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Crowdsourced Customer Acquisition: A Conceptual Framework for Freemium and Propositions for Future Research
Norwegian University of Science and Technology, Faculty of Social Sciences and Technology Management, Department of Industrial Economics and Technology Management.
2011 (English)MasteroppgaveStudent thesis
Abstract [en]

Freemium has grown tremendously in use and importance the last years, but research is still in its infancy. This thesis explore how companies that use freemium acquire customers through their existing users and customers. This thesis posit that the primary value of free users in freemium derive from making this acquisition process both more efficient and more effective, allowing a company to grow rapidly at a low cost. The customer acquisition process was explored through qualitative interviews with high-level employees and investors in companies ranging from the Fortune 100 to failed businesses, and the research process was firmly based in grounded theory. Based on this process we proposed a conceptual framework — termed crowdsourced customer acquisition — which describe the customer acquisition process in freemium. Crowdsourced customer acquisition entails giving some consumers access to a valuable service for free into perpetuity. This causes these users to become loyal and engaged, and through their engagement — most importantly word-of-mouth — other consumers become interested. By making the choice to try the service a "no-brainer" for these consumers the company acquire new users. These new users, in turn, can both bring in new users and be converted to paying customers. Learning and adapting based on these events the company can improve future user acquisition and conversion by increasing their efficiency and effectiveness. In addition to this acquisition process, and because freemium is at a very early stage in research, we also proposed several avenues of further research based in the proposed acquisition process. The primary managerial implication of this research is that is enable practitioners to reason about their freemium model to a much larger degree, e.g. in terms of formulating, understanding, analyzing, and sharing the company’s customer acquisition model. The proposed framework can thereby be elemental in the process of designing a viable business around freemium. The primary theoretical implication of this research is that it commence a deeper look into freemium itself, an area which is currently not well understood from a theoretical standpoint. It brings together several avenues of research to give a coherent view of one facet of freemium; thereby indicating that several of the research findings for traditional products and services also yield for freemium-based services.

Place, publisher, year, edition, pages
Institutt for industriell økonomi og teknologiledelse , 2011. , 87 p.
Keyword [no]
ntnudaim:5922, MIENTRE NTNUs Entreprenørskole,
URN: urn:nbn:no:ntnu:diva-15062Local ID: ntnudaim:5922OAI: diva2:473578
Available from: 2012-01-06 Created: 2012-01-06

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