Thanks to the internet, the opportunity for companies to market and offer products and services has changed drastically. Today there is a wide range of free products and services being offered, where the customer decides whether he or she are willing to pay for a more extended version.
This is called Freemium.
According to Wikipedia’s definition, Freemium is a pricing strategy by which a product or service is provided free of charge, but money (premium) is charged for proprietary features, functionality, or virtual goods. The word freemium is a portmanteau neologism combining the two aspects of the business model: free and premium. Examples of companies that implement this pricing strategy are Google, Spotify and Dropbox.
The term was first coined in March 2006 by venture capitalist Fred Wilson, who in a blog post describing the model, asked his readers to suggest a suitable name.
Dare to be free
Back in April 2014, we at the TimeApp launched a new pricing strategy, with all our features offered at no cost to the first user. It is something we called All Free – All Included. This includes all the system functions, from time tracking, billing and mileage log to an internal social forum in real time; TimeBook, as well as our new receipt functions; all with no additional costs or surcharges.
“It’s a way for us to support all small and sole proprietors with a free system that keeps track of their time, travel, expenses and disbursements. And while being able to take payment from customers who want to use TimeApp on a larger scale, says Martin Eriksson, Vice President and Sales Manager at P&K Utvecklingskonsult AB, which develops and markets TimeApp.
On the Swedish market TimeApp has been around for about four years now and we have included a partnership with several banks. However, a big interest for the freemium model helped the company to expand to the international market.
“We notice a significant interest in the model All Free – All Included, both the Swedish and international markets, where we now have customers from Malaysia and Australia to countries in both Europe and Southeast Asia, explains Martin.
Recently, the business software provider Sage conducted a study which shows that European companies annually wasting nearly 65 billion on unused ERP. Something that indicates a need for a cost-effective, streamlined and simple system, perhaps with the Freemium model as an entry point.