Marketing Your Business Why Free does Not Work

by David Ogden

Posted: 14 years ago 21 replies

INTERNET MARKETING

Many marketers suggest giving away something free when marketing you business online, but this can attract the wrong type of people. If you are selling a product or service which requires ongoing payments by customers you are better to be honest and inform them up front. I have seen many people suckered into a business and then finding out that they need to spend hundreds and sometimes thousands to purchase extra essential tools, leads and websites. this is bad for business and usually forms part of some get rich quick scam.

The other thing to remember if you are using an email campaign is free is a word often blocked by spam checkers so your messages will not get through.

If people cannot afford you product or service don't let them waste your time, it is better spent your energy nurturing customers who do have money, to be honest people who want to succeed will find the money. Some people will even hold a garage sale to start their business.

The stark fact is you cannot start any kind of business without money online is no different to offline. You need to put your money where your mouth is and yes it also means you have to work at it. It might take a minimum of six months before you get a return on your investment and longer to get into profit. Offline it takes years to get into profit and the costs are greater.

So now you see why free does not work.

#business #free #marketing #work

Dee Odus 14 years ago

Every products, online or offline, offer something for free. The "free" offering is not to attract cheap/rich customers, it is to give a taste of what else is in offer. Free test drive of any car from any garage, free food from restaurants so you get the idea of the type of delicious meals on offer, free 30 day trial of a software so you can enjoy the full features before committing yourself. FREE is the new business model. Without free offer you can't compete, online or offline. Apple is doing it with their software, Microsoft is doing it with all their software tools..It works!!!

Free eventually converts to paid, I read a story by Perry Marshal where he said he had a client on his free email list for many years, but then the prospect turned into a paying client and she ended up spending thousands in purchase.

Personally for me, the satisfaction that people are using my products, reading my email newsletter, watching my free videos is well worth all the effort. It's not all about the money, I LOVE helping people so they can keep all the free stuff as long it helps them.
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Will Edwards 14 years ago

I understand your point and people do need to be aware of the difference between freebie seekers and buyers - all lists aren't created equal for sure.

However:

1. Some business models do well by giving away free stuff
2. The words 'free' is not so much an obstacle to spam filters as you may think

Just my 2c

Will
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Paul Barrs 14 years ago

David,

A valid point of view, for sure - what say you then on the very low cost WSO style offer?

Is there really that much of a difference between someone who only looks for free and someone who looks for stuff under $10?

Do these "customers' not just start at the top end of the "funnel" - that's what it's all about really. Numbers in, numbers out.

Paul Barrs
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Andy Fletcher 14 years ago

If I offered you $10 for free, would you take it?

Does that mean you wouldn't be interested in $1,000?

Just because some of the people that sign up for a free off won't go on to be paying customers doesn't mean none of them will. Your job as a marketer is to set up effective systems to separate the two.
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- fluffythewondercat 14 years ago
  
  I'm afraid I don't understand your point. There's either a language barrier here, you're confused or you don't really understand marketing, because rejecting "free" out of hand is in my opinion extremely short-sighted.
  
  If you want to learn more, try reading Chris Anderson's book "Free", then come back and tell us how to use "free" to best advantage.
  
  fLufF
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huddlemarketing

Banned 14 years ago

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cashtree

14 years ago

You're really missing the boat on this. "freemium" is how I plan on selling lot of my software products, even if I get say a million people using the free version of my crap, who never plan on buying it, I still have a million people I can advertise my and other crap to via the software. That gets your foot in the door, that gets you know, where as software with no trial who cares about those? They might as well not even exist if they're not known.

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David Ogden

14 years ago

Originally Posted by cashtree

Ok you will have a million people using your software for free, and unless you offer them something else for free they will unsubscribe from your mailing list or blacklist your email address, now if you had charged $5 for the software you would have made $5M, I would rather have the money in my pocket. I know I can send out to say 10,000 mailing address and get may be 10 real opt-ins, so many people use junk/none existent contact info you may never be able to contact them, but if they pay for a product you will they will give you their contact details because they want your software.

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David Ogden

14 years ago

The problem is there are very few things that are free in life, but in business nothing is free there is always a catch if you are marketing by giving something for free sooner or later you are going to ask that person for money, but a lot of people will take your freebie and run.

I have used free and to be honest the type of person that comes in is not committed to doing business because they are not a stakeholder. I would rather honest and tell them upfront that working with me is going to cost $xx

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JohnMcCabe

14 years ago

Originally Posted by David Ogden

I have used free and to be honest the type of person that comes in is not committed to doing business because they are not a stakeholder. I would rather honest and tell them upfront that working with me is going to cost

David, it sounds like you and some of the others here may be talking about two different animals.

It sounds to me like you are talking about an ongoing service like consulting, and they are talking about products.

For products, the sneak peek, the taster, the test drive are all standard methods that have worked for longer than either of us have been around.

For services, you could waste a lot of billable hours doing stuff for free or on spec. But even there, the free seminar or other clearly defined 'taster' can be effective. As long as the prospects knew they were prospects and that they were going to be asked to buy something at the end, it's a good sorting tool.

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fluffythewondercat

14 years ago

Yes, there are what Seth Godin calls Opportunity Seekers. But so what?

Unless your offer is attracting *only* Opportunity Seekers, a savvy marketer can make money with the genuine prospects. Of course a savvy marketer would quickly discard any offer that didn't attract enough real prospects and keep at it until he had a winning offer

fLufF
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mikedarling

14 years ago

As an interesting aside to Andy's post:

If I offered you $10 for free, would you take it?

Does that mean you wouldn't be interested in $1,000?

Just because some of the people that sign up for a free off won't go on to be paying customers doesn't mean none of them will. Your job as a marketer is to set up effective systems to separate the two.

In 1999 I did a little offline marketing campaign to research what happens if you take the idea of "free" to an extreme. I spent 6 hours on the streets of downtown Denver trying to give away $100 for free. I was dressed professionally, and approached people reasonably (not raving and acting like a lunatic). I would try deviations of saying something like "Excuse me, could I interest you in $100 cash for free?" Now note, I never held cash out to any one or made it that easy or obvious, but at the same time never implied there was a catch. After spending most of the day, guess how many takers I had? NONE.

It's an interesting insight into the way most people think. First, we're skeptical by nature (why is some guy going to just give me $100?) But beyond that, people associate "value" to things ("you get what you pay for"). So in this example, "free" was simply unbelievable. The reality was that I had $300 in my pocket that I was prepared to "invest" into that day's research. Ended up costing me nothing...

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Thomas Prendergast 14 years ago

This may not totally relate to giving away free stuff to build a business, but it will give you some insight as to where many people are in their heads.

I did a similar experiment in San Diego trying to sell 1 ounce Silver dollars with a face value of $1 for $1 dollar and not one person would take the deal.

Mark Dice tries to sell $1100 one ounce gold coin...

Thomas Prendergast
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David Keith 14 years ago

how about this, what if i had a bunch of people on my list that were freebie seekers. does that mean they can have no value to my company. hell no.

how about this. what if i offered them another small free gift to bookmark my site using social bookmark sites. that would give me lots of backlinks and be of value to my company.

or how about facebook likes. again, they help my seo.

then there are cpa offers, which no one ever has to use a CC for and i can still make money.

or how about the pure affiliates that just write articles themselves and build a list. they have virtually no overhead and any sales they do make is pure profit.

sure, its a no brainer that you would like to have a bunch of people with spendable income on your list, but that does not mean you should avoid giving away a 10-15 page report that will take you just a few hours of time and give you benefits for several years.

your view is just very short sided and you have not taken much time to think about how you can use the power of the web to get something beneficial out of people.

you must create win win situations, and the only win for you does not have to come just by having someone buy your product.
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MatthewNeer 14 years ago

This is great advise.

I will argue however giving away free stuff is a great way to build a list.

At the same time, keeping your subscribers paying those monthly fees is a lot easier if you target people with lots of money to pay for it. Only makes sense
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rrm 14 years ago

Fact is, many people who later become customers are first drawn in by a free offer. My wife is an example. She is very hesitant to buy ANYTHING that she is not actively seeking to purchase. If she is "sort of" interested in a product, she might bite the free bait, but she will not buy first.

p.s. PLEASE, PLEASE Mark Dice... Please offer me a one ounce gold coin for 50 bucks or a Starbucks coffee!

Ron
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ShawnSells 14 years ago

Free can work in many niches and categories. But I do think in the over-saturated IM niches it's becoming less effective. I know people here who have built lists of almost entirely freebee subscribers. When they email them with offers the response rates and conversions rates are extremely low. They attribute it to how the subscribers were originally attracted.
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- WiiLoveSuccess 14 years ago
  
  All of you make great points about using "Free offers" as a means of marketing and gaining customers. My experience with it suggests these points be remembered to be successful and to make it work for you:
  
  1. The only time I expect to get something that is truly "FREE of obligation on my part" is to get a gift from a family member or friend for some occasion such as my birthday and I believe I am in a boat as large as the Titanic with most all of the passengers in agreement with me.
  2. Understand that potential customers/clients are leery about FREE OFFERS because they've come to know that "there is no such thing as a Free Lunch" so make it real clear what your "Free" really means.
  3. Use the Free Offer as a means of introducing yourself, your product/service and establish credibility and trust by giving them a "sample" of your offerings.
  4. Don't use "fine print" to spell out the details of the offering, but be forthright with your expectations of them - let them know what your offer is Free of and what it is NOT FREE of.
  5. Make it clear that your "FREE" means free of monetary outlay or investment of money, but that there is some expectation on their part to "earn" the right to receive your product/service at no cost. For example they may be required to provide you with 1 - 3 referrals (you're expecting them to introduce others to you), or they may have to review your website and complete a survey or post a review (you're expecting an investment of time). If the product is for Free but you expect them to pay shipping then tell them so up-front.
  6. DO NOT play the got-you game of saying they're going to get some item for free (usually a big-ticket item) only to discover once they've given their name and email address, and perhaps additional info, that they now have to subscribe to other offerings at a monthly cost. For example - 4 offerings from the next window, then 4 more from the next window, and finally 4 more from the next window, and then poof you've now committed yourself to $119.98 per month for things they probably don't really need.
  7. Don't "give away the farm" with the free offer. Give them the "sample" I mentioned earlier and then "make them the offer" to buy your product(s)/service(s) that will meet their needs.
  8. For those that take you up on your free offer and you've established a trusted relationship, then be sure to get referrals to their contacts that they believe could benefit also.
  
  These concepts have worked for me for the past 3 decades in a variety of businesses, one of which has been my online business. When done right I believe they will work for anyone in any business.
  
  Blessings,
  Ray Delworth
  
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Mike Anthony

14 years ago

Originally Posted by David Ogden

The stark fact is you cannot start any kind of business without money online is no different to offline. You need to put your money where your mouth is and yes it also means you have to work at it.

I get where you are coming from. I too have come to the conclusion that rather than mass free numbers I would rather have a good real prospect list. I would rather offer something for even $1 and be done with it than have to deal with all the free loaders.

Whats the difference? Huge to me. I know the person either has the use of a Paypal account or a working credit card. IF a few dollars makes you walk away then either my pitch wasn't very good or you were not my target.

Software trials are another beast. Sure you can try it for free but I get to take it back when it no longer functions and if you really liked it then I have created a sense of loss for you that might make you pony up and pay. I don't think that happens quite the same way for information products.

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stesnees 14 years ago

Not sure where I stand on this one.
I have just set up offline giving away free websites and charging for low cost hosting. People are interested in the offer but seem to baulk at the hosting charge, even though it is very low.
Not sure if I should scrap the hosting charge and just charge the same amount for the actual site itself or whether to give away completely free and rely on upsells, mobile etc.
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- David Ogden 14 years ago
  
  Well I could say Quod Erat Demonstrandum if my Greek is any good giving away a free website did not work
  
  Offline could be a harder nut to crack as peoples attitude harden and generally want to go around their business undisturbed and they don't know you from Adam Online, however people like to cut and run with anything that's free
  
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  David Ogden an Entrepreneur at Markethive which uses a suite of free marketing tools to promote his opportunity. Contact:- Telegram @davidogden
  
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Shaun OReilly 14 years ago

Giving away free stuff can be useful - online and offline -
if you know how to do it STRATEGICALLY.

Too many people make the mistake of "giving away the
farm" when they give stuff away for free. Wrong move!

Instead, look at what you have to sell and then work
backwards. Then decide what you can give away at the
front end to get people into your marketing funnel and
what you can give away to keep moving people through
your funnel...

Visitors -> Suspects -> Prospects -> Customers -> Repeat Customers

Free information can be used as an effective lure to
filter out those people who are best suited for your
offers.

If you don't use free at all, you limit the number of
people you get into your funnel and therefore limit
your income potential.

The key is to give away stuff that moves people
towards making multiple buying decisions and that
requires the strategic use of free information.

Dedicated to mutual success,

Shaun
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