From freemium to premium: The conversion capability of digital nudges

Abstract

Companies attempt to sway consumers’ decisions at various points in the buying process. Their so-called “nudg- es” are one of the effective techniques that they use to influence the process. Nudges subtly guide the decision maker towards a predetermined outcome while preserving the freedom of choice. The aim of this study is to classify digital nudges and investigate their effect on conversion. During the investigation, the following approach was used to analyse web analytics data from an SaaS provider. First, conversion data were obtained and com-pared with those from the year before and the year after the use of digital nudges. Then, in the two periods, the number of upgrades – from the freemium to the premium package – was assessed, taking into account whether the number of upgrades came directly from clicking on a nudge. Digital nudges help to improve conversion rates while maintaining custom- ers’ “normal” proclivity for page leaving. Loss aversion nudges were found to have the greatest tendency to convert throughout the study.