Freemium Marketing: What Gives?

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Here’s a unique question for your business: what are you giving away? On last week’s LAB one of the topics we covered was the idea of offering something free — the idea of “Freemium” that has been floating around the blogosphere for a while. Freemium is the idea where a company provides something at no cost to serve a greater goal when they opt to pay for something bigger.

Before you click away thinking this sounds too charitable and the concept does not support a revenue-based business model, first consider Dropbox, Skype, Twitter, the ubiquitous Facebook, and Mailchimp. Also, Fast Company just wrote an article about Evernote’s success with freemium.


The basic idea is to capitalize on goodwill, offer something that drives a lot of traffic, and only charge for things that are hard to do. By offering something of value for free you are providing incentive for potential clients to engage while also ensuring a level of obligation and gratitude. Now you have a relationship.

The strategy of giving

This is explained in greater detail at the Strategy of Giving website (where they offer a free ebook on the topic) and the idea can get quite warm and fuzzy. To sum it up, the idea of karma, reap what you sow, law of nature, etc. is nothing new and is found throughout cultures — it is the idea of offering a reward for behaviors that are beneficial. While this might seem counter-intuitive to your company’s bottom line, it is quickly becoming a popular business model.

The whole concept of giving is a means to an end, so you must have a clear goal in mind before you begin. Combine your vision with what your customer needs. The broad concept is obviously more applicable to certain startup companies such as software companies who are looking to quickly scale their business to tens of thousands of customers and can create an enticing offer for little cost. How, then, to relate this to a small law firm?

What NOT to give

Keeping in mind that you (obviously) need to make money, first consider your end goal. Are you hoping to drive traffic to your website, increase signups on your newsletter, increase requests for a certain type of service, or something else?

The best way to think about the concept is in terms of it being part of your marketing mix. Your free item is a way to distinguish yourself and open communication between you and potential clients while cutting through generic marketing messages, and generally increase traffic and revenue. As mentioned in the SOG ebook:

Customers do not find the traditional advertising useful in the same way as previous generations did. This means that companies have a harder time offering customers real differentiated benefits, which is also why abstract features, such as brands and brand images, are now sold as benefits. Marketing has become a competition over who is the loudest.

Unfortunately, none of the individual voices stand out from the noise, and customers are tuning out to escape the cacophony. It seems like marketing has forgotten its most relevant question: what does marketing give to the customer?

A few examples

A simple example of this concept is an informational blog. I regularly advise clients who develop blogs to ensure that their articles and posts are not advertorials. For a blog to work within the giving concept, you must provide valuable information without expectation of a direct response. Clearly you will have indirect responses where your readers view and understand your expertise, appreciate the information, and view you as a curator within your niche.

The example mentioned in the LAB was Sam Glover’s free consumer resources that he offers on his website. For the cost of an email address that goes directly into Sam’s newsletter database, potential clients have access to a few great resources that are specific to their needs.

Keep these things in mind

First, your gift has to be valuable and high-quality. In other words, consider what your customers really need, not what you want to give away. And last, giving is always a selfish act. Giving is always beneficial to the giver, and each party is aware of this so it is important for you to be open about your motivations but also be willing to receive something abstract. Many times the benefits to the giver will not have a specific monetary value like opinions, ideas or social interactions.

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