Microsoft is slowly moving away from a strictly premium approach and investigating the benefits of a freemium model, which it refers to as a more "efficient" way to market.
Speaking at the Microsoft Convergence conference this week, Microsoft's chief marketing officer Chris Capossela described the four parts of the company's marketing strategies, which include: acquire, engage, enlist, and monetize, reported .
The process of acquiring customers is where the "free" part plays a major role: offering a , or giving away to certain users for a year after launch, for example.
Engaging means using one product in its ecosystem to promote others.
"If you use Cortana, you’re actually becoming a Bing user," Capossela explained.
To illustrate his point, Capossela brought up a chart showing off the way Google and Apple use marketing to sell one product, which ultimately sells them all.
"If you look what Apple advertises on TV, at least in the US, it’s all iPhone and iPad, and yet you see all the lines that connect their ecosystem," said Caposella. "So they can focus their marketing dollars on a very small number of things, be very disciplined, but because they’ve engineered their things to work together, one product naturally leads to the next product without any marketing at all."
Capossela praised this as, "Very efficient marketing, to build your marketing into your products."
The last two steps in its marketing strategy are where the money starts to come in. Enlisting users means finding a way to retain the fans who were originally engaged with the product. Monetizing means working out which of those loyal fans will actually pay for special subscription-only services and other exclusive features that the free versions don't offer.
The key to all this is building an ecosystem, according to Capossela, who notes the way Apple and Google have successfully built their own.
We've seen Microsoft's efforts to do this too, most recently during its press briefing at the start of the year, where Microsoft demonstrated across several compatible devices, including desktops and mobile.
Microsoft has spoken about its interest in freemium business strategies in the past, but with the approaching launch of Windows 10 and other Microsoft announcements this year, this talk from Capossela is one of the first times the company has been able to point to several of its own examples.