Freemium vs. Paid Models – How to know which one makes sense

Very good article about a formula that actually lets you determine whether a freemium or paid model is right for your business.

With this in mind, Mullany’s equation for freemium businesses looks like this:

Price Paid by Premium User – Cost of Proving the Service to the Premium User – [ (1/Ratio of Premium:Free Users) * (Cost of Free Service Per User + Cost of Marketing to get a Free User) ] = Profit Per Premium User

Check out the full article over here.

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