In Crisis, What Should be Free(mium)?

  1. to change behavior. If a news organization wants to move print readers to digital, it might make 10 articles a month available for free. If the freemium subscriber keeps bumping up against the paywall, eventually they’ll recognize that they actually use digital news more than they thought, and probably would benefit from a paid unlimited subscription.
  2. because the free members ARE the product. This could be true in a case like LinkedIn which has what is known as a “network effect”. Each new free subscriber makes the paid membership more valuable for the recruiters, job seekers and salespeople who are looking to find the right person. Or it could be an ad supported model, where the business is trying to attract enough of the right kind of “eyeballs”. Or even that archaic marketing strategy of “Ladies Night.” In all these cases, the free benefits are given to seed the bigger opportunities.
  3. because the free subscribers are an acquisition for paying subscribers. Put another way, some freemium models have a viral component in that just by using the product, freemium members are marketing the service to their community. Hotmail was the first “viral” product — I sign up for free mail, and send you an email with the hotmail link, so you sign up. Same thing works for any product where part of the onboarding process is for you to connect with all of your contacts.
  1. to take care of one’s members. My neighborhood yoga studio had to scramble to figure out how to offer remote classes. With no real digital footprint beyond a basic website, the owner worked quickly to figure out how to use videoconferencing to support her community. Drugstore chain CVS is offering delivery of prescriptions so at-risk patients don’t need to come into the stores. These thoughtful extensions of services to existing members at no additional costs make sense because they are guided by maintaining and deepening the long term relationships.
  2. to take care of the community. This goes beyond discretionary philanthropy and is what happens when organizations recognize that their entire community is at risk and that their organization has resources to be a source of relief. This is the philharmonic livestreaming to help people connect to beauty. This is Zoom extending the benefits of freemium to all teachers.
  3. to build brand awareness. The more cynical among us can point out that these public and temporary acts of generosity are not altrustic. And in many cases this is true…or at least altruism isn’t the full reason for the generosity. Even my 83 year old neighbor is using videoconference combined with a second camera (for the blackboard) to continue tutoring. Never have so many people tried videoconferencing — so there may be a little “land grab” behavior to win these newcomers. We are all looking for new habits on everything from how to work from home, to how to get our groceries, and businesses are scrambling to gain trial as well as to gain media attention as “one of the good guys”.

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Robbie K Baxter

Robbie K Baxter

Author of THE FOREVER TRANSACTION & THE MEMBERSHIP ECONOMY; Leading expert on membership models and subscription pricing. http://www.robbiekellmanbaxter.com