New study on freemium marketing strategies demonstrates their limits for creating revenue

Freemium strategies dominate software product markets, with many if not most applications enticing new users with a free version, then requiring payment for more advanced features. The strategy thrives at attracting users, but there’s very little empirical evidence showing how it impacts a company’s bottom line. New research published in the Strategic Management Journal in November changes that, with data that suggests this oft-used tactic has its limits for generating revenue, especially for companies trailing in their market category.

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