Freemium and Free Trial models

Can You Give Away Your Content and Still Make Money?

That’s a question that many business owners grapple with everyday. Giving away your knowledge or products and services and then starting to charge is called the “Free Trial” strategy.

The “Freemium” model is a strategy of continuing to give away your stuff while charging for upgrades or new products and services. Then there is simply the “pay for what you get” model.

Making Your Customers Mad

The problem is that consumers have gotten used to getting things for free because there is so much available on the web and social media. What might happen if you decided to start charging for what you’re now giving away for free?

The dangers of trying to switch from the Free Trial to a Freemium model backfired big time for Australian Instagram superstar Essena O’Neill. Her 500,000 followers got to see her modeling clothes and other products for which she was paid a small sum by advertisers.

She set up her own shoots – including the props and doing the photography. At 19, she abruptly quit, losing her sponsors. She called it all a fake and denounced our growing addiction to social media.

She was trashed by most of the press, who accused her of using the very social media she denounced to ask her followers to send her donations for her new venture, a website called Let’s Be Game Changers, where she offers her advice and also content she accesses from the web.

However, I tend to agree with Arthur Chu, who wrote in the Daily Beast,

People are accusing O’Neill of hypocrisy for asking for donations from her fans after turning her back on her Instagram career. But the real hypocrisy is from the people who were happy to consume her photos “for free,” remaining blissfully, willfully ignorant of the money they must have known was changing hands behind the scenes, but who are now offended because she’s making explicit that her online presence is a job she does for money.

Can You Make Money?

It concerns me that many bloggers, who are also business owners, are finding it futile to make money online. A lot of work goes into writing great content, developing recipes, doing photo shoots, researching topics and then providing invaluable advice that consumers can act upon.

Some write e-books that languish on Amazon or sell for a pittance.

Why shouldn’t we get paid if we’re offering valuable information and services? How did we get into this mess, where we give away our services and our followers are keeping our profits?

Think about it. The money they don’t pay for the things we give them for free stays in their wallets. That’s hard cash that we expended and they pocketed because we didn’t charge them.

It isn’t a fair exchange. If you go to the local garage to get your car repaired, you have to  pay. I can’t imagine the mechanic saying, “That’s OK, it’s free and always will be.”

How long can you keep offering Free Trials? Is the Freemium model the way to go? Below is a slide presentation I uncovered in my research that describes the Freemium model.

Leave a comment below if you’ve figured this out!

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Comments

  1. VERY interesting post, Jeannette – poses an interesting question. I didn’t see the slideshow (sorry! at least I am honest about it 🙂 But I did read every word in your post, and I kept on thinking – she is right, it isn’t “fair” (for the lack of a better word) for all of us who work our butts off to provide free content and often not get as little as a thank-you note.

    But then, I also started thinking – ok, so much free information on the internet. And so what? People who hire me to advise them can still get loads of advice, for free, online – but they are not paying me for that information. They are paying me for what to do with that information.

    It’s one thing to know what has to be done, it’s a totally different story to actually do it and how to do it to achieve the results you want. I believe that is why the freemium model will continue to work in many business niches, especially consultancy. You get a taste for free – if you want the full deal, pay for my service and you shall reap the benefits.

    Thinking out loud here… What do you think?
    ~Diana

    • Diana — You make a good point that while your readers may be getting free information, they may not have the skills to use it to their benefit. I think it’s important, though, to let them know in advance that they only get so much for free and,if they find your information valuable, they have to start paying for it.

  2. Thanks for posting this one Jeannette. I saw a portion of that video of O’Neil. Totally agree about what Chu criticized. But alas, it is true: free long term is also so unappreciated by those who take advantage of it.

    I’m going to check out the Freemium website – who knew?

    BTW – you asked, Can You Give Away Your Content and Still Make Money? Well even though says that giving away a chapter to sell a book is not a “freemium” I can say, it works. For now. Until the phrase free becomes the mass cry of – give me MORE for free. Sigh.

  3. Great point! We do spend lots of time doing blog posts. We should get money for our work if not from consumers from advertisers. I never expected blogging to be a get rich quick plan. But, at a certain point, I too am contemplating how to generate passive income so I can enjoy blogging even more.

    • Sabrina — It’s a conundrum, no doubt. Some sites make money on affiliate advertising, but you need a huge amount of traffic to see a profitable return.

  4. When you give anything for free, people not only expect it but you lose the value. I see many sites offer free shipping, the problem is that you really paying for the shipping within the item. I didn’t do that and I offered free shipping and it ate into my profits that I made a decision I would never offer anything free. There is something to be said, you get what you pay for. I feel what you sell has to fit a need. Just selling e-books in hope they sell is never going to cut it today. However, there are so many opportunities out there that you do not have to give away the store. If we all had the mentality that everyone has a right to make a profit, then you would not have the problems we have today.

    • Arleen — that’s the problem. People who expect everything for free could care less if you have to make a profit. You’re right about free shipping. It’s an illusion because it’s built into the cost of the product. I know that. But I’m still seduced by the offer.

  5. Seems to me you can give away some stuff, sort of as an advertisement, then sell other stuff for money? I see lots of companies in tech doing that. It’s when you are not clear or dishonest – like you give away a plugin then suddenly charge (I’ve had this happen to me) that you will instead lose customers.

    • Leora — agree that if at some point you plan to charge for what was once free you should advise your customers that’s the plan from the outset. There is a certain sense of betrayal when all of a sudden what was free suddenly has a price tag.

  6. Hi Jeannette,
    Well, as usual, you’ve raised a question that has really got me thinking. I’m one of those bloggers who is guilty of giving “things” away for free. In my case, I share my knowledge. I’ve written more than one in-depth tutorial explaining how to do something.

    I geared those posts to do-it-yourself bloggers. So, while my bread and butter comes from working with clients, I give a lot away for free. It is a challenge. Why pay me if I’m willing to teach you how to do it yourself for free? The thing is that while I was giving info away, I built a decent reputation as someone who is a resource (for blogging, WordPress and SEO). It’s that reputation that brought me my clients. (The majority of my business has been referrals.)

    Am I making as much money as I had hoped? No. Am I continuing to give away information? Yes and no. The longer I blog, the fewer tutorials I write. I still impart knowledge but I’m moving away from writing how-to articles and blogging more to get you thinking (which is what you’re doing here).

    What’s my plan to make more money in the future? I’m still maintaining my online presence and establishing myself as a resource but I am spending less time blogging and more time building relationships. I’m also considering publishing eBooks. Hopefully, the relationships that I’ve built and my reputation that would help me sell them.

    I also haven’t totally ruled out building niche sites (for myself) and selling affiliate products and services. After all, I’ve developed skills that I’m using to help others with their businesses why not do it for myself? The truth is I haven’t figured it out yet but I haven’t given up either.

    • Sherryl — thanks for your thoughtful reply. I know how much work you put into your excellent “how to” posts and I appreciated them. I’ve gotten away from “how to” posts by and large because there are so many other experts doing it, like Social Media Examiner. Unless I write about my own personal experience with a new product or service, what can I write that hasn’t been written before? You’re quite right, I am writing more about more macro issues — like how to make money online! Like you, almost all my business comes from referrals. But my blog is still important, and I think blogging is still essential to a business, because my blog it gives me credibility and is also an archive of my writing.

  7. I think when you start charging, you have to offer something more than what people are used to getting for free. Or at least give the customer the illusion that they are getting something special for their money. Like making a premium option where you get a lot of extras you don’t get in the free version. If people find your free information useful, they may pay to get extras but you have to really let them know what the advantage in paying would be.

    • Erica — completely agree. You have to be able to help the customer understand that the “new and improved” model is just that. They will be paying but getting more for their money.

  8. What a great thought-provoker, Jeannette. As a blogger who currently isn’t trying to sell anything (the novels are seeking an agent), I often ponder how to make that transition. I have a couple of stories and non-fictions that will make e-books and need to figure out how to get the audience to them without giving them away.

    It is a conundrum and I look forward to following the dialogue on this post to get ideas.

    • Rose — It is a challenge to make money with an ebook. From what I’ve read on Jeri Walker’s blog in her interviews with ebook authors, you have to promote the heck out of them. You might want to pop over to jeriwb.com to read some of those interviews.

  9. Yes, you can give away your content and still make money. We are moving into a new era where user innovation takes over from patents and copyright. A great example is how code for developing software is shared on platforms and developed into codes that anyone can use free of charge. Patents often stop new innovations because a version of something, say, Microsoft has developed stops other developers from improving that invention. So we are moving away from being protective to being open and sharing which will be how work is done in the future.

    • Catarina — The open source model actually was the cause of Microsoft’s decline in the software market because the company treated developers so badly. It’s wonderful that we’re being open and sharing, but only a select few benefit from the fruits of that labor. How can you make a living with that model?

  10. Jeannette, you’re right about the web offering all these freebies – I know I’m probably one of the worst for finding free things without any further thought about what’s happening behind the scenes.
    At the same time though, many of these websites may not even have had a first glimpse from me without the free offer so that makes it really tough to decide what’s right.
    I guess the thing to do is – be upfront. Tell them you are offering this free product/service as an introduction to their paid version (in a nicer way of course)
    Does this make sense to you?

    • Lenie — it’s true that the free offer lured you in. Nothing wrong with that. As you pointed out, you’ve got to be upfront that free only lasts so long and then you’ve got to start paying. That seems perfectly reasonable to me.

  11. This is one that’s got a lot of people stumped I’m sure. Should we get paid for our content that we slave over to make sure it is helpful and what our readers want and need? Of course. But I agree. Everyone is used to getting this for free and I dont think that is going to change. And the surest way to anger them is to give them the content free, free, free and then BAM start charging. They will just go to some other site that is still dishing it out for free. Maybe I shouldnt have commented because I certainly don’t have it all figured all out. Maybe someone else does. 🙂

    • Susan — Well, I sure don’t have it figured out either. A few years ago I took a course to learn how to install a shopping cart on my site, etc., etc. Of course, I hadn’t thought through what I would sell. How could I bundle a bunch of blogs and sell those? It wouldn’t work because each post has to be customized. That’s when I realized I wouldn’t sell from my site but use it instead as a place to establish my authority and as an archive of my writing. The business I have is through referrals. You read all these stories of how people — the superstars like Michael Steltzner and Danny Iny — are raking it in. But I think they are the exception not the rule.

  12. This post really hits the nail on the head for a lot of aspects of how the internet is used. I think freemium is the only way to go because people do expect things for nothing now. You have to give to get it seems. And in a way Im happy to do that. I particularly liked the free music /pay for concert tickets example. To me that summed it up. Loads of people are doing free webinars now that really do provide a lot of good material. But if you want to know more you have to pay. In the example of free books, what people are really giving away is the opportunity for people to review their books which then in turn will help sell books. In that sense it’s a win win. But I do share your frustration of doing a lot of work for nothing.

    • A.K. — in your case, as an author, there is a reason to give away books to reviewers, but that’s a small universe and, as you state, a good review can sell books. The freemium model seems fair because buyers know that while they are getting something for free at the beginning, if they like what they get, they will have to pay in the future. So we’ve got to give them something good to keep them as customers!