Customers shopping in a brick and mortar store have the option to try before they buy. They can also mix and match items to see what works for them and they can engage with a salesperson to find out more. Online services, apps, and software, on the other hand, are limited to what users can see on the web, which is why creating an interactive sample that enables customers to play around with your product could prove a real attraction.

For example, take a product like Adobe Photoshop, designers and professional photographers will no doubt be very aware of its capabilities, but home photography enthusiasts may be intimidated at first glance. By offering a free trial of their entry level Photoshop Elements 11, Adobe can not only engage with a new market of amateur users, but also demonstrate the potential of the full product suite and an ability to grow with the customers' needs.

Create Useful Tools like Shutterstock

An effective way to convert freemium customers into paying customers is by offering a free tool, with paid premium options. A great example of this strategy is Shutterstock's Color Spectrum. 

Shutterstock is a stock photography provider, so many of their users work in web design. Customers often come to the site looking for an image to fit a certain color scheme or brand design, which is where Spectrum comes in. Spectrum combines a keyword search with a color scale, so designers can search for purple wildlife photos or yellow subway signs, for example. Spectrum is free to use, which is a great way to provide services to designers. However, if designers want to use the images they find in their Spectrum search, they have to purchase them—which provides Shutterstock with a clear conversion path for their freemium users.

Offer a Taster with Freeware like Evernote 

Freeware is when the bulk of a service is free, and the company makes money on a small number of members who choose to pay for premium or extended services. Companies such as Evernote do this to great effect. One of the most interesting phenomenon that has been seen with freemium services is the amount of word-of-mouth marketing customers do of their own initiative. This is largely due to the fact that users love a highly effective, free product. So much so, customers become brand advocates and often upgrade to premium services.

The key to success here is in creating a good enough free product that people will want to continue to use it long term. The longer customers stay with you, the more likely they will come to rely on your product or service and recommend it to others or eventually start paying for it.

Free Forever and Indispensable like Dropbox 

Another fantastic freemium approach is to offer a limited amount or capped use service for free, similar to that offered by Dropbox. Users signing up for a Dropbox account are given 2GB of start-up cloud storage and file synchronization for free. It is a relatively simple concept, but the facility has become an indispensable part of daily life for individual and business users. 'So, what's in it for them?' you might ask. The more storage customers' use, the more storage they are likely to need. Once those needs exceed the free limit, customers are likely to pay for an upgrade and Dropbox starts to earn. This traditional freemium activity turns customers into brand evangelists and the brand reputation expands organically. A freemium user may never pay for their individual storage and stay within the limits; however, if they find it useful they will likely tell their friends, their boss, their customers and so the message circulates and the popularity grows, bringing more profitable users along the way. The freemium approach isn't right for every business, but when used effectively, it can do wonders for your marketing strategy. Look through the above case studies carefully to see what might work for you.

Author Bio
Rob Toledo is a Seattleite who matches the usual stereotypes. Loves coffee, the rain, and prefers dogs to cats. When not rambling about marketing and web design, he can be found in the mountains either climbing or hiking.