Cross posted from www.VirtualBreadwinner.com
The value of F R E E ?
Posted 26th May 2009 at 12:56 PM by jwhagarty
Tags free, perceived value, perry marshall
Hi everyone.
I've been reading through some of Perry Marshall's newsletters and I found an interesting case study that causes me to question the value of FREE. In today's world we are constantly bombarded with all sorts of advertisements promising this that and the other thing for FREE.
FREE may or may not have value to you as a consumer.
FREE may or may not have value to you as a business owner or marketer.
FREE is commonly used as a HOOK to get you interested in whatever is being offered, but it also can raise some internal alarms. Have you ever heard the expression "Good things aren't free, and free things aren't good?" Or do you subscribe to the "Best things in life are free!" theory?
Have you ever sampled one of those little nibblys offered by a vendor at the market or the mall? And then gone on to purchase the actual product? What about those FREE samples of wine offered at the wine tasting? How about when you are at the ice cream parlor and you ask for a FREE sample of a certain flavor? Or when the Chinese place in the food court offers you a FREE sample? Does it make you more or less likely to purchase from that place?
I did a brief work stint selling mobile phones out of a mall kiosk, and yelling out FREE PHONES was about the worst way for us to get business. It was also the most common way we got business.
Years before that when I was managing a retail store, there was a peddler that came in offering me a FREE PHONE if I just signed up for their service. Well you and I know darn well there is no such thing as a FREE phone. Kind of like the expression there is no such thing as a FREE lunch right?
Which do you respond to as a consumer?
Do you like FREE samples, or do you AVOID them?
If I hold an informational webinar once a week, are you more likely to attend if its FREE, or if I charge a nominal fee?
What if, instead of hosting it for free, I sold a limited number of seats for $20 each? I present the same information, but it is now in limited distribution. Is the webinar now More or Less valuable to you? Are you More or Less likely to attend?
One of the problems with FREE is people think there is always a CATCH right?
If I host a FREE webinar or seminar you probably think I am going to try to SELL you something!
If I CHARGE you for the same information, you will probably get more out of it for two reasons. One, you will have a different mindset going into it. You will be more open minded, instead of looking for the CATCH. Two, you will be more likely to apply what you've learned, because you will want to Get Your Money's Worth right?
If I had a great system for, say, making money online, how much would it be worth to you?
If I gave it away for FREE you might be willing to take a look on the one hand. On the other hand you might think - if this system is so great, why is he giving it away for FREE? What's the CATCH?
If I charged you $100, or $1000, or $10,000 for the same information, would you be more or less likely to purchase the information? Would you be more or less likely to apply the information? Would you be more open minded or would you still be looking for the CATCH?
Ultimately, the value of your proposition is what your customer perceives it to be. Something that is FREE may have high perceived value, or it may have no value at all.
Before you offer your product or service for FREE, decide what would serve you and your customer best. Before you choose the FREE option over the PAID option, decide what makes the most sense.
There is no value, except what is perceived in your customer's mind.
There is no bad service, good service, or better service.
There is only the perception.
Perception is reality.
When you understand this concept, and use it to your advantage, it will make a huge difference in your life and in your business.
Have fun, and good luck!
I've been reading through some of Perry Marshall's newsletters and I found an interesting case study that causes me to question the value of FREE. In today's world we are constantly bombarded with all sorts of advertisements promising this that and the other thing for FREE.
FREE may or may not have value to you as a consumer.
FREE may or may not have value to you as a business owner or marketer.
FREE is commonly used as a HOOK to get you interested in whatever is being offered, but it also can raise some internal alarms. Have you ever heard the expression "Good things aren't free, and free things aren't good?" Or do you subscribe to the "Best things in life are free!" theory?
Have you ever sampled one of those little nibblys offered by a vendor at the market or the mall? And then gone on to purchase the actual product? What about those FREE samples of wine offered at the wine tasting? How about when you are at the ice cream parlor and you ask for a FREE sample of a certain flavor? Or when the Chinese place in the food court offers you a FREE sample? Does it make you more or less likely to purchase from that place?
I did a brief work stint selling mobile phones out of a mall kiosk, and yelling out FREE PHONES was about the worst way for us to get business. It was also the most common way we got business.
Years before that when I was managing a retail store, there was a peddler that came in offering me a FREE PHONE if I just signed up for their service. Well you and I know darn well there is no such thing as a FREE phone. Kind of like the expression there is no such thing as a FREE lunch right?
Which do you respond to as a consumer?
Do you like FREE samples, or do you AVOID them?
If I hold an informational webinar once a week, are you more likely to attend if its FREE, or if I charge a nominal fee?
What if, instead of hosting it for free, I sold a limited number of seats for $20 each? I present the same information, but it is now in limited distribution. Is the webinar now More or Less valuable to you? Are you More or Less likely to attend?
One of the problems with FREE is people think there is always a CATCH right?
If I host a FREE webinar or seminar you probably think I am going to try to SELL you something!
If I CHARGE you for the same information, you will probably get more out of it for two reasons. One, you will have a different mindset going into it. You will be more open minded, instead of looking for the CATCH. Two, you will be more likely to apply what you've learned, because you will want to Get Your Money's Worth right?
If I had a great system for, say, making money online, how much would it be worth to you?
If I gave it away for FREE you might be willing to take a look on the one hand. On the other hand you might think - if this system is so great, why is he giving it away for FREE? What's the CATCH?
If I charged you $100, or $1000, or $10,000 for the same information, would you be more or less likely to purchase the information? Would you be more or less likely to apply the information? Would you be more open minded or would you still be looking for the CATCH?
Ultimately, the value of your proposition is what your customer perceives it to be. Something that is FREE may have high perceived value, or it may have no value at all.
Before you offer your product or service for FREE, decide what would serve you and your customer best. Before you choose the FREE option over the PAID option, decide what makes the most sense.
There is no value, except what is perceived in your customer's mind.
There is no bad service, good service, or better service.
There is only the perception.
Perception is reality.
When you understand this concept, and use it to your advantage, it will make a huge difference in your life and in your business.
Have fun, and good luck!
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