| Online service is the behavior and process of interaction between service providers and users through the Internet,for the purpose of creating or gaining value.In order to provide online services for users continuously,service providers must benefit from the process of operating online services,and it is an important concern of all service providers to choose an appropriate operation strategy.Some service providers attract users through advertising strategies,which is widely used in traditional tangible goods.However,online services are intangible products,which are different from tangible goods,and more and more service providers begin to choose free trial strategies.Free trial strategy is the operation strategy that provides limited free trial to users,for attracting users,and it can be divided into time-limited free trial strategy(called"free trial strategy")and version-limited free trial strategy(called "freemium").Through free trial,the user can reduce the uncertainty about the online service.Thus,the user has more possibility to buy the service,and the service provider can get more profit.Meanwhile,for some online service with network effect,the platform often provides its online service in two parts:1)basic service,which is free of charge;and 2)value-added service,which levies a service charge,which is called Freemium.The service provider can attract more free users by providing them basic service free of charge,while the free trial strategy is applied to convert free users into paying users.Based on users' learninig effect,this paper analyzes the free trial strategy of online service,by building a optimization model and numerical experiments.The main research results are as follows:(1)When upgrade is not considered,there is an upper limit for the optimal length of free trial,and the users' learning ability and the marginal cost of online service have influence on the optimal decisions of free trial strategy.(2)When upgrade is considered,a strategic service provider should offer a shorter length of free trial.Meanwhile,the price for old users remains unchanged,and the price for new users is not higher than that for old users.However,a myopic provider should offer a longer length of free trial,and raise the prices for both old and new users.(3)When the online service exhibits network effect,the free trial strategy is applicable only when the increment of the users' net utility is sufficiently high.Meanwhile,the optimal decision depends on the intensity of network effect and the marginal cost of value-added service.The innovations of this paper are as follows:(1)This paper reveals the relationship between free trial strategy and users'purchase decision.Based on the users' learning effect,this paper describes the principle of free trial affecting users' utility,and analyses the changing rule of users'utility before and after free trial.Furthermore,this paper expounds the influence of free trial strategy on users' purchase decision,and reveals the internal relationship,which provides theoretical reference for relevant research.(2)This paper studies the free trial strategy in the case of online service upgrade.By building a two-stage model,the optimal free trial strategy for strategic and myopic service providers is obtained.This paper not only enriches the existing research literature about free trial,but also provides a reference for service providers to adjust the free trial strategy after upgrading.(3)This paper analyses the free trial strategy under the freemium,and puts forward the suggestion to solves the problem of converting free users into paying users,which is providing free trial of value-added services to free users.This paper develops a new idea of research about free trial,and provides a practical and effective solution for service providers.Finally,when the internal characteristic or external environment changes,this paper also provides decision-making and basis for service providers to adjust their strategies,and provides a reference for service providers' practice. |
PDF Full Text Request