How Conversion Optimization Testing Makes “Eventually” Happen Much Sooner in the Freemium Business Model

2 min. read | Last updated: March 12th, 2015

Does your business model call for “FREE” as a first step?  And then what?  How do you maximize Conversions-to-Paid?

The “Freemium” model is a fixture of the Web 2.0 and open source companies. According to the New York Times, Freemium is one of the most popular business models among Web start-ups. As a business model, Freemium works by offering a basic product or service such as software or web services free of charge and then charging a premium for advanced features and functionality.

It all sounds pretty reasonable as the Freemium model gives users time to decide whether or not they want to upgrade. Eventually.

Plenty of companies like the idea of a Freemium model: with a free product they expect lots of users really fast and, at the same time, they tell themselves they have a business model and can eventually make money.

But here is the challenge: Motivating users to upgrade from Free to Paid.  “Eventually”

Most companies in the Freemium space struggle because that “eventual” moment just doesn’t arrive (for a comprehensive list of Freemium winners and losers, click here).

So here is how winners in the Freemium space succeed: the Zoomerang’s conversion optimization testing experience

I bet most of you are familiar with Zoomerang. Introduced by MarketTools in 1999, Zoomerang is the world’s first web-based survey tool. Their Surveys and Polls are fast, easy-to-use and powerful. Millions of individuals and thousands of businesses, non-profits and educational institutions trust Zoomerang to help them make more informed decisions with minimal cost and effort.

Zoomerang offers the basic service free of charge, and charges a fee for advanced features and functionality.

Laura Moon, Zoomerang’s Director of Marketing & Product Strategy, needed to increase the overall customer lifetime value with more paid subscriptions upfront while keeping the overall volume of signups high and she hired us to help them.

But Zoomerang engaged us with very strict marching orders. “Zoomerang is based on a Freemium model but we wanted to increase not just free signups but also overall revenues. The big challenge was to get more paid subscriptions upfront without hurting free account signups” was what Laura told us up front.

And so we embarked on a Conversion Optimization testing strategy and immediately – on the first Test Round! – were able to generate:

  • 23% more overall signups
  • 81% more paid subscriptions
  • 58% more revenue

Amazing results (if I may say so myself). In Laura’s words: “I was skeptical the ROI of hiring an agency would pay out but I have to say that the WiderFunnel strategy is solid and so far they’ve been very thorough and have delivered great results!”

Learn more about Zoomerang’s outstanding results in our upcoming conversion optimization testing webinar June 9

On June 9, you can hear Laura Moon, along with Chris Goward present the detailed case study. Register now here

If your business model is based on offering a Free version of your product and then trusting free users convert to paid but you aren’t meeting revenue targets – you cannot miss this webinar:

  1. Learn how Zoomerang differentiated its product editions to show the value of PAID vs. FREE subscriptions without depressing overall signups
  2. Get your Conversion Optimization ROI Impact Calculator for FREEMIUM business models to show impact on your FREE  and PAID conversions
  3. Test your own skills guessing the winner in multiple case studies

Register now here: https://www2.gotomeeting.com/register/355858594

Author

Chris Goward

Founder & CEO

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