1) Freemium
Freemium is a business model where you give away your product for free but charge for premium features. For example, you may offer a free version of your software with basic features but charge for advanced features.
Many startups use this model because it’s seen as a great way to build a large user base and, while there’s no doubt that Freemium can be effective, there are potential drawbacks to be considered.
Let’s start with the positives.
- An incentive for people to try your product
- If the lite version is accepted, there’s a good chance people will pay for the premium features. They can then reinvest this revenue back into the business.
- Builds a customer base
The negatives are:
- Freemium devalues your product because if people get features for free, they may not see the value in paying for the premium version.
- Some customers will take advantage of your generosity and use your product for free forever without ever paying for premium features.
- Another drawback is that free users can be a drain on your resources. They may use up valuable customer support time or take advantage of features that are meant for paying customers.
- Difficult to convert free users to paying customers. Think of all the time, money, research, experience, knowledge, and effort that went into developing a product only to convert a small percentage into paying customers.
[Unless you’re a streaming company like Netflix which had a whopping 93% free-to-paid conversion rate from free to paid. This article looks at which streaming company had the most success with free trials.]
Finally, free doesn’t pay the mortgage, salaries, research and development, office rent, overheads, coffee, and so on. So, if your goal is to build a sustainable business, you’ll need to generate revenue.
2) Try and Buy
This offers a free version trial intending to turn into a buy after the customer has seen just how good the product is. For example, if you are a lawyer at a business meeting giving free, helpful advice, this tells the other party they know what you’re talking about and warms them to the idea of what they can expect for a fee.
3) Lifetime Offer
If you haven’t discovered AppSumo yet, take a quick browse now. AppSumo has all the tools their platform of 1.25 million entrepreneurs requires to grow and scale their business. Here you can find software, courses, eBooks, PDFs, and lots more.
A unique feature is the offering of software at lifetime rates. Pay once, get it for life. You get all the updates just like any other paying customer. Sometimes lifetime offers are for limited periods only but are well worth checking out.
4) Lead Magnet
Sometimes a free, standalone product is given away to collect customer data for full-priced products and to access this larger customer base for upselling, cross-selling, and marketing communications.
A lead magnet is a free item offered in exchange for an email address to generate leads for marketing. The free item could be anything from an eBook to a white paper to a webinar or even just a coupon code - anything the target customer would find valuable to exchange their email address for.
Once you have their email address, you can then market other products and services to them or use the information to create lookalike audiences for paid advertising.
With a small amount of investment to pay for the content creation, formatting, design, and production (it’s a PDF but it’s better to have something looking good than not), you can generate leads at a low cost-per-lead.
[While we’re here, allow us to plug our lead magnet; a universal guide to PR terminology. The strategy here is to promote the eBook across all our social channels, promote Eight Public Relations, leverage keywords for search engine optimization and encourage website visits with the hope this will generate business.
Rather than a tool to reward people to leave their email in return for our eBook, we’re using the lead magnet as a means for self-promotion. However, we hope the eBook provides valuable information to anyone interested in PR.
5) Public Relations
Another way to generate leads and gain market recognition is through public relations. This could be as writing and distributing press releases or getting media coverage.
While this may not be ‘free’ in the purest sense, it is a cost-effective way to generate leads and get your name out there without breaking the bank on paid advertising.
You can also use public relations to position yourself as an expert or leader in your industry by writing articles or blog posts, giving presentations or interviews, and more.
We hope you found these tips interesting. Should you be looking for creating an eBook or a chat about public relations, do contact us at eight@eightpr.com
We are a PR consultancy based in Hong Kong. We help technology and legal clients enhance their profile and become more visible in the media and on the web through media relations, branded content, corporate reputation, thought leadership programmes, and digital communications.
If you’re looking for or want to discuss your public relations in Hong Kong / Asia Pacific, please contact eight@eightpr.com