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The effect of free sampling strategies on freemium conversion rates

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  • Oliver Francis Koch

    (Darmstadt University of Technology)

  • Alexander Benlian

    (Darmstadt University of Technology)

Abstract

Freemium business models, where companies offer a free basic and a value-enhanced paid version of a product, have become ubiquitous across software, games and a broad range of web services. Despite the many benefits of freemium, most firms suffer from too few premium subscribers (3–5 %), which challenges their profitability. Although free trials have helped improve premium conversions, research hitherto has paid little attention towards what works effectively. Therefore, we examine the effect of two common free trial strategies on consumers’ conversion likelihood: Freefirst, where consumers start in the free and then opt into a trial of the premium version and Premiumfirst, where things are experienced in reverse order. Based on a contest-based online experiment with 225 subjects, our analysis reveals that in contrast to Freefirst, Premiumfirst significantly increases conversion propensity and that this positive effect is greater when the premium and the free version are more similar.

Suggested Citation

  • Oliver Francis Koch & Alexander Benlian, 2017. "The effect of free sampling strategies on freemium conversion rates," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(1), pages 67-76, February.
    • Handle: RePEc:spr:elmark:v:27:y:2017:i:1:d:10.1007_s12525-016-0236-z
    DOI: 10.1007/s12525-016-0236-z
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    12. Philipp Brüggemann & Nina Lehmann-Zschunke, 2023. "How to reduce termination on freemium platforms—literature review and empirical analysis," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(4), pages 707-721, December.
    13. Biraglia, Alessandro & Bowen, Karen T. & Gerrath, Maximilian H.E.E. & Musarra, Giuseppe, 2022. "How need for closure and deal proneness shape consumers’ freemium versus premium price choices," Journal of Business Research, Elsevier, vol. 143(C), pages 157-170.
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