Freemium vs. Freebie

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I had a great dinner the other night with a guy who has grown a solid business. He's a visionary, He's a rock-solid operations guy. He has that charismatic sales style that we all wish for. He is not a fan of HATES marketing. I love it when we start out a conversation bashing marketing...it forces me to put my listening-cap on!

One key topic from the conversation last night is around what he called "freebies". I've had many dinners with many business owners over the last few years, especially in the SaaS marketplace where this topic comes up.

I asked him what he's "giving away".

Turns out that he is leveraging the classic freemium model, which can work well in some environments, but didn't know what a freemium was. A FREEMIUM is a business model where you are giving a way a part of your solution in an effort to demonstrate a limited percentage of the value that the full solution can bring.

A freebie is a whole different animal. A freebie could be a give-away at a tradeshow, or a free license to the full version of your solution in order to win more business. A freebie could also be giving away a white paper or ebook in an effort to gain a relationship with new perspective custoemrs.

The biggest difference is around VALUE.

Freebies have little to no value delivered to the client for what your solution brings to the table.

Freemiums show a teaser of the full value someone can achieve.

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