Definition: Freemium Model is a business model used by online companies in which users get the basic product or service for free and must pay for additional services. In other words, it is a "try before you buy" business model and experience to the users.
Multiple factors contribute to the Freemium strategy's success. The company can attract a user base without spending on marketing campaigns or the traditional sales force model because of the available free services. Freemium models are often more successful than the other limited-term offers because of the cumbersome cancellation processes or users find unlimited free access more appealing.
More on business strategy: 3C's Model of Ohmae, Ansoff Matrix, Business Continuity Planning, Business Model, Business Model Canvas, more...
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