4 UX Tips To Help You Capitalize on the Freemium Model

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Over the past several years there has been a seismic shift in the way that consumers access the Internet. After decades of supremacy, desktops were supplanted late in 2016 as a majority of Internet traffic came from mobile devices for the first time.

Driving this change is the mobile application market. This year, mobile applications are anticipated to generate a staggering $70 billion in revenue. But 90 percent of these earnings will come from apps that operate on a “freemium” model—a free application with additional, premium features which can be unlocked by making in-app purchases.

Capitalizing on this business model can be lucrative, but it is equally challenging to do right. Users may have chosen your application specifically because it was free. As such, you must reconcile the idea that your app must be useful and engaging as a free service, while encouraging adoption of paid features at the same time.

In order to accomplish this balancing act, it is imperative that the development and design of your application has a firm foundation in UX best practices. Your business should be performing thorough user research, from establishing user personas to conducting actual testing. Your design team should be focused on building a visually pleasing and intuitive template, while working collaboratively with developers to ensure that it is possible to build your vision on time, and on budget.

More importantly, however, is the knowledge of exactly how UX-based design can be used to convert a user of your free application into a customer willing to pay for additional features. Here are a few examples to help you begin the planning of your project.

1. Positive psychological stimulus through gamification

Enticing a user to move from a free to a paid service will require that you delight them when they take an action that will encourage such behavior. Gamification can encourage users to establish a longer relationship with your app, keeping them engaged as they work towards in-app goals. To give a repeated positive psychological response, schedule daily or hourly awards that will ensure users keep coming back, increasingly enticed to spend in order to unlock new features that can help them reach a goal.

2. Cultivate a sense of community, engagement, through social channels

Integrating a social element into your freemium app can help users foster a sense of community that will in turn lead to greater engagement. This could come in the form of an in-app messaging service, which could allow users to either collaborate or show off their progress with various gamification elements. This can also lead to a better user experience for anyone that finds the application confusing. Rather than abandoning the app entirely or contacting customer service, they’d be able to reach out to another user who may have had the same experience.

You can further encourage adoption of paid services if you can compel users to link their app with their own social channels. By offering additional trials by doing so, you’ll move the user closer to the point of conversion while encouraging more engagement at the same time. As an added benefit, access to user social channels will also help you learn more about your customer base.

3. Isolating conversion opportunities

It is helpful to prompt users of your free service so that they are reminded of the additional opportunities they can enjoy with the paid version. At the same time, bombarding users with fill forms or keeping them from accessing features at a specific moment may aggravate and alienate them. Instead, seek to deploy solutions only at points in the user’s journey when it is most likely that they will be compelled to begin spending. User testing and research can be critical for this step, as different configurations and processes may have a diverse set of psychological responses.

In order to mitigate the chances for a negative response, it would be wise not to encroach upon users without giving them an opportunity to use paid features on a trial basis first. This will help them understand what it is they’re paying for, while moving them closer to a conversion point. And when you do prompt users, do not do so without attaching some sort of reward to it.

4. Retaining old users with new iterations

Converting users into customers is only one part of the battle when it comes to generating revenue from freemium applications. You’ve got to retain them so that they keep spending too. But over time, the rewards or free features that you use to entice new users may not be as appealing to individuals who have been customers for months or years already. This challenge presents businesses operating on a freemium model with a sort of inflation. If you don’t address this issue, new users may feel they’ve missed the boat when they look at others that have already benefitted from past rewards. But if you offer too many benefits to new users, your loyal customer base may feel they were neglected themselves. As such, you must address this inflation by customizing and personalizing the user experience.

While leveraging a freemium model can be a highly lucrative way to build up your mobile presence, it is a delicate balancing act which demands a highly-trained and experienced UX team. Before your business gets started with its next project, learn what Uptop can do for you by reviewing our approach to UX.