Internet giants stepped into the market, Houston turned his sight on corporate users. After that, Dropbox holding a large share of the consumer cloud storage market. The quick expand of user create more chance that users will bring Dropbox to their workplace.
The referral hierarchy and accelerate the promotion of Dropbox. Secondly, Houston built an incentive strategy to stimulate the referral process Users benefit from getting more free storage and Houston get more customers. Free trial gives everyone a chance to try and experience the convenience and efficiency Dropbox brings to them. Dropbox was offering a product that people didn’t know that needed until they tried. According to Drew Houston, his goal was to get individuals to use and like it so much that they, in turn, got their employers to sign up as well. Firstly, Dropbox was applying the “Freemium Pricing Strategy” to acquire basic users. What was the strategy that Dropbox used for corporate/business customersĭescribe this strategy and its results. Low user conversion rate, loss of customers and make people always want use Dropbox for free will be hidden risk for Dropbox. The value of Dropbox may be overestimated. For venture capital investor, great volatility of future revenue means high risk. This will increase Dropbox operation cost by purchasing more servers and maintain them. Customer prefer to get more storage with recommend to friends and their friend will do the same thing to get free upgrade by doing the same thing. “Freemium Pricing” and incentivize mechanism bring some negative influence on Dropbox. Consumers may turned into other giant vendor such as Google, Apple and Amazon. The competition of cloud storage market is very intense, which makes Dropbox profitability less sustainable. What were the negative results or failures of this strategy, if any With huge potentials, Dropbox is valued at over 4 billion dollars. As well, in long-term, Dropbox builds brand image and cultivates customer habit. In short-term, “Freemium Pricing” speed up Dropbox user grew from 4 million to 200 million in four years and generate $400 million revenue by 2012. Even several internet giants began vying a piece of promising cloud storage market, Dropbox was still possessing the second big vendor in the market.
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