What is "Freemium" meaning?

Freemium is a common business strategy used in digital products and services where the base offering is free to users, and additional features or functionality are available through a paid upgrade. This model helps attract a large user base quickly, especially in industries like software, mobile apps, SaaS platforms, and content creation tools.

Example

“Our SaaS platform uses a freemium model, so users can try the core features free and pay for advanced analytics and integrations.”

How is "Freemium" used in business?

In business, freemium models are used to drive user acquisition and build trust with potential customers. Companies leverage the free version to generate interest and upsell premium plans with expanded capabilities. It’s especially useful for startups and creators aiming to scale user bases before monetization.

Pro Tip

Make sure the free tier provides real value while making the paid upgrade compelling enough to convert users into paying customers.

Related Terms

Subscription Model, SaaS, User Acquisition, Upsell