Easy Trick that Made Zynga $1 Billion

18 replies
I can upon this article on Forbes..

Should You Give Away Your Product? - Forbes

...and it amazed me how those following points fit in perfectly in internet marketing.

Real Value: The free offering must solve real problems for customers. If not, then it is really a free trial. "You need to treat free users as you would paying customers," Koon said.

Marketing: Giving away a product essentially is a replacement for traditional marketing. Ivan said it easily would have cost YouSendIt more than $100 million to get its current user base. This would have been from aggressive spending on search engine marketing (SEM) and other paid channels.

"The cost of getting a user under the freemium model should be near zero," Koon said. "It also needs to be viral. This means a free user should lead to even more users and eventually paid users."

Conversion: The industry standard for free-to-paid is about 2%. This means you generally will need millions of users to get any critical mass with the business model.

YouSendIt has a conversion rate of 7.3%. Then again, this has taken a lot of work, such as experimentation, engagement with the user base and ongoing innovation.

Word of Mouth: This is key for success. To this end, YouSendIt uses the Net Promoter Score (NPS) to measure the enthusiasm for its offering. This asks users a simple question: Would you refer the service to your friends and colleagues?

A good NPS is over 40%. YouSendIt is around 68% to 69%, which is within the range of companies like Amazon.com (Nasdaq:AMZN), eBay (Nasdaq:EBAY) and Apple (Nasdaq:AAPL).

"To make the freemium model work, you need to have highly satisfied users and customers," Koon said. "And this must be a constant focus."
So, yea, like many others here have pointed out before, the key to succeed in the long term is by providing REAL VALUE to your customers in order to build a relationship with them.

The "big boys" seems to be following this routine. If that's not enough reason to convince everyone here, I don't know what will.
#give #product
  • Profile picture of the author mimi k
    Interesting to see the parallels with IM. It makes sense though, because there is nothing people love more than the word 'free'!
    {{ DiscussionBoard.errors[5373587].message }}
    • Profile picture of the author celente
      Originally Posted by mimi k View Post

      Interesting to see the parallels with IM. It makes sense though, because there is nothing people love more than the word 'free'!
      can bring them into yoru funnel..however you are attracting freebie seekers..

      You do want buyers who are warmed up and ready to buy more. But there is something about the word FREE, especially if it is like FREE BEER!
      {{ DiscussionBoard.errors[5392173].message }}
  • Profile picture of the author Makis77
    Users are not for free but content/product is, meaning that sharing content or products for free is like giving free advise to someone.
    That someone may come back to you or suggest you to others that will eventually bring revenue and build confidence for others to follow.
    Signature

    - Looking to install WordPress?
    - Do you have problems installing or editing a theme?
    - Is your WordPress version outdated and in need of an upgrade?

    Fix My WP
    can do all this for you for $35 per job!

    {{ DiscussionBoard.errors[5373593].message }}
  • Profile picture of the author YasirYar
    Yep, no doubt about it. Giving your product away for free (obviously a limited number) has a fantastic effect on business. At the end of the day, word of mouth will get you the most useful traffic as those people will actually be willing to buy. It's definitely worth a shot.
    Signature

    >>>Get your websites ACTUALLY ranked by checking these out: Quantum SEO Labs, Home Page Link Building & SERP Ability. Want to get rid of negative listings? Check out Reputation Enhancer.

    {{ DiscussionBoard.errors[5373614].message }}
  • Profile picture of the author yoangov
    Hmmm I like the Idea behind that.
    Espescially to treat paid and free customers equally.

    Thanks for sharing!

    Cheers,
    Yoangov
    {{ DiscussionBoard.errors[5373670].message }}
  • Profile picture of the author anthony2
    I agree with if you have software then giving someone limiting access
    or if you have a digitial product like an ebook then letting view a couple of
    chapters could workout well for increasing your sales conversions.
    Signature
    "I Leveled The Playing Field And Removed Every Roadblock
    To Helping You Make Maximum Profits In Minimum Time"
    Click Here Now To Find Out How!
    {{ DiscussionBoard.errors[5373684].message }}
  • Profile picture of the author Webpromotion
    To make a killing on IM, your product must serve a real purpose.

    Giving it for free is just a marketing model.

    Every time you work on your own project, step back and ask yourself--- would I tell my family and friends about my product if I was not involved with it.
    {{ DiscussionBoard.errors[5373762].message }}
  • Profile picture of the author Slyknight
    Originally Posted by Dash Evra;5373550
    So, yea, like many others here have pointed out before, [B

    the key to succeed in the long term is by providing REAL VALUE to your customers [/B]
    True. But, unfortunately most people are more focused on making a quick buck online in the short run rather than building a business.
    {{ DiscussionBoard.errors[5390090].message }}
  • Profile picture of the author Vlad Romanov
    This trick was around for quite a while now. Many online games follow this model and have incentives in place for players to purchase premium content. Heck even Microsoft Word now has a free limited edition with minor restrictions.
    Signature
    {{ DiscussionBoard.errors[5390223].message }}
    • Profile picture of the author Dash Evra
      Originally Posted by Vlad Romanov View Post

      This trick was around for quite a while now. Many online games follow this model and have incentives in place for players to purchase premium content. Heck even Microsoft Word now has a free limited edition with minor restrictions.
      Never said the concept was new. I just wanted to put emphasis on the fact that giving free valuable content to costumers will lead to long term profit - something most people here fail to practice.
      {{ DiscussionBoard.errors[5391077].message }}
  • Profile picture of the author adammaxum
    the problem I see with many IM related businesses is that they are based on the latest trends or fads. While they may generate profits short term, many of them simply won't last, and that may be fine. As long as the person responsible uses the money they've made to move onto bigger and better things, I see no problem with it.

    As far as giving away your product for free, sure. It's used all the time. Almost every free software download is accompanied by a 'trial term' that forces you to purchase it after so much time. Either that or you get the basic version, and need to pay to upgrade to get all the benefits. It's been around forever. Even this very forum uses the free strategy to an extent.
    {{ DiscussionBoard.errors[5390258].message }}
  • Profile picture of the author Chris Chicas
    I totally get the giving away free content part so word can spread quickly - this could go either way: If your product/content is crap then word will spread quickly about it also.

    Personally I don't really care if it's free or if I have to pay for something - as long as it delivers great value. Unfortunately some free stuff out there is on the lower end - yet many of the people putting it out there think that they are adding something of value which they are not.
    {{ DiscussionBoard.errors[5391159].message }}
  • Profile picture of the author yukon
    Banned
    I've been doing this for the last 5 years, it works great for driving very targeted traffic.

    http://www.warriorforum.com/adsense-...ml#post5252838

    BTW, it does work well for long term income.

    The trick is, the free product has to be good & something they would pay for, the paid product has to be awesome. It's better to work backwards when working on the product, first create an awesome product to sell, then simplify the paid product & make that a free version.

    Anyone that says freebie traffic won't buy, is doing it wrong.
    Signature
    Hi
    {{ DiscussionBoard.errors[5391465].message }}
  • Profile picture of the author ezmystic
    If the free content you get is not what you need at least it hasn't cost you anything and you can just dump it. If you give a lot away free, often people will pay to get the rest if it's good anyway
    {{ DiscussionBoard.errors[5391637].message }}
  • Profile picture of the author Osman_M
    Its nothing new. If you'd like start out building a list make sure to give something of real value to your prospects ahead so the relationship starts on the right foot.
    {{ DiscussionBoard.errors[5392293].message }}
  • Profile picture of the author KrisMac
    Not only give them something of great value for free but make it viral! ie: Have my great new software program absolutely free, oh and by the way if you tell 5 other people about this free software I will give you my $500 (software, course etc...) for free also.

    Spend 99% of your time creating genuine high value products and the other 1% on marketing and it will work for you.
    {{ DiscussionBoard.errors[5392328].message }}
  • Profile picture of the author AngelInvestor
    funny you mentioned Zynga - I was at their Dublin opening party (new offices) and kudos to them, everything was by the book - the whole event managed to be classy and relaxed at the same time. they are indeed true to this core value - the hosts had put a lot of effort to know as much as possible about their guests and potential investors in advance, and that won them a lot of goodwill - just like it works with customers.
    {{ DiscussionBoard.errors[5392353].message }}
  • Profile picture of the author ProScribe
    Getting things to go viral really is an art unto itself. It was interesting to see the 2% conversion rate for free to premium.
    {{ DiscussionBoard.errors[5392358].message }}

Trending Topics