We are developing a freemium business model and have planned some Premium features that users can buy. What are the main differences between these two types of monetization:
Are users more tempted to donate or to actually buy? As per past experiences users see a higher benefit when buying something directly rather than donating and then choosing a gift.
What are your thoughts on this?
Business Model Monetization Freemium Donations
I'm not a big fan of the donation model unless you are a non-profit or an individual (e.g. artist on kickstarter or something like that).
For a for profit company, it's best to have people buy since it reduces confusions and as you point out, a customer will see a higher benefit. I also think they will be more likely to buy more from you.
I don't have any concrete data on that but a donate model implies that you are not a real business who wants real customers.
You have to be crystal clear that you are in business to win customers and make money. Customers don't donate -- supporters donate. Customers tell you how to improve your product -- supporters feel good about getting a free gift and are not really invested in the products success.