Pricing and product adoption · Randomized field experiment and customer-choice analysis
Selling the Premium in Freemium
Gu, X., Kannan, P. K., & Ma, L. (2018). Journal of Marketing, 82(6), 10–27.
Plain-English take
Paperback titles accompanied by an additional premium version had higher sales than control titles. For your marketing: When testing SaaS tiers, consider how a new premium option changes comparison among existing plans.
How much weight to give this
4.0/5 Useful evidence with meaningful caveats
The 1–5 evidence-check score is a practical reading aid, not a formal peer review or a probability that a conclusion is true. It combines design strength (2 points), sample reporting (1), comparison/control clarity (1), and how much of the paper could be checked (1). Access affects how confidently this directory can assess a study, not the study's underlying quality. Blinding is reported separately because it is not relevant to every design.
Random assignment provides a strong comparison for effects in the tested setting.
A usable sample size is not stated in the profile's accessible source.
Randomized comparison; confirm the control condition and analysis in the paper.
This profile could be checked against an abstract or metadata, not the full paper.
Double-blind? Blinding is not reported in the source reviewed; that does not establish whether blinding was or was not used.
Research question
What the authors investigated
Can adding another premium option increase demand for an existing paid option when a free version is available?
Design
A randomized field experiment with an online content provider tested product-line extensions alongside a free PDF version and analyzed individual customer choices.
Sample and setting
Book titles offered as free PDFs with paid paperback and additional e-book or hardcover options; the abstract does not report the experiment's sample size.
Reported result
What the study found
Paperback titles accompanied by an additional premium version had higher sales than control titles. The lift was stronger for more popular or cheaper titles, and the e-book extension worked better when its price was closer to the paperback price. The authors identify compromise and attraction effects in customer choices.
This is a paraphrase of the source. Check the original paper for definitions, estimates, statistical uncertainty and analysis details.
Scope and transfer
Limitations to keep in view
The field setting is online book sales with a particular free and paid product structure; results may not carry over directly to feature-gated software. The abstract does not provide sample size or effect magnitudes.
Possible founder application
When testing SaaS tiers, consider how a new premium option changes comparison among existing plans. Run a controlled packaging test and monitor plan mix and total contribution, not only premium-tier conversion.
Evidence access
Publisher abstract; full text access may vary
Journal of Marketing publisher abstract and bibliographic record; profile summarizes the described experiment without adding unreported sample counts.
If only an abstract or metadata was available, the profile is limited to claims supported there. A paper's paywall does not change its evidentiary status, but it limits what we can substantiate from accessible text.