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The Effect of Free Sampling Strategies on Premium Conversion Rates

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  • Koch, Oliver Francis
  • Benlian, Alexander

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

  • Koch, Oliver Francis & Benlian, Alexander, 2017. "The Effect of Free Sampling Strategies on Premium Conversion Rates," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 85457, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:85457
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/85457/
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    Cited by:

    1. Imam Salehudin & Frank Alpert, 2024. "Perceived aggressive monetization: why some mobile gamers won’t spend any money on in-app purchases," Electronic Commerce Research, Springer, vol. 24(3), pages 1997-2019, September.
    2. Rainer Alt & Carsta Militzer-Horstmann, 2017. "Electronic Markets on the media industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(1), pages 1-5, February.
    3. Lehner, Roland, 2023. "Cross-Supply Chain Collaboration Platform for Pallet Management," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 138753, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    4. Wallbach, Sören, 2020. "Assimilation and Diffusion of Multi-Sided Platforms in Dynamic B2B Networks: Inhibiting Factors and Their Consequences," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 123277, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. 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.
    6. Martin Adam & Konstantin Roethke & Alexander Benlian, 2022. "Gamblified digital product offerings: an experimental study of loot box menu designs," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 971-986, June.
    7. Falko Lucht, 2019. "The Success of the Freemium Business Model. How Riot Games flourishes with a free to play game," Manager Journal, Faculty of Business and Administration, University of Bucharest, vol. 29(1), pages 114-124, December.

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