Department of Management

Freemium strategies and tactics for online digital firms

Research output: Contribution to conferencePaperResearch

The freemium business model has recently become one of the most dominant business models in online markets. However, there is still a limited understanding of why some online digital companies are able to build sustainable freemium business models while others are not. The purpose of this article is explain the success of freemium firms from a strategic point of view. Four case studies of successful online digital firms were conducted. Based on the findings, the paper categorizes and describes the strategy and a set of common tactics that enable and support a freemium business model execution in an online digital business. The findings indicate that successful freemium business models derive from the execution of a ‘prospector’ strategy. The common denominator for all case companies is the constant build-up and maintenance of a user base that can in turn support further innovation and market expansion. The identified strategies and tactics can help new and existing companies to develop a freemium business model and scale it up. The article contributes to the research stream on business model development of online digital companies and extends the current understanding of the freemium business model logic. The presented research is however limited to digital companies applying successfully a freemium business model by offering their products and services online.
Original languageEnglish
Publication yearJun 2017
Number of pages24
Publication statusPublished - Jun 2017
EventEURAM: European Academy of Management - Scotland, Glasgow
Duration: 21 Jun 201724 Jun 2017

Conference

ConferenceEURAM
LocationScotland
CityGlasgow
Period21/06/201724/06/2017

    Research areas

  • Business Model, Business Model Innovation, Freemium business model, DIGITAL STRATEGY

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