Freemium is becoming a common business model for SaaS vendors wishing to gain market share in short time. The presentation provides an overview of the varied Freemium models used for B2B & B2C.

1. Igniting Your SaaS Cloud Sales
SaaS Freemium Business Model Overview
Revital Libfrand, Co-founder, Ignite Cloudware

2. 2
What is Freemium ?
Freemium is a business model based on the concept where the
company give a limited version of its core product away for
free and sell premium products or services
The freemium model is used in several variation both for B2B
& B2C
Examples:
Skype Provides
free Skype-to-
Skype calls
Sell other calls
type (landline,
voicemail,
mobile etc)
Gmail service
for businesses
provided for
free up to 10
users
Sell additional
mail users &
storage

3. 3
Types of Freemium Model
Capacity based
Freemium
Get limited
capacity
(usage, # of
users etc) for
free,
additional
capacity
requires
payment
Feature based
Freemium
Get limited
features for
free,
additional
features
requires
upgrade to
premium
version
Get Ads
Freemium
Get free sw
access license
with Ads;
Removing Ads
requires
payment
Use case based
Freemium
Free access
based on
usage i.e
Developer
free license,
Non
commercial
use free
license etc

4. 4
What companies wish to achieve with Freemium Model ?
• Gain large volume of users easily
• Brand awareness
• Generate product attention so free users will convert into
paid customers
• Gain community of product fans so free users will attract
paying customers
The Product is the Core !
Great, flexible & quality product that people
want & love is the most important condition
for creating a successful freemium model

5. 5
- Suit mainly B2B
- Consumer is exposed to all features from
day one
- Conversion to premium is easier from
consumer perception as the product is
already adopted.
Capacity
Based
Freemium
Capacity Based Freemium -Highlights

6. 6
- Suit both B2B & B2C
- Limited version must provide true
benefit to consumer to avoid churn
- Upgrade to premium is not trivial from
consumer perception as it requires users
new adaptation process
Feature
Based
Freemium
Feature Based Freemium -Highlights

7. 7
- Suit both B2B & B2C
- Consumer is exposed to all features from
day one
- Conversion to Premium is done to
remove vendor watermark or remove
sponsored Ads
Get Ads
Freemium
Get Ad Freemium -Highlights

8. 8
- This model is used to enable users adopt
product in certain environment
(developer, non-commercial, students etc)
so once they become decision makers
they will be more likely to pay for the
software
Use case
Based
Freemium
Use Case Based Freemium -Highlights

9. 9
Is Freemium the right business model for me?
Ask yourself these questions:
• Does my product adoption requires any
assistance?
• Who are my ideal customers? is
freemium right for them?
• Does the marginal cost of freemium
user is close to 0 with your product?
• Is freemium right for you (does the
math works for you)?

10. 10
If you plan Freemium to Premium….
SMBs may never reach the paying level and vendor should consider the cost
of free users
Vendor must communicate to Consumers the benefit of the additional
features and their ROI
Consumer learned to get alone in Ads environment
Ensure the Ads revenue model works for their product
Challenge to properly monitor consumers’ usage
Take into consideration the following challenges in conversion
process…..
Feature
Based
Capacity
Based
Get Ads
Use
Case

11. Are you struggling what is the
preferred Freemium to Premium
model suitable for your product?
11

12. 12
Go-To-Market Plan
• Product –targeted sector, geography, integration &
implementation issues, on-going support
• Pricing- MRR/YRR/Freemium model
• Promotion – sales strategy, online marketing promotion
strategy
• Place – company website, social networks, professional blogs
and websites.
Product Pricing Promotion Place
Go To
Market
Plan
Ignite Cloudware Provides wide Sales & Marketing services to SaaS
vendors.
Our Go-to-Market plan in a nutshell :

13. 13
Ask me how to build a successful go-to-
market plan for your SaaS business
www.ignitecloudware.com
+972-72-2116601
revital@ignitecloudware.com