# 14 - Freemium Business Model Implementation

## Executive Summary

This document details the Package-based business model for the Fotospiel tenant app, combining free access with purchases of predefined packages. The model prioritizes user acquisition through a free test package while monetizing through value-driven upgrades. Key metrics: 5-10% conversion rate, ARPU €10-15, scalable to 100k+ users. See 15-packages-design.md for package details.

## Model Analysis

### Model A: Paid App (€4.99) with Free First Event
**Pros:**
- Higher paying user conversion (20-30% retention)
- Premium perception for professional users
- Stable revenue from app sales (70% net after store fees)
- No freeloader problem

**Cons:**
- Lower acquisition (lower than 5% download conversion)
- High churn if first event doesn't impress
- Slower scaling, higher marketing costs per install (€2-5)

### Model B: Free App with In-App Purchases (Recommended Base)
**Pros:**
- 10x more downloads, viral potential
- Low acquisition costs (€0.50-1 per install)
- Flexible pricing (starter €4.99, pro €9.99)
- Better App Store ranking for free apps

**Cons:**
- 80-95% freeloader rate
- Complex IAP setup and testing
- Requires strong onboarding to drive conversions

### Package-based Recommendation
**Core Strategy:** Free app with limited test package for first event, upgrades via package purchases (Einmalkäufe for Endkunden, Subscriptions for Reseller).

**Pricing Structure:** See 15-packages-design.md for Endkunden (pro Event: Free/Test 0€, Starter 19€, etc.) and Reseller (jährlich: S 149€, etc.).
- **Free Tier:** Test package (30 photos, 10 guests, 3 days gallery, 1 task, standard watermark)
- **Endkunden Packages:** Einmalkäufe pro Event with increasing limits/features.
- **Reseller Packages:** Annual subscriptions with event limits and branding options.

**Expected Metrics:**
- Downloads: 50k/year
- Conversion: 5-8% (2,500-4,000 paying users)
- ARPU: €12 (mix of one-time + recurring)
- Annual Revenue: €30,000-48,000 (after 30% store fees)

## User Acquisition Strategy

### App Store Optimization (ASO)
- **Keywords:** "Event Foto App", "Hochzeit Galerie", "Party Foto Sharing", "Event Planner kostenlos"
- **Screenshots:** 5-6 screens showing value (event creation, photo upload, QR sharing)
- **Description:** 4,000 chars emphasizing "Free start, upgrade anytime"
- **App Preview Video:** 30s demo of creating/sharing first event

### Marketing Channels
- **Paid Ads:** Facebook/Instagram targeting wedding planners (€1-2/install)
- **Organic:** Wedding forums, photographer communities, local event groups
- **Partnerships:** Affiliate program for event agencies (20% commission)
- **Content Marketing:** Blog posts "How to create digital photo galleries for events"

### Retention & Re-engagement
- **Push Notifications:** "Your event ends soon - extend for €2.99" (opt-in only)
- **Email Marketing:** Post-event surveys with upgrade offers
- **In-App Messaging:** Contextual upgrade prompts after value demonstration

## Conversion Optimization

### Onboarding Funnel
1. **Download → First Launch:** 90% completion target
2. **Onboarding Wizard → First Event:** 80% completion
3. **First Event Success → Upgrade Prompt:** 10% conversion
4. **Repeat Usage → Subscription:** 20% of one-time buyers

### A/B Testing Plan
- **CTA Text:** "Get Started Free" vs "Create First Event"
- **Pricing Display:** Static prices vs dynamic local currency
- **Upgrade Timing:** After first photo upload vs after event sharing
- **Tools:** Firebase Remote Config + RevenueCat Experiments

## Technical Requirements

### Frontend (React/Capacitor)
- **IAP Integration:** RevenueCat SDK for cross-platform purchases
- **State Management:** Context API for credits, React Query for API sync
- **Offline Support:** Capacitor Storage for temporary event data
- **Analytics:** Firebase for funnel tracking, RevenueCat for purchase events

### Backend API Extensions
- **Package Management:** `/api/v1/packages` and `/api/v1/tenant/packages` endpoints
- **Purchase Validation:** Webhook receiver from Stripe
- **Event Limiting:** Middleware checking credit balance before creation
- **Subscription Sync:** Real-time updates via WebSockets (optional)

### Database Schema Additions
See 15-packages-design.md for updated schema: `packages`, `event_packages`, `tenant_packages`, `package_purchases`.

## Risk Mitigation

### Store Compliance
- **No Paywalls Before Value:** First event creation always free
- **Clear Descriptions:** App Store screenshots show free tier capabilities
- **Receipt Validation:** All purchases server-side verified
- **Refund Policy:** 14-day money-back for subscriptions

### Technical Risks
- **IAP Failures:** Fallback to manual credit allocation via support
- **Sync Issues:** Offline-first approach, sync on reconnect
- **Store Rejections:** Beta testing with TestFlight/Internal Testing
- **Revenue Recognition:** Use RevenueCat for proper accounting

### Business Risks
- **Low Conversion:** Monthly A/B testing and user surveys
- **Churn:** Re-engagement campaigns for inactive users
- **Competition:** Regular competitor analysis and feature updates
- **Platform Changes:** Monitor Apple/Google policy updates

## Launch Timeline

### Phase 1: MVP (4 weeks)
- Week 1: RevenueCat integration, basic credit system
- Week 2: IAP store page, purchase flow
- Week 3: Backend endpoints, database schema
- Week 4: Testing, beta distribution

### Phase 2: Optimization (Ongoing)
- Month 1: A/B testing of upgrade prompts
- Month 2: Push notifications, email marketing
- Month 3: Subscription model introduction
- Quarterly: Feature updates based on user feedback

## Success Metrics

### Acquisition
- Downloads: 10k in first 3 months
- Cost per Install: less than €1.50
- App Store Rating: more than 4.5 stars

### Conversion
- Free → Paid: 5% within 30 days
- First Event → Upgrade: 15% conversion
- Average Order Value: €8-12

### Retention
- Day 1 Retention: more than 40%
- Day 7 Retention: more than 25%
- Monthly Active Users: 20% of downloads

### Revenue
- Month 1 Revenue: €1,000-2,000
- ARPU: €0.50-1.00 overall
- LTV more than  3x acquisition cost

This Freemium model balances user acquisition with sustainable revenue growth, leveraging the event-based nature of the app for recurring purchases while maintaining an accessible entry point.