Retargeter Blog

ReTargeting with a Freemium Model: Long Term ROI

The basic nature of ReTargeting has huge benefits for anyone who’s trying to retain customers and increase their ROI.By solely targeting the users who have been to your site, retargeting can help out any company that needs to retain customers to drive sales, such as companies with a freemium modeled product. With an optimized conversion funnel, these retained users will be more prone to convert.Additionally, ReTargeter’s ability to track click-through and view-through conversions can display the value of your campaign beyond what’s offered to you by your analytics suite.

With a freemium model, one of our clients utilized the power of retargeting to drive conversions over a month long cycle of retargeting.Being confident in its conversion funnels, our client focused 75% of its budget on driving traffic to an optimized landing page in hopes of getting users to give them a try.Since these users were people who previously checked out our client’s site, they’ve already had some interest in the product, and were very prone to trying out the free trial.Taking it a step forward, our client ran the rest of their retargeting budget toward bringing their free trial users to an optimized landing page, hoping that these engaged users loved the product so much that they’d actually pay for it.

So how did this campaign perform?  Beautifully.  To give you an example of the ROI, just last week:

  • We captured 44 email leads who signed up for the free trial, at a value of $7.16/lead
  • We drove 7 sales that week which added up to a 134% immediate ROI (not counting the email leads above)
  • Because the product is freemium with an ongoing subscription, the ROI scales linearly in the long term

The power of retargeting with an optimized conversion funnel can deliver huge benefits to any SMB with a freemium model.But what’s so special about this combination?How can these 2 things alone deliver such a huge ROI? Consider this:

  • If more people start using the free side of a freemium product, then there will be more people who will potentially convert to the premium side of the product
  • retargeting brings people interested in both sides of the freemium product back to their appropriate landing page
  • Optimized conversion funnels will increase your number of conversions on both sides of the freemium product

Using retargeting to feed retained users throughout your funnels increases sales in the short term.Keeping these users subscribed to your premium product, while continually adding more conversions every month, will have a tremendous impact on your ROI in the long term.

Leave a Comment

4 Comments

  • Great article. Freemium models make economic sense if the free users increase the value of the network or are able to make the marketing more viral. In either case, a free user gives you a repeated opportunity to upsell them into a paid plan. After all, the paid users are your bread and butter. ReTargeter is great for reaching out to those users as they leave your site.

    Any company, whether or not they’re using a freemium model, can benefit greatly with just a small increase in their conversion metrics. Retargeted advertising is the perfect way to get back in front of the users who are most likely to convert to a paid account.

  • This is all well and good, but how does ReTargeter perform when ROI becomes an immeasurable variable? In other words, when the product funnel collapses due to unforseen circumstances and twice as many freemiums are no required to deliver end results, who ends up paying for it on the bottom line?

    Clever article nonetheless.

  • Good question, Jagen. If the product funnel collapses, then a company should work on fixing this, as this has a lot to do with the user experience. Retaining customers for your freemium product is really only good if your product is good and if the user experience is positive. If your product needs to be refined more, then more work should be made toward making sure the product is highly lovable.