Freemium Economy

TV Interview Q & A session draft footage 'Freemium Economy'
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by | Oct 4, 2018 | Video

I think we live in a Freemium economy, particularly online.  What I mean by that is everybody expects most things to be free, which is sort of counter intuitive to business, but actually a lot of online businesses deliver their base level on service or product tends to be a free one and then they find ways of making money.  You only have to look at social media, apps and businesses, whether it is Facebook, whether it’s Whats App, whether it’s Snapchat or Instagram – they’re all free.  Yet they find a way to make billions and billions of pounds on a monthly basis and I think as more and more people get used to that then businesses have to find a way of creating their first service level to be a free one. 

Not all businesses can be corporated, but it is looking at understanding how they start that relationship with somebody and particularly because people aren’t finding businesses a lot sooner than businesses really are ready for them, if that makes sense.  You go back 10 or 15 years, and somebody would contact a business and pretty much they are ready to buy, or they have a good understanding of the product and actually it’s more about matching price against value. Nowadays you can come up with the fact that you might decide you want to lose weight and its 3 o’clock in the morning.  You’re sat there eating doughnuts watching Jeremy Kyle and all of a sudden you come to the understanding that you need to lose weight, so you will start that journey at an odd time, not only in terms of the middle of the night, but an odd time in terms of how businesses are used to working with people.  You probably have no idea what that means, you have no idea how you want to do it, you have no idea how or who offers that type of service, but it doesn’t stop you searching, it doesn’t stop you Googling, it doesn’t stop you going onto Facebook or it doesn’t stop you talking to people across the social platforms.  They are no where near ready to buy so what has to happen is businesses need to be able to engage with these people at that point in the buying process.  The only way really to engage is to do it without any fear of loss or any fear of commitment and that needs to something for free. 

We do a lot of work in the fitness industry and we get some really amazing results for our clients but we drag them all back to this earlier stage in the buying process to provide free video’s, free downloads, free guest passes and free classes, and that allows them to engage with people in the Freemium economy much earlier and then they can build trust and confidence which ultimately will drive the sale and fill in that gap between the original awareness of “I need to lose weight” and the final outcome which is “here’s my money and I’d like to join your gym”.  That’s one industry, but I think every industry has to adapt in some way.