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Updated by Nick Kellet on Nov 13, 2015
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Nick Kellet Nick Kellet
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5 Steps to Making Freemium Work

Source: http://online.wsj.com/article/SB10000872396390443713704577603782317318996.html?mod=WSJ_SmallBusiness_LEADNewsCollection

1

Limit Free Offerings

Limit Free Offerings

Limit free offerings to avoid cannibalizing your paid customers. Expect your free-to-paid conversion rate to be less than 5%.

2

Promote both free and paid offerings

Promote both free and paid offerings

Promote both free and paid offerings, rather than focus just on acquiring paid users.

3

Create Referral Incentives

Create Referral Incentives

Create an incentive for free users to refer their friends to your service or product.

4

Distinguish between Free And Paid Plans

Distinguish between Free And Paid Plans

Clearly distinguish between free and paid plans, so users can see value in paying for more.

5

Create Natural Progression

Create Natural Progression

Create a natural progression from free-to-paid features, such as the option to buy extra storage space on a cloud service once a user runs out of free space.