If you’ve never heard of it, it’s a business model (term coined by Chris Anderson in The Long Tail) where you offer part of your services for free and encourage your customers to upgrade to a premium (paid) version.
If you use Hulu, Pandora, LinkedIn, or even Dribbble, then you’re familiar with the model.
And it may be tempting to consider a freemium model for your design business.
After all, you could design a logo or layout a web page for a potential client in hopes that they love it so much they’ll have you finish all their design work and they’ll become a full-time client.
It sounds nice, right?
But should designers work for free?
That’s the big question.
Of course, there will be thousands of designers who read this post, get to this point (if I’m lucky) and close their browser window in anger mumbling something about spec work under their breath.
I get it.
And even though we’ve talked about why designers should consider tolerating spec work on this blog, I mostly agree with you.
Working for free is (almost) never a good idea.
Here are a few reasons you should find a different marketing tool and/or business model than offering free services:
1. Freemium works best in the masses. The freemium model only works if there are a lot of people using your services. Only 4% of Hulu users sign up for Hulu plus (the paid version of the tv show-streaming service), but they’ve got a huge number of users. In fact, their user base is so large that the seemingly small subsection of customers that pay for the premium content lands at over 3 million people. At $8 USD/month, that’s a nice chunk of money.
But unless you can get millions of people using your free services, with the hope that a small fraction (remember, 4%) will upgrade to your paid services, the freemium model is hard to sustain. Especially when you’re trading hours (service) for money.
2. Freemium works best when you’ve got a mass service. The next reason the freemium model is hard for designers to utilize is because we, as an industry, tend to trade our time for money. Whether or not you think that’s a good way to run a business, it’s (without a doubt) the most common way designers charge their clients.
So unless you can dedicate 96% of your work hours to free services in hopes that the remaining 4% of clients who upgrade to your paid services can also be happy with only getting 4% of your time, you’re pretty much sunk before you try.
3. Freemium conditions your customers. Imagine offering a free page layout to one of your future clients. They love it so they hire you to redesign their whole web site. Awesome, right?
Well, sort of.
But what happens the next time they want to embark on a project? If they’re a good client, they’ll just hire you because you’ve proven yourself. If they’re a regular client, they will ask you do draft something up that they can look at again. And guess how much they’ll want to pay you for that mock up…
I mean, you did it for free last time, why would you charge them for your work this time.
Is there a place for free design work?
So is there a place for free design work?
I mean, in the rest of the world, the freemium model seems so lucrative.
I think there is a place for it.
But you’ve got to flip the sequence.
If you want to offer free services to your clients, follow the free basement rule.
The free basement rule
There’s a new neighborhood of houses going in near my neighborhood and there’s a giant sign up that says “Free finished basement with purchase.”
Now, do you think that company is really just eating the cost of building and finishing the basement?
Of course not.
They’re figuring it into the cost of the entire project (the new house).
And so it should work with your design clients.
Offer them something for “free” after they commit to your services. And then work it into your budgeting and financial planning to make sure the free item won’t sink your business.
It could be something like: “Free coffee mugs when I design your logo” or “Free twitter and facebook design when I redesign your web site.”
See what I mean?
To free or not to free?
What do you think?
Did I get it right?
Should designers avoid a freemium model? How should designers use “free” as a way to build business? Or should they avoid it altogether? Leave a comment and let’s talk about it.