Panera Bread’s Business Model Secret

Panera Bread’s Business Model Secret


The Freemium business model is sweeping the technology world.  The simplest explanation of the Freemium business model is giving away a lite version of the product at no charge.  In many freemium business models, approximately ten percent of the free users upgrade to a more robust paid version.  The free version is typically a low-risk or no-risk trial for the premium product.

However, the technology world did not invent the freemium model.  No one knows who did, but there are many examples of the freemium model at work outside technology business models.  For example:

Virtually all businesses can leverage a freemium-type business model.  Ideally, the free customers will use a low-cost or no-cost product.  However, this does not have to be a rigid standard.  Be creative.  Ask yourself, “What are the characteristics and behaviors of my best customers?  How could allowing them to use part of our offering push them closer to becoming a premium customer or how does the freemium customer enhance the experience for the premium customer.

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