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A User Centered Approach to increase Conversion Rate in the Freemium Business Model

Rama, Mergim LU and Henriksson, Petter LU (2016) MAMM01 20161
Ergonomics and Aerosol Technology
Abstract
Within the software industry it is now common to use the freemium business model; giving away the core product for free while charging for additional premium features. A risk for companies adopting the freemium business model is that the percentage of paying customers is not high enough to both subsidize all the free users and make profit for the company.

This thesis investigates how the design of the user experience can increase the conversion rate from free users to paying customers. The research was made with a user centered approach and involved four case studies (Dropbox, Skype, Evernote and Unity) to conclude how already successful products have implemented the freemium business model. Additionally, since the freemium business... (More)
Within the software industry it is now common to use the freemium business model; giving away the core product for free while charging for additional premium features. A risk for companies adopting the freemium business model is that the percentage of paying customers is not high enough to both subsidize all the free users and make profit for the company.

This thesis investigates how the design of the user experience can increase the conversion rate from free users to paying customers. The research was made with a user centered approach and involved four case studies (Dropbox, Skype, Evernote and Unity) to conclude how already successful products have implemented the freemium business model. Additionally, since the freemium business model has high predictability, an elicitation of important user metrics to track was made. The metrics can be used to make design decisions based on insight about actual user behavior.

The case studies resulted in a summary of 11 guidelines that explain how to design the user experience in order to address the challenges with the freemium business model. To concretize the guidelines and to make it easier to understand how the guidelines could be used, example designs were created. (Less)
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author
Rama, Mergim LU and Henriksson, Petter LU
supervisor
organization
course
MAMM01 20161
year
type
H2 - Master's Degree (Two Years)
subject
language
English
id
8882827
date added to LUP
2016-06-20 10:59:15
date last changed
2016-06-20 10:59:15
@misc{8882827,
  abstract     = {Within the software industry it is now common to use the freemium business model; giving away the core product for free while charging for additional premium features. A risk for companies adopting the freemium business model is that the percentage of paying customers is not high enough to both subsidize all the free users and make profit for the company.

This thesis investigates how the design of the user experience can increase the conversion rate from free users to paying customers. The research was made with a user centered approach and involved four case studies (Dropbox, Skype, Evernote and Unity) to conclude how already successful products have implemented the freemium business model. Additionally, since the freemium business model has high predictability, an elicitation of important user metrics to track was made. The metrics can be used to make design decisions based on insight about actual user behavior.

The case studies resulted in a summary of 11 guidelines that explain how to design the user experience in order to address the challenges with the freemium business model. To concretize the guidelines and to make it easier to understand how the guidelines could be used, example designs were created.},
  author       = {Rama, Mergim and Henriksson, Petter},
  language     = {eng},
  note         = {Student Paper},
  title        = {A User Centered Approach to increase Conversion Rate in the Freemium Business Model},
  year         = {2016},
}