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Many a Fortune Starts with Freebies

May 11th, 2012
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If you’ve got a new product or service that you’re trying to sell, you may want to think about giving it away to begin with. In a new survey, 42 percent of consumers said they pay for new products and services after they’ve experienced them for free. The so-called "freemium" business model is the way a pantheon of marquee brands, from to Words with Friends, first gained traction in the marketplace.

The freemium business model involves giving away a basic version of a product or service (usually a digital offering such as software, games or web services) for limited use, but charging a premium for long-term use and advanced features, functionality, or related products and services. Freemium offers are a key to success and market penetration for new and emerging products or service categories, according a study by the research arm of iYogi, a computer support services company, which surveyed more than 2,000 of its customers.