The Lure of "Freemiums"

The idea of attracting new customers through the offer of free samples is nothing new - old school products like laundry soap and perfume have done this for decades.

But the Internet lets online service providers to take this approach one step further: offering valuable services at absolutely no charge and making huge profits through adjuncts and add-ons.

Venture capitalists love this approach and have dubbed it "Freemium" which refers to how the basic service is offered free and the money is made on buyers of premium-level services.

Well-known examples are Google (search is free to users, advertisers pay the bills) and Adobe Acrobat (the reader software is free but tools to create Acrobat files are not). Hundreds of other examples include You Tube, MySpace and Blogger.

If you are considering an approach like this for your business you would do well to click on the headline above to read a short article on the topic from Business 2.0 magazine. In it you will find a list of "Nine Tips to Make Your Freemium Service Soar."

My favorite quote form the article is that by not charging people "you remove one of the major obstacles to product adoption." Brilliant!