Unlocking sales opportunities with freemium selling

In today’s market, where costs remain a primary consideration in purchasing decisions, offering alternative payment structures can empower dealers to foster long-term business relationships and enhance value propositions

While “freemium selling” may be a relatively recent term, the concept has been around for some time. It involves providing customers with a basic product or service for free, such as a printer, and then charging for additional features or enhancements, such as a subscription package for paper and ink. Similarly, the software and gaming industry have long used freemium models to entice new customers and broaden sales opportunities.

The appeal of freemium models

The appeal of freemium arrangements for customers lies in the opportunity to explore new technologies without a significant upfront investment. For dealers, this model offers the chance to upsell upgrades, add-on products, and consumables, turning a one-time purchase into a long-term relationship. However, one of the challenges of the freemium approach is that not all customers may opt to upgrade their equipment. Dealers should address this by offering customisable enhancements to the product package, tailored to individual customer needs and preferences.

So, how can this approach be applied to other aspects of the dealer business, and what advantages does it offer? One key element is finding the right balance between sales volume, value and frequency. For instance, a dealer could sell a kettle to an office as a standalone purchase. Alternatively, they could provide the kettle free of charge, along with a year-long contract for supplying tea and coffee.

While no one wants to give away products for free, establishing a mutually beneficial package can yield significant returns over time as the relationship with the customer deepens. Dealers naturally become more attuned to the additional products or services that the customer may require, leading to opportunities for further sales and expansion of the business relationship.

Add-on value

Although freemium models bear resemblances to tactics like free trials or limited-time offers, they are gaining traction among customers. One reason for this is that customers prefer not to undergo lengthy sign-up processes for short-term benefits.

Another notable advantage of freemium models for dealers is their ability to introduce customers to new products they may not have previously considered by offering dual or complementary packages. For instance, dealers could offer a free first aid box with the purchase of a regular supply of first aid packages, which could be expanded to include hygiene and PPE products as additional add-ons.

Freemium selling may have originated from the software and gaming sectors, but its adaptability across various product categories underscores its relevance and potential within dealer businesses. By offering customers the opportunity to explore products and services with minimal initial investment, dealers can not only foster long-term relationships but also unlock avenues for upselling and value-added services. While the freemium model may not suit every product category or every reseller business, considering the rising demand for alternative purchasing methods and the advantages of nurturing long-term business relationships, it may well be worth considering in which areas this structure may work for your business.