Freemium

How it is used

Common in apps and SaaS. The word combines free and premium. Teams track how many free users convert to paid users; this rate is often low, so freemium works best when serving free users costs very little.

Example sentences

1. We use a freemium model: teams of up to five people use the tool for free.

2. Only 3 percent of our freemium users upgrade, so we're testing a free trial instead.

Common collocations

• freemium model
• free-to-paid conversion
• freemium plan
• upgrade to premium

Related terms

• subscription modelA business model in which customers pay a regular fee, usually monthly or yearly, to keep using a product or service.
• SaaSSoftware as a service: software that customers use online through a browser or app and pay for with a regular subscription instead of buying it once.
• business modelThe way a company creates value for customers and earns money from it: who pays, what they pay for, how much and how often.
• retentionA company's ability to keep its customers or users over time, usually measured as the percentage who are still active or paying after a certain period.

This word in other fields

The same English word can have a different meaning in another field:

• freemium · Mobile App Development

More terms: Ideas & Business Models

• startup
• value proposition
• target market
• pain point
• total addressable market
• competitive advantage
• moat
• marketplace
• B2B
• first-mover advantage
• disrupt