8 Freemium Tools for Small Businesses

8 Essential Freemium Tools for Small Businesses

If you’re running a small business, you might have encountered the term, ‘freemium.’ There are dozens of terms that you need to learn in the business field, but freemium might be something that you would want to know more about. In this article, we will talk about freemium and the eight best freemium tools for small businesses.

What is Freemium?

So, what exactly is a freemium business model? It’s a type of acquisition strategy used to attract users to a product/service. Freemium does this by providing basic features for free, with the advanced features requiring a fee to access. So it’s a way for you to attract potential customers by offering your basic features for free. Once they get hooked, you then provide the premium feature, in which they will need to pay.

A popular example of cloud software companies employing the freemium business model are the following:

  • Dropbox
  • Skype
  • Spotify
  • LinkedIn
  • Slack

Freemium or Free Trial?

A free trial is an acquisition model where a free product or services is offered to customers for a limited timeframe. During that period, they can learn about the product and discover value before they actually start paying for it. When it comes to choosing a customer acquisition strategy, you will be torn between freemium and free trial.

In most cases, a freemium business model looks like a free trial strategy at the outset. However; unlike a free trial, freemiums aren’t time-limited. That means freemium users can use the basic features of a product or service for free, forever. It removes any initial barrier to adoption and allows users to experience and get hooked to products or services that you offer. As potential users realize incremental value over time, they will be willing to pay for the premium features and capabilities. That’s why the freemium model is a better option than a free trial.

If you’re running a SaaS business, then using a freemium as a customer acquisition strategy will greatly increase conversion rates on your website. However, a freemium strategy works best when the size of your potential users is extremely large, and the learning curve of your product is fairly flat. In other words, you need to have a broad customer base and an easy-to-learn product or service for a freemium business model strategy to work. Also, make sure you have all the best features on the premium version. Otherwise; if your customers can get all that they need on the basic version, they won’t have any reason to purchase the premium one.

Early-stage startups and other newly-established businesses will typically employ a freemium approach to acquire early adopters and test viability of their product-market fit.

Successful freemiums require a relatively easy learning curve and customer onboarding experience. The product or service needs to continually engage customers. That way, they can easily switch to the premium version once they are entirely hooked with your offer.

Keep in mind that it’s always your product that dictates whether you should choose a freemium model or a free trial strategy. It’s never the other way around.

Comparing Freemium Business Model Vs. Free Trial Strategy

Comparison Between Freemium vs Free Trial Strategy

When NOT to Try Freemium


While its perks and features are enticing, keep in mind that freemium is not for every SaaS business out there. It might not be fit for your business. Here are some questions that might help you decide if freemium is the right one for you:

  • Is there a market for your product? If there isn’t a massive TAM (Total Addressable Market) for the product, then it shouldn’t be offered for free. The vast majority of free users will not convert into paying customers, which will result in extra pressure on your existing resources. That’s why you should always make sure that you convert free users to paying customers later on.
  • Is your product built to self-serve? A freemium model is a volume game. If the product dictates heavy hand-holding, sales assistance, and human-touch to onboard users, going for freemium may not scale well later on.
  • Are there reasons for users to upgrade to a paid version? Unless new, useful, and attractive premium features offer users incredible value as they engage with the product, they may not have the right incentive to ever upgrade to a paid plan over the current freemium model.

Pros and Cons of Freemium

Like other customer acquisition strategies, freemiums also have their fair share of advantages and disadvantages. Make sure you carefully consider each point when gauging its viability to your business model.

Pros of Freemium Model

  • The free version serves as the perfect user base for experimenting with new features while getting valuable feedback from without upsetting the workflow of your paid customers.
  • Increases brand value as you start attracting more users through word-of-mouth and referrals from your existing user base.
  • Freemium helps you undercut competitors and stand out in a competitive market, all while gaining a significant amount of market share in at little time possible.
  • Lets you monetize the free plan by introducing ads, which also serve as a motivation for some users to upgrade to premium services.
  • Reduces CAC (Customer Acquisition Cost) by minimizing spend and letting your product drive acquisition. That way, you will still benefit even when clients use the free plan for an extended period.

Cons of Freemium Model

  • Freemium won’t work if you don’t strike the right balance between your base product and the premium version. If the freemium plan isn’t attractive enough, then you won’t attract new users. If the freemium models are too heavy, then the new users won’t move to the premium plan.
  • There’s a bleak conversion rate from free to paid. According to a book called “Free” by author Chris Anderson, only 5% of the entire customer base will belong to paid service. That means the revenue generated from 5% has to support 95% of free users.
  • Freemium causes an unnecessary and ever-increasing burden imposed on your operational resources, which results in ballooning costs that are predominantly caused by serving free users.

The Best Freemium Tools for Small Businesses

If you think that a freemium model is a right option for your business, you should consider using freemium tools to help streamline your customer acquisition strategy and boost your business. Further. With a multitude of options available, choosing the right freemium product can get daunting. Fortunately for you, we’ve listed down some of the essential freemium tools for small businesses.

Email Marketing: MailChimp

Do you need to start building your email lists right away? If so, then you can always rely on MailChimp. This freemium email marketing tool sends 12,000 emails to up to 2,000 subscribers per month model for FREE. That’s six emails per month if you have the maximum 2,000 subscribers, twelve if you have 1,000 subs, 20 emails if you have 500 subs, and so on at no cost at all! For its premium version, you’ll only have to spend $10 a month for additional features such as spam filter, automation, diagnostics and support. You can also go over 2,000 subscribers for $30 per month.

Social Media Management: HootSuite

Are you looking to manage your social media accounts and any incoming messages? If so, then HootSuite is the right choice for you. It allows you to manage up to three social media profiles for FREE. It’s great for businesses that want to monitor their posts on multiple social media platforms in a single dashboard. For its premium version, you’ll only have to pay for plans starting at $9.99 a month to access more profiles. You will also have added features such as advanced posting scheduling, enhanced analytics, team access, and more.

Messaging: Slack

Are you managing a team? Do you need a platform where your team can communicate with each other? There are a ton of options, but Slack stands above all as the best among the rest. Slack’s free version offers unlimited team members to create a private network with unlimited messaging for FREE. You can also search up to 100,000 archived messages and use their mobile apps for seamless and hassle-free communication. For its premium version, you’ll only have to pay for plans starting at $8 a month. Once you do, you will get additional features such as usage statistics, the ability to search all of your messages, give guest access, priority support, and more.

Image Creation: Canva

Does your small business need great images for your social media or blog posts? If so, then Canva can be a great source of amazing photos and images! It allows non-designers to create customized images for their business for FREE. This includes designs for cover photos, primary photos, social media updates, infographics, blog posts, business cards, posters, presentations, and more. For its premium version, you’ll only have to spend $1 for any images created with stock photography backgrounds. You will see a watermark overlay on stock photography backgrounds before you go to customize your image. That way, you can choose a different design or upload your background.

We are using Canva (free version) for our blog posts featured images.

Project Management: Wrike

Do you manage a small team that needs a product management tool? If so, then you can use Wrike’s project management feature. Wrike offers up to five team members to manage tasks, files, folders, and project activity for FREE. This will allow small businesses to get their projects organized at zero costs. For the premium version, you’ll only have to pay $49 to get more users to additional features like sub-tasks, deeper folder hierarchies, reports, time tracking, and more.

Google Penalty Checker: Fruition

Do you need to check if Google has placed a penalty on your website? If so, then you can use Fruition and its Google Penalty Checker. If you’ve noticed that your search engine traffic has decreased, you’ll want to know if Google or your SEO strategy is to blame. Fruition allows users to check and monitor two domains for Google penalties for free. For the upgraded version, you’ll only have to pay for plans started at $75 a month for additional features including data, statistics, additional domain, and updates on the latest Google algorithm changes.

SEO: SEO Powersuite

Speaking of SEO, you can also research websites linking to your competitors or build links to your own through SEO Powersuite. You can also check keyword rankings or perform an SEO audit of your website. SEO Powersuite allows you to do all of these SEO-related tasks for FREE. For the premium version, you will have to pay for the software editions starting at $299. Users will then have access to additional features such as saving your projects, creating automated tasks, sending reports to clients, reviewing ranking history, data exports, and much more.

Invoicing and Billing Software: ReliaBills

Do you need to send invoices to clients that have to be paid via Paypal or other money-transferring networks? Are you looking to get paid fast and have access to an automated way of creating and sending invoices? If so, then ReliaBills will give you all of it. This invoicing system allows you to send an unlimited number of invoices to an unlimited number of clients for FREE. That means you can create and customize professional invoices for as many clients as you have at zero costs. For the premium version, you’ll only have to pay $24.95 to upgrade to ReliaBills Plus. The premium version will give you additional features such as recurring billing, estimates, team access, and other payment options.

These are everything you need to get started with your freemium business model. For more information and inquiries about ReliaBills, contact our hotline at 1.877.93BILLS. You can also send us your inquiries via email at sales@reliabills.com.

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