A Smart Bear · Jason Cohen
articleprincipleReframing "Freemium" by charging the marketing department
16 March 2025Profit
Source excerpt
About A Smart BearFreemium means high costs, low conversion, and customer feedback dominated by the non-ideal customer. Treat it as a marketing expense to ensure ROI.
This is a limited feed-provided excerpt, not the full original work.
Apollo layer
What a founder can learn
Founder takeaway
Treat a free tier as a paid acquisition channel, not a default product model. Assign its support and infrastructure costs to marketing, then judge it by the qualified customers and paid revenue it produces.
Why it matters
Freemium can consume resources while attracting feedback from users who are unlikely to buy. Measuring it as marketing spend forces clearer ROI decisions and protects product priorities from being shaped by the wrong audience.
Put it to work
Calculate your free tier’s fully loaded monthly cost, free-to-paid conversion rate, and resulting acquisition cost. What usage limits or targeting changes would make its return competitive with your other growth channels?