bwagy, the blog of Ben Young

Freemium works by providing a base service free, their tiers of service at a premium.

Flickr is an early example of this, use their service for free, upload a decent amount of photos a month.  Premium service offers increased upload for heavy users and photo sets (as well as a nice little badge).

I’d like to see more of this in day to day life:

• Free bus rides as long as you stand.  Pay a premium for seating, can even tier the seating offering a more comfortable seat.
• Do the same with trains, free to stand, pay for seating.
• Free broadband as long as you use the modified browser which earns revenue from all searches.  Pay for access to unlimited Facebook & YouTube or pay for backups, file sharing mode.

Offering something for free offers a great lead in and conversation for your customers.

It also paves the way for more customers through the doors, however you do have to be smart and ensure there is the upsell, as without it you are just catering to freeloaders.

What free models would you like to see? Or have seen? Be great to hear from you…

Monetising your web service has been a topic I am forever intrigued with and been bouncing around as a blog post for a few weeks now.

Given recent discussions on Twitter I thought I’d grab this out of drafts and post it.

In terms of monetising your service, what options are there?

Freemium
Idea is provide a free service with a premium model where loyal fans pay for extras.  The inherent problem is creating enough value in the premium option to swing users to pay (creating status is key).

Ads based
Make money off advertising, default is to use adsense.  Problem here is this is based on large volumes to cover your services.  No good if your starting out.

Glue ons
Features to your site that are actually of value to your users.  I call them glue ons.  You glue on a new feature (if your users like it, it sticks, if not it falls off).

Examples include: Job Boards (where people pay to list), Toolbars (which generate revenue help user), Consulting Time/Services, Ebooks/Book…

Long tail of monetisation
There are lots more: donations, blog sponsorship / paid blogging, selling links, cross selling, special one off content, limited edition merchandise

However….

Looking at all of the options think anything that helps your users is likely to help you.

A job board that helps your visitors whom will need a job at one time or another, a paid fan club that gives me extra benefits (and status) that no one else gets, access to special reports that other have to wait 3 months for.   Think about what you can glue on.