
The Freemium Model's Reciprocation Effect - MintChocoisEw
https://hackernoon.com/psychological-reason-behind-the-success-of-freemium-model-udeg3z9i
======
troydavis
I don’t think industry-wide stats bear this out, and they may actually support
the opposite conclusion: people mostly upgrade only when absolutely required
to.

Dropbox’s conversion rate is 2-4% (depending on what minimum level of activity
one uses for the denominator). The difference between theirs and Spotify’s is
that with Spotify, all free users hear in-stream ads. With Dropbox, some % of
users are satisfied-enough with the free product.

Dropbox is both more representative of typical consumer conversion rates
(1-3%) and more representative of the knobs that a freemium business has. In
both cases, the conclusion isn’t that people upgrade due to perceived
goodwill, it’s that Spotify - and any business which people listen to
constantly - has an unusually effective way to motivate users.

