This PPT slide, part of the 46-slide Psychology of Product Adoption PowerPoint presentation, presents an overview of the "freemium" business model, emphasizing its reliance on the Endowment Effect. This model allows users to access a basic version of a product or service for free, while charging for enhanced features or functionalities. The text indicates that this approach is particularly effective in the context of Internet Software as a Service (SaaS) companies.
Three tiers of offerings are outlined: Small, Medium, and Enterprise, with corresponding price points of $0, $10, and $100. The Small tier is highlighted as free, which likely serves as an entry point for users. The Medium and Enterprise tiers introduce costs, suggesting a structured path for users to upgrade as their needs grow.
The slide also references the Prospect Theory, which posits that it is more challenging to persuade a customer to make that initial financial commitment compared to subsequent spending. This insight is crucial for understanding consumer behavior in the freemium model. The model's effectiveness is attributed to its ability to shift the customer's point of reference, making them more likely to perceive value in the paid options after experiencing the free offering.
Overall, the slide succinctly captures the essence of the freemium model and its psychological underpinnings, making it a valuable resource for executives considering this approach in their own businesses. It highlights strategic pricing and the importance of user experience in driving conversions from free to paid tiers.
This slide is part of the Psychology of Product Adoption PowerPoint presentation.
Designed by a firm of ex-consultants from McKinsey, E&Y, and Bearing Point, this presentation discusses the Psychology of Product Adoption. It covers important concepts like Prospect Theory, Innovator's Curse, and Endowment Effect.
EXPLORE MORE SLIDES FROM THIS PRESENTATION
EXPLORE MORE PRESENTATIONS ON
Behavioral Economics Product Strategy Psychology Product Launch Strategy User Experience Product Adoption Consumer Behavior SaaS
Flevy is the world's largest knowledge base of best practices.
Leverage the Experience of Experts.
Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.
Download Immediately and Use.
Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.
Save Time, Effort, and Money.
Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.
