Personal Small Business Enterprise

“Freemium” Applications and Your Business

Posted November 29, 2013 in Business, New Technology, Smartphones, Technology Trends by 0

Everyone likes the up-front price of free. But in business, as in life, something with zero initial cost can sometimes end up costing your company in the long run. As the market for Internet services and mobile apps continues to expand, companies of all stripes are learning that free isn’t always the most cost-effective way to go.

We’ve all been there: we need to get something done quickly on our smartphone or tablet. So we hit up the app store and search for the perfect app. The resulting list of titles includes some free ones and some paid ones. Of course we’ll gravitate toward free – it’s human nature, after all, and it’s so much easier to tap that download button if you don’t have to consider parting with your hard-earned cash – but that isn’t always the optimal path.

Increasingly app-savvy developers are learning how to get us to part with our cash by offering free versions of their apps to get us hooked, and then offering premium features or a more robust experience for an additional fee. It’s called the “freemium” model, and it’s become one of the most popular ways for software developers to encourage us to use their products without having to first commit hard-earned cash for the privilege.

Once upon a time, it was called try-before-you-buy, and when you’re staring at a list of apps in the app store, paying even a nominal fee for something you’ve never even heard of before can be a tough sell. Consumers seem to agree, as downloads of free apps already dominate their paid counterparts in app stores, a trend that will only accelerate in the years to come. Research firm Gartner expects free downloads as a percentage of total app store transfers to rise from 89.6% in 2012 to 94.5% in 2017.

As the trend toward free accelerates, businesses may want to brush up on their knowledge of the landscape. Freemium apps can work in a number of different ways, including:

  • Feature-limited. You can load the app and use it for as long as you want, but if you want to access the more advanced features, you’ll have to pay to upgrade.
  • Ad-supported. The full app will be available, but there will be ads on-screen. In some cases, the ads are easy to ignore and still accomplish your work. In others, the ads are so obtrusive – like those pop-ups that appear every time you switch screens, timed ads that stay on-screen for a predetermined amount of time, or videos that automatically run and consume your mobile bandwidth in the process – that they can impact productivity and drive up your costs.
  • Timed. You can use the full app for a certain number of days before it is disabled. Some apps are based on number of uses before they’re disabled.
  • Watermarked. All features will be available, but when you try to print or share content, a non-removable watermark will be laid over your output. This renders the entire app virtually useless for in-a-pinch customer-facing work but still allows you enough visibility into the app to make a purchase decision.
  • Social media-enabled. The initial version is feature-limited. Instead of paying to unlock additional functionality, you can instead share your perspectives – via likes, comments, or reviews – on popular social media sites. It’s a great way to get a “free” upgrade to the full version, but you need to consider the optics of your employees shilling for something on Facebook or Twitter.

To prevent your employees from wasting their time evaluating the wrong apps, delivering client-facing work via potentially less-than-productive freemium-sourced tools, or compromising your brand image on social media platforms, you should consider:

  • Constantly evaluating mobile user needs. Regularly communicate with your users to ensure the software you currently support is meeting their needs. If you aren’t having these conversations, expect your users to take matters into their own hands, which could make your technology harder – and more expensive – to support.
  • Updating your acceptable usage policies. Build software evaluation expectations into your acceptable usage policies. Include specific details regarding what they may and may not do when it comes to installing and using new apps for business purposes.
  • Publishing your own list. Don’t leave it to your employees to figure it out. Actively scan the popular app stores that support the devices your employees currently use – and that you support. Evaluate different apps – free, freemium and paid alike – and consider publishing brief reviews of them to help employees figure out which ones can help them most.
  • Updating your expense policy. Traditional expense policies don’t specifically allow for in-the-field purchases of apps and online services – which can incent employees to make poor choices when looking for solutions to fill in day-to-day productivity gaps. Spell out expectations and give them enough room to make the right, optimally supported decisions every time.

The bottom line
Freemium apps represent an increasingly popular way for us to try apps before we buy. But the different forms of freemium can impact your near-term productivity if you’re going to rely on them to actually get work done. Keep in mind the different models of freemium, and give your employees the support they need to always choose – and use – the right software tool for the job.

What has your experience been like with freemium apps? Let us know in the comments section below.

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