Unleashing Freemium: How Usage Limits Shape Market Dominance and Profits
The article explores different strategies for offering free limited usage of a product, known as freemium, to attract customers. Researchers found that the best approach depends on the proportion of customers who highly value the product. A more aggressive freemium strategy may not always be the most effective, especially if users are not happy with limited usage. Selectively targeting heavy users can sometimes be more successful. The study also suggests that companies should expect a lower conversion rate when using an aggressive freemium strategy.