If you’re an avid reader, chances are you’ve come across a freemium book before. For those who don’t know, a freemium book is one that’s available for free online but also has premium content that can be unlocked for a fee.
If you’re thinking about writing or reading a freemium book, here are some things to keep in mind.
Freemium Book
A freemium book is a book that can be downloaded for free, but that also has a paid premium version with additional features. The idea is that readers can try out the book for free and then upgrade to the premium version if they like it.
This business model is becoming increasingly popular in the digital age.
What to Consider When Pursuing a Freemium Book Model
A freemium is any item that is given for free or at a discount to a customer. This is usually used to entice them to purchase something.
Companies can use my book as a promotional tool. They can earn significant revenue from doing so.
Can you use your books as a lead magnet for your own business?
Here are some ways to generate additional revenue from a freemium book.
First, the book should have value in itself to recipients. This means that the content should be useful to them.
Secondly, the form of the book should portray value. A high-priced hardcover book will have greater perceived value than a low-priced ebook.
If your competitors are also using their books as freemiums, it’s important to make sure the product differentiation goes on your content and packaging in order to create an expectation of greater value.
Finally, the benefit you receive for giving your book away should exceed its cost.
Because offering free features can be a powerful marketing tactic, the freemium model lets a new business grow its user base without having to spend money on expensive advertising campaigns or hiring a large sales team.
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When it comes to book publishing, there are a lot of factors to consider in order to be successful. Business strategy, ebooks, digital media, printing, sales, marketing & data intel are all important pieces of the puzzle.
Making “Freemium” Work
Free trials have become a go-to strategy for many online businesses.
If you’ve used any of the most popular business-to-business services, like Linkedin, DropBox, and Match, then you know how this type of model functions. It’s also being used by a lot of B2B companies, such as Box, Splunk, and Yammer.
There are several reasons why freemium models can be so effective.
Because offering a free service is a great way to attract users, the freemium model allows you to scale your business without having to spend any money on advertising or hiring salespeople.
The subscription-based revenue model is proving more sustainable than the ad-supported model that dominated the online world a decade ago.
Social media is one of the most powerful drivers of growth: many products offer free trials or discounts to users who refer their friends.
There are 6 questions you should ask before implementing a free-to-premium business model.
1. What Should Be Free?
Let’s say you have a 20-feature product that costs $100. You can choose to offer 5 of those features for free, but the other 15 will cost $50 each.
How do you go about evaluating your decisions? And what do you do if you suspect you’ve made a mistake?
If you’re not getting as many users as you’d like with your free offering, try adding more value to your offer.
If your paid offerings are bringing in a lot of revenue, but your free content is attracting few paying customers, you may need to cut back on your freebies.
2. Do Customers Fully Understand the Offer?
If you want to avoid complicating your marketing efforts, make sure your customers understand the benefits of upgrading. If they don’t see the value in upgrading, you won’t be able to monetize as many of them.
LinkedIn Company provides four different subscription levels, aimed at different user segmentation. Even though it’s successful, the company could likely make more money if it more clearly distinguished between the different tiers of its service.
3. What is Your Target Conversion Rate?
Imagine that you are a CEO of a Freemium startup and you are given a report that shows your conversion percentage (the number of users who upgrade to premium plans) for the previous quarter. What number do you expect to see?
A 1% subscription rate may be too low if you’re only making revenue through subscribers.
It could signal that you’re giving too much away for free, which gives users little incentive to upgrade. Alternately, it might suggest that consumers don’t see the value in your premium features.
While high conversion rates are a good thing, keep in mind that one of the benefits of a freemium model is the ability to attract visitors to your site.
Although a 50% conversion rate may seem successful, it could actually be indicative of a weak freemium product that doesn’t attract many users. A more successful model would generate a smaller percentage of conversions from a larger pool of users.
All other things being equal, you would be better off getting 5% of 2 million visits than 50% of 100,000.
The strategy to aim for is moderate conversion rates (2-5%) while maintaining high traffic volumes.
If you’re selling to a very small niche, you’ll need to be extra careful with your conversion rates.
4. Are You Prepared for the Conversion Life Cycle?
If you’re getting lots of traffic, and your conversions are 5%, you can project growth by assuming your rate will stay the same.
Can you draw a few lines, given that the rate at which the line moves will remain constant?
No, I am not prepared to handle all phases of the customer lifecycle. First-time customers, or early adopters, are less likely to be concerned with pricing, so they’re more likely to buy.
And oftentimes, they are people who find the value in your offering to be particularly enticing.
Freemium companies, which offer free versions of their products, have very low incremental costs for each user. However, those costs aren’t necessarily nonexistent. At the very least, these customers require servers and customer support.
5. Are users becoming evangelists?
While free users don’t necessarily pay, they can still be very valuable in that they can bring on new users, who will also become paying subscribers.
When considering a Freemium strategy, keep in mind that satisfied customers can be one of your best sources of promotion. By providing incentives for them to refer their friends, you can increase the value of your recommendations.
6. Are you committed to ongoing innovation?
Don’t make the mistake of dropping your free app when customers stop using it or when the conversion rate for upgrading to the paid version drops.
It can be harder to convince users to upgrade from a free service to a paid one. To convince more users to convert to a premium plan, you’ll need to continually improve the value that they get from that upgrade. This will require that you make continuous improvements to your offering.
Freemium isn’t just a business model, it’s also a mindset.
Conclusion
As an author, one of the biggest benefits of writing a freemium book is that it allows you to reach a wider audience. By making your book available for free, you’re opening it up to people who might not have otherwise considered reading it. As a reader, freemium books offer an affordable way to sample new authors and genres without breaking the bank.
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