Skip to content
J·BJon BishopIndependent growth marketer

Free trials · Randomized field experiment and customer-choice analysis

Selling the Premium in Freemium

Journal of Marketing · 2018

Xian Gu, P. K. Kannan, Liye Ma

Summary

Paperback titles accompanied by an additional premium version had higher sales than control titles.

For your marketing

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.

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.

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.

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.

Research sources

Journal of Marketing publisher abstract and bibliographic record; profile summarizes the described experiment without adding unreported sample counts.

Prefer to write? Send Jon a message.