7.15.2013

The Freemium Model

Many business have done it, they start with a free product and add on paid features. Examples include Facebook, Twitter and Google just to name a few. This strategy has popularly become known as the "freemium" model. It has achieved considerable success outside of Africa, but can this model succeed on our continent?

In theory, yes. Who doesn't like the word free? In Africa in particular though, there are a number of challenges that may make the model more difficult to implement:

1. Trust- Generally speaking when things seem to good to be true, they really are. So unless you're able to tell a strong story and explain why you're offering your product for free people, will tend to regard it with great suspicion or think that you're just not serious.

2. Quality- Often the money you pay for something dictates the level of quality, therefore it is important to be able to communicate to users the quality of your product despite the fact that it's free.

3. Value- We often value things based on how much we've invested in them, i.e. in terms of time, emotional involvement and money. Of the three, when it comes to products and services, money tends to be the primary means by which we assign value. Therefore when using the freemium model, it's important to consider how best you'll communicate this value.

Have you had any experience offering a free product? Share your thoughts!


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