Close this search box.

Software Folder

Freemium Benefits

How the freemium business model serves as a mutually beneficial strategy for both providers and users.

SoftwareFolder|Best Freemium Benefits 2024

Individuals and small businesses can access valuable products or services without immediate financial strain, while businesses employing this model can build a broad user base, encourage loyalty, and sustainably generate revenue through premium offerings.  Read on

This scalable revenue model is particularly advantageous for small businesses, providing a sustainable path to growth without relying solely on upfront payments… Read on

One of the primary advantages of the Freemium model is its ability to attract a large user base. By offering a free version of the product or service, businesses can reach a broader audience, including individuals and small businesses with limited budgets. Read on

Customer-centric content. Read on

Why Freemium?

freemium business model benefits

SoftwareFolder|Best Freemium Benefits 2024

How offering a free tier provides mutual opportunity

The freemium business model serves as a mutually beneficial strategy for both providers and users. Businesses employing this model can build a broad user base, encourage loyalty, and generate revenue sustainably through premium offerings.

Meanwhile, among many other crucial benefits, especially for small startup businesses and individuals, a free tier allows access to valuable products or services without immediate financial strain.

What we like most about this type of business model is that it aligns with internet best practices of promoting inclusivity and flexibility, while at the same time contributing to the agility and success of new businesses in a competitive digital landscape.

By utilizing a basic free tier version of a product or service, users can experience the value firsthand, gaining insight into its functionality and relevance to their specific needs.

Inclusivity and Community

For individuals and small businesses operating on tight budgets, a free tier allows a range of users to steadily and affordably adopt and “scale-up” on business solutions as they outgrow a basic free tier.

The transition from a free tier to a premium is often driven by the need for advanced features, increased capacity, or a desire for a more comprehensive user experience. As individuals and small businesses grow, their requirements evolve, making the premium offering an attractive proposition.

Another thing to note about the freemium model is that it can be used to encourage user engagement and loyalty. Users who have benefited from a free version of a product or service are more likely to become loyal customers when they decide to upgrade to a premium version.

With the growing user base that a freemium business model can generate, you can also build a community forum or membership where users can discuss and share tips related to your product or service.

The freemium model aligns with the principles of scalability. By strategically implementing the freemium model, businesses can effectively monetize their product or service while providing value to their users.

As part of a common strategy, many freemium-modeled businesses partner with online publishers and individual creators to help spread the word about their business.

By working with affiliate partners, freemium business model owners can reach new audiences they may not normally have access to.

Overall, the freemium revenue model offers several advantages for businesses and users. Freemium business owners can enjoy a sustainable path to growth, reduced user risk and hesitation, and an increased potential for building a large user base.


The Freemium model aligns
with the principles of scalability.

The freemium model readily allows for scalability; businesses can easily accommodate a growing number of users without significant infrastructure changes. This is because the basic version of the product or service is usually already built to handle a large volume of users, and the unlocking of features when a user upgrades.

The scalability of the freemium model is particularly beneficial for businesses operating in the digital space, such as software-as-a-service (SaaS) companies or online platforms. These businesses can easily scale up their operations to meet the demands of a larger user base without incurring substantial costs.

Furthermore, as the scalability of the freemium model enables businesses to offer additional features or premium services to their users, this allows them to generate additional revenue streams and cater to the needs of different user segments.

The Freemium model Pros and Cons.

The freemium business model has its advantages and disadvantages for both users and business owners. It provides users with free access and the ability to evaluate a product, while offering business owners a way to acquire users and generate revenue.

Other advantages include user acquisition, product awareness, upselling opportunities, feedback and improvement, and a competitive edge.

Like most businesses, the freemium business model also poses challenges in terms of revenue generation, value perception, and increased competition.

Here are some key takeaways

1 Offering a free version attracts a larger user base, aiding in quick and widespread adoption.

2 Freemium models help create awareness about the product, allowing users to experience its functionality without committing to a purchase.

3 The free version serves as a gateway to upsell premium features or services to users who find value in the basic offering.

4 A broader user base provides valuable feedback for product improvement and adaptation to user needs.

5 In crowded markets, a freemium model can give a competitive edge by enticing potential customers with a low-entry option.

6 Converting free users into paying customers can be challenging, especially if the free offering is sufficient for many users.

7 Managing a large user base, even if they are not paying customers, can be resource-intensive in terms of server costs, customer support, and maintenance.

8 Some users may perceive the free version as the complete solution, diminishing the perceived value of the premium features.

9 The success of the freemium model often depends on a small percentage of users upgrading, which can impact profitability if it doesn’t happen.

10 Balancing the free and premium features to retain both types of users can be a delicate task, and losing free users who don’t convert can impact the network effect.

Overall, the freemium business model can help create brand awareness by expanding the user base, encouraging word-of-mouth marketing, leveraging social media, showcasing expertise through content marketing, and providing opportunities for cross-selling and upselling.

Our most popular Freemium
recommendations and tips

Now that we have explained a few of the benefits of the freemium business model, I’d like to share details of some of our favorite noteworthy software solutions.

The following are just some of the most popular tools we have tried ourselves that offer a free tier. Each one has a free entry level and offers excellent service and products.

SoftwareFolder|Best Freemium Benefits 2024

Productivity is one of those categories that could have an all-encompassing meaning when it comes to task-oriented software. Take Notion, for example, and the multiple ways in which you can use it; not just for note-taking and sharing with team members, but also for project managing, creating wikis, brand guideline pages, databases and lots more.

As a tool for enhancing productivity Notion provides an all-in-one workspace that empowers users to generate and arrange digital notes, tasks, and databases within interconnected “pages.” It amalgamates the functionalities of multiple applications, including a to-do list, project management tool, wiki, calendar, and note-taking app. 

This versatility allows users to streamline their workflow and consolidate their tasks and information in one place, eliminating the need for switching between different apps. Notion’s intuitive interface and customizable templates make it easy for users to create and organize their content according to their specific needs and preferences.

Notion is a comprehensive productivity tool that combines the functionalities of various applications into one cohesive workspace. Its flexibility, collaborative features, and intuitive interface make it an invaluable tool for individuals and teams looking to enhance their productivity and streamline their workflow.

Labourie DSC 0288

Skylum software, formerly Macphun was founded since 2008 and is the company behind award-winning Luminar Neo, a cutting-edge image editing suite for professionals and amateurs alike.

Luminar Neo is designed for photographers and photo artists and although in a few different guises including Aurora HDR, it’s as if all of the different previous Skylum software tools have been rolled into one rather sleek interface.

Now in pursuit of exploring the power of generative AI, Luminar Neo provides great value for money especially for photographers and artist ready to brave the future of image editing.

Freshworks Day 5

Customer Service Software by Freshworks include a comprehensive range of task and customer relationship management solutions. These solutions are designed to help businesses effectively manage their customer interactions, streamline their support processes, and enhance overall customer satisfaction.

One of the key features of Freshworks‘ Customer Service Software is its ticketing system. This system allows businesses to easily track, organize, and prioritize customer inquiries and support requests. With this feature, businesses can ensure that every customer query is addressed in a timely manner, leading to improved response times and customer satisfaction.

Another important feature is the knowledge base management tool. This tool enables businesses to create and maintain a centralized repository of information, such as FAQs, troubleshooting guides, and product documentation. 

By providing customers with self-service options, businesses can reduce the number of support tickets and empower customers to find answers to their questions on their own.

Freshworks’ Customer Service Software also includes a live chat feature, which allows businesses to engage with customers in real-time. This feature enables businesses to provide immediate assistance and support, leading to faster issue resolution and a more personalized customer experience.

Featured images realized with Nightcafé