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How to Use the Freemium Model

By Shawn McGuire, 11 years ago

What is the freemium model? Well, freemium is a monetization plan in which a product is offered for free but provides opportunities to make purchases related to the product. The most common form of this is with games (particularly mobile apps) that have in-game purchases. So what about the freemium model warrants an entire article? I'm going to give you some tips on how not to get burned by the freemium model. You can sink serious money into these products and it's important to understand how it works before you get sucked in. Here are a few tips to keep in mind while using a freemium product.

Do you NEED to make a purchase to use the product properly?

Most of my experience with this model is in games so I'm going to use games for my examples. There is a game called My Country for Android that I had the unfortunate job of reviewing in another life. It is actually a really fun game and is free. The developers make their money off of in-game micro-transactions. The problem is that, at a certain point, you cannot advance the game without making purchases. Technically you can, but it would take weeks of playing just to get one item you need. If the product you are using requires, or effectively requires, you to make a purchase in order to advance or have fun, ditch it.

Is it starting a Cycle?

This is probably the most important thing to keep in mind I've been playing a game called Plague Inc. (awesome game) as of late. It is set up in a way such that any purchase you make, unlocks the full game. Essentially what they have done is given you a game for free and said "IF you like it, pay us a dollar to get more or it." A game like My Country wouldn't be too bad if they asked for $1 to unlock some mechanism that would allow you to get the needed items easily. Instead you buy an item then another and another and another. There is effectively no end to the game.

Be careful who you buy from

There are companies out there that are notorious for making amazing games that effectively require you to make purchases. Glu Mobile is great at this. I should pause here and mention that this is not a bad thing. I have a huge amount of respect for Glu and the people there. From a money saving perspective, they are a nightmare. They make high quality, very addictive games and make money from in-game purchases. Sure, you never HAVE to make a purchase to advance but you either need to play the game flawlessly or endlessly to progress. Glu, whose tag line is "The Leader in 3D Freemium Mobile Gaming", is not the only company who does this. If you start playing a game from a company who does this, make a note. This way you can avoid these games in the future.

I know I only used examples of mobile games but the freemium model is everywhere as of late. There is actually a book called "FREE: The Future of a Radical Price" that is available on Amazon.ca and talks about the freemium model. As it turns out, the book FREE is available for FREE at Audible.com. Even more interesting is that you can only get your FREE copy of FREE if you sign up for a FREE 30-day trial @ Audible.com.

What freemium stuff have you run in to? Are you ok with freemium or does it turn you off of a product? Let me know below.

Comments

Tiggrr
I find this is very true with zynga. Love the games and am hooked on Hidden Chronicles ( no can do that farming thing that everyone on FB is addicted to) but boy do they hook you with wanting to buy stuff either to a) advance quicker in the game or b) buy something that is only available for purchase but would be really great to have
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Lauren
Some companies do it really well, either because they've learned from experience or have followed someone else's lead. I'm OBSESSED with a game called Triple Town on FB. I didn't used to play it much because you only had a certain number of moves before you had to wait for it to recharge. You could buy more moves, but they didn't last long. Recently I decided to play it again and discovered they have an item you can buy to make you have unlimited moves. One purchase and you can play indefinitely - and now I spend most of my free time on that game. They still have lots of premium items to help out in the game or just decorate your space, but if most of their customers were like me they weren't sticking around with their old model, it was too frustrating (and expensive) to constantly pay for more moves. Now they have a group that plays non-stop, and I think those are the people who are more likely to buy the premium items - they have their attention, and they're going to want more. There are lots of other services following this model, too. For example, I use an app called cramberry to study. It lets you make flashcard sets to study on your iphone, but you can only make a certain number of sets and study a certain number of cards a day if you don't subscribe. I have another app (I can't think of what it's called atm) that lets you create tasks and prioritize them based on date and urgency. I use it to keep up on my projects for college. It's free, but if you subscribe you can create sub-tasks, which is awesome. With the free one, I can say "this is due this day" but with the subscription I can say "finish the research by this day, write a draft by that day, do some proof reading this day and hand it in that day" Personally, since this model has become so popular, I don't often subscribe to anything that doesn't have a free version. I like having a look, even if it's a limited one, at what a service has to offer before I pay.
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Anna W.
I am not a fan of the freemium stuff, but I have purchased a couple of times - really to sort of reward the company for making a fantastic game that I've put a lot of time into. :)
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Avigayil M.
I was ding it with The Smurfs game.. I wanted all the cute little huts!! I only did it once really... purchased the smurfberries.. but freemium really pisses me off. I would rather pay a one time fee to unlock everything than keep on paying.
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