From Freemium to Premium App Services: The Expectation Confirmation Model and Two-Factor Theory

Shu-Chen Chang, Yi-Feng Lin, Yu-Ping Chiu

Abstract


The freemium strategy is a widely adopted model in the mobile app industry, offering users free access to basic features while enticing them to pay for premium content. Successfully navigating the boundary between these two app types is crucial for developers. This study aimed to examine the impact of perceived values on satisfaction, dissatisfaction, and the intention to pay in utilitarian apps, drawing on the two-factor theory and the expectation confirmation model. Additionally, the study proposed that hygiene factors should be integrated into freemium apps, reserving motivating factors for premium apps. This study used an online survey to collect 552 participants and analyzed by structural equation modeling. The empirical model provided insights into the fundamental determinants of motivating factors transitioning from freemium to premium apps. Results indicated that social and emotional values positively influence satisfaction, with satisfaction potentially mediating purchase intention. Furthermore, functional value reduces dissatisfaction and increases purchase intention. This study distinguished social and emotional values as motivational factors and functional values as hygiene factors. The findings offered valuable guidance to software companies for developing useful and profitable apps.

 

DOI: https://doi.org/10.54663/2182-9306.2023.v11.n21.112-131


Keywords


Freemium; Expectation Confirmation Model; Two-Factor Theory; Perceived values; Intention to Pay

Full Text:

PDF

References


Akdim, K., Casaló, L. V., & Flavián, C. (2022). The role of utilitarian and hedonic aspects in the continuance intention to use social mobile apps. Journal of Retailing and Consumer Services, 66, 102888.

Albayrak, T., Rosario González-Rodríguez, M., Caber, M., & Karasakal, S. (2023). The use of mobile applications for travel booking: impacts of application quality and brand trust. Journal of Vacation Marketing, 29(1), 3-21.

Aldiabat, K., Rashid, A., Talafha, H., & Karajeh, A. (2018). The extent of smartphones users to adopt the use of cloud storage. Journal of Computer Science, 14(12), 1588-1598.

Almeida, R. P., Proença, J. F., & Ferreira, F. N. H. (2021). Value Co-Creation and Sustainability: A systematic literature review. International Journal of Marketing, Communication and New Media(9), 104-125.

Ashfaq, M., Yun, J., Yu, S., & Loureiro, S. M. C. (2020). I, Chatbot: Modeling the determinants of users’ satisfaction and continuance intention of AI-powered service agents. Telematics and Informatics, 54, 101473. doi:10.1016/j.tele.2020.101473

Ayundyayasti, P., & Ciptaningtias, A. F. (2022). Evaluating Perceived Service Quality, Perceived Playfulness, and Gratification towards User’s Attitude of Mobile Instant Messaging Application. The Winners, 23(1), 19-24.

Bapna, R., Ramaprasad, J., & Umyarov, A. (2018). Monetizing freemium communities: Does paying for premium increase social engagement? MIS Quarterly: Management Information Systems, 42(3), 719-735.

Baumel, A. (2023). Digital Tools in the Service of Peer and Social Support for Perinatal Mental Health. Current Psychiatry Reports, 1-6.

Bhattacherjee, A. (2001). Understanding information systems continuance: An expectation-confirmation model. MIS quarterly, 25(3), 351-370.

Chen, C.-C., & Chiu, Y.-P. (2021). Advertising content and online engagement on social media during the covid-19 epidemic in Taiwan. Journal of Marketing Communications, 29(3), 251-269.

Chen, H., & Chen, H. (2020). Understanding the relationship between online self-image expression and purchase intention in SNS games: A moderated mediation investigation. Computers in Human Behavior, 112(5), 106-477.

Chiu, W., Cho, H., & Chi, C. G. (2021). Consumers' continuance intention to use fitness and health apps: an integration of the expectation–confirmation model and investment model. Information Technology & People, 34(3), 978-998. doi:10.1108/ITP-09-2019-0463

Clarke, I. (2008). Emerging value propositions for m-commerce. Journal of Business Strategies, 25(2), 41-57.

Credé, M., Chernyshenko, O. S., Bagraim, J., & Sully, M. (2009). Contextual performance and the job satisfaction–dissatisfaction distinction: Examining artifacts and utility. Human Performance, 22(3), 246-272.

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, 18(1), 39-50.

Gamberini, L., Pluchino, P., Nenna, F., Santus, V., Zordan, F., Spagnolli, A., . . . Campagnaro, V. (2023). Accessible and Inclusive Mobile Application for Social Support and m-Health in Forced Isolation: SAFE TALK. Paper presented at the International Conference on Human-Computer Interaction.

Hagen, A. N., & Lüders, M. (2017). Social streaming? Navigating music as personal and social. Convergence, 23(6), 643-659.

Hamari, J., Hanner, N., & Koivisto, J. (2020). Why pay premium in freemium services?" A study on perceived value, continued use and purchase intentions in free-to-play games. International Journal of Information Management, 51(4), 102040.

Herzberg, F. (1974). Motivation-hygiene profiles: Pinpointing what ails the organization. Organizational Dynamics, 3(2), 18–29.

Hsu, C.-L., & Lin, J. C.-C. (2015). What drives purchase intention for paid mobile apps?–An expectation confirmation model with perceived value. Electronic Commerce Research and Applications, 14(1), 46-57.

Hsu, C.-L., & Lin, J. C.-C. (2020). Examining Social Networking O2O Apps User Loyalty. Journal of Computer Information Systems, 60(5), 459-467. doi:10.1080/08874417.2018.1535261

Hu, L. t., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1-55. doi:10.1080/10705519909540118

Huang, S.-Y., Yang, M. M., & Chen, C.-H. (2018). When Do Motivational Factors Lead to Negative User Experience on Social Networking Applications? Australasian Journal of Information Systems, 22, 1-30. doi:10.3127/ajis.v22i0.1533

Jang, Y., & Park, E. (2021). Satisfied or not: user experience of mobile augmented reality in using natural language processing techniques on review comments. Virtual Reality, 26, 839-848. doi:10.1007/s10055-021-00599-y

Kim, H.-W., Gupta, S., & Koh, J. (2011). Investigating the intention to purchase digital items in social networking communities: A customer value perspective. Information & Management, 48(6), 228-234.

Kim, J., Lee, J., & Zo, H. (2018). Toward sustainable freemium software: The roles of user satisfaction and use context. Journal of Electronic Commerce Research, 19(3), 201-222.

Kim, M., & Lee, S.-M. (2023). Unpacking the Drivers of Dissatisfaction and Satisfaction in a Fitness Mobile Application. Behavioral Sciences, 13(9), 782.

Kumar, K. A., & Natarajan, S. (2020). An extension of the Expectation Confirmation Model (ECM) to study continuance behavior in using e-Health services. Innovative Marketing, 16(2), 15.

Lee, B., Lee, C., Choi, I., & Kim, J. (2022). Analyzing determinants of job satisfaction based on two-factor theory. Sustainability, 14(19), 12557.

Lee, J. M., & Kim, J. K. (2023). Effects of service quality of airline mobile application and individual characteristics on user satisfaction and intention to reuse. International Journal of Mobile Communications, 21(1), 134-157.

Li, J., Liu, X., Ma, L., & Zhang, W. (2019). Users’ intention to continue using social fitness-tracking apps: expectation confirmation theory and social comparison theory perspective. Informatics for Health and Social Care, 44(3), 298-312. doi:10.1080/17538157.2018.1434179

Liang, T.-P., Ho, Y.-T., Li, Y.-W., & Turban, E. (2011). What drives social commerce: The role of social support and relationship quality. International journal of electronic commerce, 16(2), 69-90.

Lin, P. M., Au, W. C. W., & Baum, T. (2023). Service quality of online food delivery mobile application: an examination of the spillover effects of mobile app satisfaction. International Journal of Contemporary Hospitality Management, ahead-of-print, 1-21.

Lu, J., Liu, C., & Wei, J. (2017). How important are enjoyment and mobility for mobile applications? Journal of Computer Information Systems, 57(1), 1-12.

Luarn, P., Huang, P., Chiu, Y.-P., & Chen, I.-J. (2016). Motivations to engage in word-of-mouth behavior on social network sites. Information development, 32(4), 1253-1265.

Mahfuzra, H., Hidayanto, A. N., Hapsari, I. C., & Utari, P. (2019). What drives the intention to repurchase digital items in digital games? An integration of uses and gratifications theory and the expectation-confirmation model. International Journal of Business Information Systems, 30(3), 253-276.

Maqableh, M., Abuhashesh, M., Dahabiyeh, L., Nawayseh, M., & Masadeh, R. (2021). The effect of Facebook users’ satisfaction and trust on stickiness: the role of perceived values. International Journal of Data and Network Science, 5(3), 245-256.

Mathwick, C., Malhotra, N., & Rigdon, E. (2001). Experiential value: conceptualization, measurement and application in the catalog and Internet shopping environment. Journal of retailing, 77(1), 39-56.

Mäntymäki, M., Islam, A. N., & Benbasat, I. (2020). What drives subscribing to premium in freemium services? A consumer value‐based view of differences between upgrading to and staying with premium. Information Systems Journal, 30(2), 295-333.

Moon, J.-W., & Kim, Y.-G. (2001). Extending the TAM for a World-Wide-Web context. Information & Management, 38(4), 217-230. doi:https://doi.org/10.1016/S0378-7206(00)00061-6

Morris, J. W., & Powers, D. (2015). Control, curation and musical experience in streaming music services. Creative Industries Journal, 8(2), 106-122.

Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of marketing research, 17(4), 460-469.

Ong, C.-S., Chang, S.-C., & Lee, S.-M. (2013). Website satisfaction dimensions: factors between satisfaction and dissatisfaction. Information development, 29(4), 299-308.

Osei-Frimpong, K., McLean, G., Islam, N., & Otoo, B. A. (2022). What drives me there? The interplay of socio-psychological gratification and consumer values in social media brand engagement. Journal of Business Research, 146, 288-307.

Pang, S., Bao, P., Hao, W., Kim, J., & Gu, W. (2020). Knowledge sharing platforms: An empirical study of the factors affecting continued use intention. Sustainability, 12(6), 2341.

Phuong, D., Ngoc, N., Trang, D., & Thi, T. (2018). Repurchase Intention: The Effect of Service Quality, System Quality, Information Quality, and Customer Satisfaction as Mediating Role: A PLS Approach of M-Commerce Ride Hailing Service in Vietnam. Marketing and Branding Research, 5(2), 78-91. doi:10.19237/MBR.2018.02.01

Rahi, S., & Abd. Ghani, M. (2019). Integration of expectation confirmation theory and self-determination theory in internet banking continuance intention. Journal of Science and Technology Policy Management, 10(3), 533-550.

Ray, A., Bala, P. K., & Dwivedi, Y. K. (2020). Exploring values affecting e-Learning adoption from the user-generated-content: A consumption-value-theory perspective. Journal of Strategic Marketing, 29(5), 430-452.

Sciglimpaglia, D., & Raafat, F. (2020). Freemium marketing: use of demand-side research in market segmentation strategy. Journal of Strategic Marketing, 28, 1-24.

Singh, S. (2020). An integrated model combining ECM and UTAUT to explain users’ post-adoption behaviour towards mobile payment systems. Australasian Journal of Information Systems, 24, 1-27.

Strahilevitz, M., & Myers, J. G. (1998). Donations to charity as purchase incentives: How well they work may depend on what you are trying to sell. Journal of consumer research, 24(4), 434-446.

Sweeney, J. C., & Soutar, G. N. (2001). Consumer perceived value: The development of a multiple item scale. Journal of retailing, 77(2), 203-220.

Tam, C., Santos, D., & Oliveira, T. (2020). Exploring the influential factors of continuance intention to use mobile Apps: Extending the expectation confirmation model. Information Systems Frontiers, 22(1), 243-257.

Trivedi, J. P., & Trivedi, H. (2018). Investigating the Factors That Make a Fashion App Successful: The Moderating Role of Personalization. Journal of Internet Commerce, 17(2), 170-187. doi:10.1080/15332861.2018.1433908

Wang, J., Xu, C., & Liu, W. (2022). Understanding the adoption of mobile social payment: from the cognitive behavioural perspective. International Journal of Mobile Communications, 20(4), 483-506.

Wang, L., Gao, Y., Yan, J., & Qin, J. (2020). From freemium to premium: the roles of consumption values and game affordance. Information Technology & People, 34(1), 297-317.

Wang, X., Yu, Y., Zhu, Z., & Zheng, J. (2022). Visiting intentions toward theme parks: do short video content and tourists’ perceived playfulness on TikTok matter? Sustainability, 14(19), 12206.

Wu, I.-L., Chiu, M.-L., & Chen, K.-W. (2020). Defining the determinants of online impulse buying through a shopping process of integrating perceived risk, expectation-confirmation model, and flow theory issues. International Journal of Information Management, 52, 102099. doi:10.1016/j.ijinfomgt.2020.102099

Wu, J., & Lu, X. (2013). Effects of extrinsic and intrinsic motivators on using utilitarian, hedonic, and dual-purposed information systems: A meta-analysis. Journal of the Association for Information Systems, 14(3), 154-191.

Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence. Journal of marketing, 52(3), 2-22.

Zhang, J., Luo, B., & Cao, F. (2019). The antecedent and consequence of users' satisfaction and dissatisfaction with information seeking in online health communities. Proceedings of the Association for Information Science and Technology, 56(1), 836-837.

Zhang, P., & von Dran, G. M. (2000). Satisfiers and dissatisfiers: A two-factor model for website design and evaluation. Journal of the American Society for Information Science, 51(14), 1253-1268.

Zheng, L. (2023). How to make users fall in love with a mobile application: A moderated-mediation analysis of perceived value and (brand) love. Information Technology & People.

Zheng, Q., & Liu, L. (2019). What Drives Female Players’ Continuance Intention to Play Mobile Games? The Role of Aesthetic and Narrative Design Factors. Paper presented at the International Conference on Human-Computer Interaction, Florida, USA.


Refbacks

  • There are currently no refbacks.


Copyright (c) 2024 Shu-Chen Chang, Yu-Ping Chiu

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

International Journal of Marketing, Communication and New Media

ISSN: 2182-9306

DOI: 10.54663/2182-9306

Qualis Periódicos - CAPES: B2

REBIB: Q2


Indexing:

Web of Science - Emerging Sources Citation Index - Clarivate Analytics

Journal Citation Reports (JCR) 2021

Crossref

QUALIS CAPESGOOGLE SCHOLAR - LATINDEX - REDIB - RCAAP - OAJI - DRJI - MIAR - LIVRE - ERIH PLUS - INDEX COPERNICUS -