to give away a useful diagnostic, you need to identify a real problem. Not just any problem, though, you need a problem that has your target market aching for a solution. In his article, Mr. Kaiser gives the apt example of anti-viral software: you get a free virus scan, discover your computer is infected, and are now in need of an inoculation. The solution? Pay for their software and kill those buggers.
Many of today’s most successful mobile apps take the same approach, though maybe not as through such apparent fear mongering. The logic I see goes something like this:
- The problem – an insatiable need to fill every second of downtown with entertainment. DrawSomething, Angry Birds, and Plumber’s Crack are all representative apps that help solve this problem.
- The diagnostic – download a free version of the app and discover how much fun you’ve been missing out on. Granted, the free version will be an ad-supported app (watching ads are not the kind of fun you’re looking for), or it will come with limited features. For example, DrawSomething only gives you a couple colors to start out with and only a handful of bombs to help you guess poorly drawn pictures.
- The solution – more cowbell. The free version helped subside your itch. It’s great, but you need more. My pictures would look so much better with green!!! In comes the premium (paid) solution.
So, when you’re panning out your app, think about how you can give the customers a taste that makes them thirsty for more.