Friday, September 25, 2009

Tip of the Week: "Freemiums" As a Business Model

Choosing a business model that will generate revenue is important in the online and off-line worlds, especially in a recession, when investors and creditors are particularly jittery.

One revenue-generating model that has worked very well entails the concept of a "Freemium." A freemium model starts with giving away free stuff or free access to build a loyal customer base and then charging for deeper access or merchandise. Author Chris Anderson discussed this idea at Advertising Week at the Mixx Conference. His comments were captured and posted by Ad Age in this online video.

Chris notes that Club Penguin and the online Wall Street Journal both use the freemium model to lure customers to start opening their wallets to buy premium content or merchandise.

Think about your business model. Can you think of creative ways to generate revenue from a loyal customer base?

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