Skip to main content


What is Freemium?

Freemium is a business model that offers basic features of a product or service for free, while charging a premium for supplemental or advanced features. This approach aims to efficiently acquire a large customer base through free offerings and then monetize a portion of that base with premium, value-added services or enhanced versions of the service.

Understanding Freemium Model

Freemium models have been prevalent in the software industry since the 1980s, with the term itself coined in 2006 by venture capitalist Fred Wilson. The model's success depends on efficiently acquiring a large user base and effectively converting a portion of that base to premium customers.

Balancing the value between free and premium features is crucial to encourage upgrades and maintain long-term profitability. Examples of successful freemium products include Spotify, Skype, and Candy Crush Saga.

Freemium vs. Premium: Understanding the Differences

  • Access and Cost: Freemium provides basic or limited features for free, while premium models charge for access from the beginning.
  • User Base: Freemium aims to build a broad user base to eventually convert into paying customers, whereas premium targets those willing to pay upfront.

Key Strategies for Converting Freemium Users to Paying Customers

To convert freemium users to paying customers, businesses should focus on implementing the following strategies:

  • Effective Onboarding: An engaging onboarding process can introduce users to essential features and set the stage for future upgrades.
  • Personalized Experience: Tailoring the user experience with increased storage or customization options can motivate upgrades.
  • In-App Messaging: Utilize strategic messaging within the app to promote premium features.
  • Exclusive Features and Trials: Offer exclusive features and time-limited trials to enhance the functionality and entice users to subscribe to premium.
  • Flexible Pricing: Implement various pricing tiers to accommodate different user needs and budgets.

Case Studies: Successful Freemium Implementations

Several companies have successfully implemented the freemium model, demonstrating its potential for growth and revenue generation. Here are some examples:

  • Spotify: Offers an extensive music library with limitations in the free version, such as ads and restricted skips, encouraging users to subscribe for a premium experience.
  • Skype: Provides free internet calls between computers while charging for calls to landlines or mobile phones.
  • Candy Crush Saga: This game is free to play, but users can purchase extra lives or special features to progress more easily.

Other terms

Oops! Something went wrong while submitting the form.
00 items

80/20 Rule

The 80/20 Rule, also known as the Pareto Principle, asserts that 80% of outcomes result from 20% of all causes for any given event.

Read more

A/B Testing

A/B testing is a method for comparing two versions of a webpage or app to determine which one performs better based on statistical analysis.

Read more

ABM Orchestration

ABM Orchestration involves coordinating sales and marketing activities to target specific high-value accounts effectively.

Read more

AI Sales Script Generator

An AI Sales Script Generator is a tool that utilizes artificial intelligence, specifically natural language processing (NLP) and generation (NLG), to create personalized and persuasive sales scripts for various communication channels, such as video messages, emails, and social media posts.

Read more

AI-Powered Marketing

AI-powered marketing uses artificial intelligence technologies to automate and enhance marketing strategies.

Read more


In a sales, an account refers to a customer or organization that purchases goods or services from a company.

Read more

Account Click Through Rate

Account Click Through Rate (CTR) is a metric that measures the ratio of how often people who see an ad or free product listing end up clicking on it.

Read more

Account Development Representative

An Account Development Representative (ADR) is a specialist who works closely with a company's most important clients to build long-lasting, strategic partnerships.

Read more

Account Executive

An Account Executive is an employee responsible for maintaining ongoing business relationships with clients, primarily found in industries like advertising, public relations, and financial services.

Read more

Account Management

Account management is the daily management of client accounts to ensure they continue to do business with a company, focusing on showing clients the value they can enjoy if they continue to use the company's products or services.

Read more

Account Mapping

Account mapping is a strategic process that involves researching and visually organizing key stakeholders, decision-makers, and influencers within a target customer's organization.

Read more

Account Match Rate

An Account Match Rate is a measure of a vendor's ability to match IPs and other digital signals to accounts, which is essential for account-based sales and marketing.

Read more

Account View Through Rate

Account View Through Rate (AVTR) is a metric that measures the percentage of individuals who watch a video advertisement to the end, providing insights into the ad's effectiveness.

Read more

Account-Based Advertising

Account-Based Advertising (ABA) is a specialized component of Account-Based Marketing (ABM), focusing on targeting and engaging specific high-value accounts with personalized campaigns.

Read more

Account-Based Analytics

Account-Based Analytics is a method and toolset used to measure the quality and success of Account-Based Marketing (ABM) initiatives.

Read more

Account-Based Everything

Account-Based Everything (ABE) is the coordination of personalized marketing, sales development, sales, and customer success efforts to drive engagement with, and conversion of, a targeted set of high-value accounts.

Read more

Account-Based Marketing

Account-Based Marketing (ABM) is a business marketing strategy that concentrates resources on a set of target accounts within a market, employing personalized campaigns designed to engage each account based on their specific attributes and needs.

Read more

Account-Based Marketing Benchmarks

Account-Based Marketing (ABM) benchmarks are essential tools for B2B marketers aiming to achieve exceptional ROI.

Read more

Account-Based Marketing Software

Account-Based Marketing (ABM) software supports the implementation of ABM strategies, facilitating collaboration between marketing and sales teams and providing analytics to measure performance.

Read more

Account-Based Sales

Account-Based Sales (ABS) is a strategic approach in business-to-business (B2B) sales and marketing that focuses on building personalized relationships with specific high-value accounts.

Read more
Clay brand asset shaped as a 3D group of abstract objects made out of purple and pink clayClay brand asset shaped as a 3D group of abstract objects made out of purple and pink clay

Scale your outbound motion in seconds, not months

14 day free Pro trial - No credit card required

Try Clay free