As a result, B2B companies often implement a freemium model that previews a product or service's value but leaves enough to be desired that users are incentivized to upgrade for additional features. Zapier (B2B)ī2B products solve complicated business issues for organizations, and they’re usually feature-rich with a steep price tag. Now that you know what freemium is and how it works let's look at a few examples of how the freemium model is used in B2B and B2C companies.

Let’s go over the pros and cons of the freemium model. Freemium Advantages and DisadvantagesĪ freemium model helps lower CAC and the amount you spend on marketing, but it also has drawbacks. If you have a deep understanding of your customer’s needs and the value you provide them, you’ll be able to find a clear balance.

The limitations that you use for your product or service should leave users wanting more, but not so much that they don’t see the core value of your product. Limited support: Tiered access to customer service and support resources for each tier. Usage quotas: Storage limits for free plans, monthly credits, and data processing quotas, showing the user what they can do with the product but leaving them wanting more. Successfully implementing a freemium acquisition model requires limitations on certain aspects of your product to differentiate between free and paid plans:įeature limitations: Offering extra features, enhanced functionality of features, or ad hoc paid upgrades (e.g.

Since they’ve previewed your product, they already know the value you provide and aren’t taking a risk on a product they haven’t used. The freemium model creates a natural lead nurturing process that offers users the opportunity to discover your product and its capabilities on their own.Īfter achieving success with your product, free tiered users can reach the limits of the free-level account and decide to invest in a premium account to gain access to the full set of features.

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