The problem with FREE
April 21st, 2008
Free will have people coming out of the woodwork. Free gets people’s attention. Free stops people in their tracks. And the thing is, no matter what it is, if it’s free, people will take one of those, please. Case in point, I was participating in a 5K run recently and at the tent after the race was the usual water, bananas and sports drinks. Oh, and two huge boxes that everyone was grabbing these plastic pouches from. So, of course, I wanted one, too. What was in the pouch? Some sort of tablet that you put in your washing machine to make it smell better. I dunno. I don’t think my washing machine stinks, but hey, it was free, so I took one. Some people took three, even.
But when it comes to creating any kind of program, movement or gathering of people around your brand, if you build it on Free, you’re setting the stage for disaster. For example, “Sign up for our ambassador program and receive two free coupons for a free meal!” Or, “Join our Brand X Club and get a free pair of X!”
Disaster, I tell ya.
We see it over and over and over again. Why disaster? Because just like the donkey, if you dangle that free carrot, it will do the minimal amount of work it has to do to get its prize. And then it’s done. At least until you dangle another carrot. Make sense? There are HUGE message boards solely dedicated to how to get free stuff. And many of your word of mouth companies and programs are in those posts. People are actually sharing with one another what the minimal amount of work they have to do in order to get something free from you – and then they’re gone. No loyalty. No thank yous. Gone.
So how should you use free? As an unexpected reward. I’ve posed the question before, but it bears repeating – would you rather have 20,000 people join your community to get free stuff – and then have the majority of them go dormant, or have 5,000 people join your movement because they believe in you and want to be there?
Free should be used as a random act of kindness. And if you do try to build something on free, then make sure you put up enough barriers to make sure people are joining for the right reasons. Because free can sabotage everything you try to do right out of the gate.
Yes, free is powerful, but free can bite you in the ass, too. So handle free with care.
Other posts by Spike.
Cara Keithley says:
Spike,
I love your posts. In fact, I look forward to your posts enough to check this site a few times a day. Why? Because they make me think…sometimes about things that are simple, basic questions.
So, today my take away thought is “what random acts of kindness can I offer to our customers?” This seems simple, but for a quasi-government agency it gets tricky. Thank you for continually challenging me to think outside the normal box…
April 21st, 2008 at 5:34 amSpike says:
Cara,
You are far, far too kind. But thank you for your words - they are much appreciated. And thank you not only for reading, but for commenting as well.
To answer you question, sometimes the greatest reward we can give our customers is a call or handwritten letter that simply and personally says, “thank you.”
April 21st, 2008 at 5:41 amGary Sherman says:
Good points Spike.
Our marketing team fell into a similar trap recently - giving away some software if you joined our forum. People joined, got their free software, and that’s the last we’ve typically heard from them.
As Cara said - thanks for the inspiration to keep challenging ourselves.
Rock on.
April 21st, 2008 at 6:17 amPatrick says:
Free is indeed a tricky and is often a deceptive tactic. When a business person provides a free hour of consultation or devotes time to make a presentation to a business or networking group it is not “free.” I’ll give an hour of my time, provide free content in the form of blogs post or speak for free. In doing so I am giving up some “productivity” or rather paying hours in hopes advertising myself either directly through obvious marketing efforts or indirectly through educational presentations or articles or helping others to create relationships.
A lot of people may think I’m crazy for paying to use Adobe products when they know they are free products that can do similar things but is it really the software I am paying for or am I paying into a system of support? I think the latter. In addition to official tech support I have greater access to experts in the forms of videos, books, etc.
I sometimes give away marketing items with my company name and logo but they are certainly not “free.” Pens, printing costs and other materials can cost a lot and I chose to pay for that. I don’t believe however in giving away any old marketing item for the heck of it. If I am going to give something away I do want those who receive them to get some kind of value from it and at the same time think about me.
Free software, web services, hosting etc. are certainly challenges for my business as I encounter a lot of potential clients who have tried to do thing themselves on the cheap only to discover later they “get what they pay for.” Do I use free software and services? Of course but more often than not it’s for experimental reasons or in the case of Google am not the primary customer. We even use free open source software in our work but we aren’t selling or rather reselling the product. We are selling the ability to customize, our experience and ability to use such tools the correct way.
One of the greatest life lessons I have learned as both a home owner and business owner is that “do it yourself” is never free. Unless I want to devote the time to learn a skill outside of my expertise I have discovered it’s actually cheaper in the long run to hire trusted experts for a one time or rarely done task. I worry less about potential mistakes, I spend a lot less valuable time that I could be using to work on other things, etc. Does that mean I should be dumb and never learn how to do anything for myself? Of course not, often paying in time reaps great benefits but I did want to point out that if you think about it “free” in most cases is a myth.
April 21st, 2008 at 8:35 amBIG Kahuna says:
Well I agree and then I’ll pose why I think FREE can be good as well.
For the most part FREE is bad. But if used strategically (which it never is) it can be very good. For instance Jonathan Salem Baskin (one of the smarter guys I know) did a great article on how to use free the right way:
http://dimbulb.typepad.com/my_weblog/2008/02/i-want-a-free-b.html
Basically he says give away Blu Ray DVD players but in return sign people on to 12-18 month agreements through Netflix, Blockbuster etc. Here’s the kicker MOST people don’t cancel their on going memberships and many become loyal to the brand.
Tell me, would you sign up for a FREE Blu Ray DVD player if all you have to do is sign up for Netflix for a year? Maybe, maybe not but those that did would most likely remain loyal (baring bad service).
I think it’s a neat idea if you are going to use the free tactic. Now handing out pens at a tradeshow…waste o money!
We offer a free SEO Analysis: http://www.brandidentityguru.com/websiteAnalysis.htm.
All I can say is that this has been huge in obtaining new business and then cross selling integrating branding into the mix. Sure we get our window shoppers but we’ve also obtained some fantastic clients through the offer.
I think the key to free is value. Just my thoughts as a branding guy.
April 21st, 2008 at 8:43 amRob Williams says:
There are a couple other ways free can be good things for you to use:
1. I used a free eBook on SEO to root out people who might be interested in joining a community based on talking Internet strategy. Many indeed came to claim their gift and didn’t participate in the community much. But without the free eBook, I wouldn’t have found the few that are active. It cost me nothing to get the free out there and I found the small group of active participants.
2. In your analogy of the carrot, I’d say change it from a carrot to something better. For example, I am working weekends at Disney as a photographer. We take the photos of people for free. They can look at them online for 30 days for free. If they want something they order prints or buy the CD. If not, they have nice photos they can share for 30 days. Of course Disney makes it’s money in this situation off of orders, but many people like the product offered.
Now with all that said, I tend to agree with you that free is overrated. But the point I want to make is that free can be used very effectively — it’s about finding the place it fits.
April 21st, 2008 at 9:07 amFI Chris says:
I see what you’re saying, Spike, and I agree: free for the purpose of getting a name on a list isn’t good. It really isn’t free at all. It generates a fleeting interest rather than true loyalty.
But there’s more than one kind of free. In fact, the English language uses the same word for two different concepts. Truly free things have the capability of generating tremendous amounts of loyalty. Just look at the open source movement. Or Google. Virtually every service Google offers to the general public is free, competitive and has the added benefit of being accessible from any computer connected to the internet, sometimes even from mobile devices (Google SMS, 800-GOOG-411, etc.).
Wired recently published an article about why free is the future of business. Not “free if you do this…” or “free after that…” Just free. For example, from their perspective as a magazine the cost of printing each issue is so much greater than the cover price, they may as well give it away; nearly all their revenue comes from the ad space they sell.
Faux free is a disaster, but true free is a different story. True free removes cost from the equation, and not just monetary cost, but cost in personal information and bother as well. True free is loyalty waiting to happen.
April 21st, 2008 at 10:15 amolivier blanchard says:
Excellent post. I agree with some of the comments that “free” can be used strategically to get results (Netflix BluRay, Delta skymiles, etc.), but this only works for so long. Ultimately though, “free” only works when it feels genuinely special. Like, “hey, you’re one of us. Let me give you something nobody else can get - because you’re in the fold.” The secret handshake or the pat on the back work better than the carrot, in my opinion. Why? because if you need to use a carrot, you just haven’t done a good enough job of creating value to begin with.
I don’t need any more branded pens, travel mugs, yoyos of notepads. (Okay, maybe yoyos. You can never have too many yoyos.) neither do your customers/users.
April 21st, 2008 at 10:25 amStefan Fountain says:
I think free will work just fine to get people in the door. However in order to keep them you need to actually have a product that works. If you do, people will stay. If you don’t people will leave you hanging.
In my opinion free is a marketing trick to get attention, somewhere down the line you need to have the goods to turn a free loader into a paying customer.
That’s why adding value for your users is always priority, giving stuff away is just a means to an end.
April 21st, 2008 at 10:26 amMr. Steve says:
Here’s why I think free is usually a bad thing…it devalues your product. Here’s my personal example: I used to be a house manager for one of the largest professional theatres in Virginia. We sold out about half our shows (an incredibly high rate for live theatre). But the other nights, there’d be between 50 to 100 empty seats. Some people could look at that and say “Why not just give those seats to people out on the street?” Well….because that’s our commodity. By giving away the same seat that we charged somebody else $50 for, we’d be saying that the show isn’t really worth $50. In other words, your product is only “worth” what people are going to pay for it, and if YOU give it away, the consumer will think it’s not worth ANYTHING.
BUT, as Spike points out, if you give it as a gift (say, hand out extra tickets to long-time subscribers or local theatre students that worked on the production, or even as a gift to long-time ushers), then the product still has value. To tell people that this particular show/product is free for now in hopes that you’ll pay for it later is flawed. They’ll wonder why on earth they’re fattening your pocket by paying top dollar for something you so willingly gave away to complete strangers just last month.
April 21st, 2008 at 1:33 pmMichael Lombardi says:
Spike,
Being in the promotional products industry it is very difficult to get people to realize that a box o’ pens isn’t going to result in success.
Free, used wisely, can still be a good thing. But as you suggest, most people don’t put enough work into the Free to have it pay off. And of course, ROI should be a large determining factor of success (and if the same promotion should be run again).
I have outlined on my blog the key to a successful promotion. Free product or not, you need to be Promo-smart: http://marketersynergy.wordpress.com/tag/promo-smart/
April 24th, 2008 at 5:41 amGeologyJoe says:
Nothing is free….well maybe air, but I’m sure someone is trying to figure out how to bottle it like water.
April 24th, 2008 at 6:45 amJenny says:
Okay, so I know this is different from what you’re talking about, but since we’re on the subject of free…
In the case of cities and free events I think it’s a good thing. Case in point: Greenville offers several free festivals and events throughout the year. Spartanburg doesn’t. Thousands of people will come out to festivals such as Artisphere and enjoy seeing art and concerts for free. Spartanburg is having its annual Spring Fling in May and you have to pay to get into the concerts (except local acts). So Greenville brings bigger name acts and offers them for free? What a concept!
Sorry, but it’s something that annoys me so I had to bring it up.
April 24th, 2008 at 7:07 amJen Bybee ~ Fiskateer #258 says:
I joined Fiskateers for the free scissors. I admit it. I wasn’t a scrapbooker before then and I don’t know if I would have signed up so quickly had there not been scissors. Having said that; however, I think it is wise to not sign up every single person who wants free scissors. Fiskateers has become so much more and there are plenty of reasons to become involved: creative crafting ideas, chance to voice one’s opinion, friendships, learning the ins and outs of scrapbooking, etc. Would I have signed up if there weren’t free scissors? Who knows. But I’m sure glad that I did!
On another note, someone posted a link to a free iris folding pattern of mine on a message board. I had 150+ page downloads that day and two people ordered my books. Sometimes I like to give patterns away or do a RAK (random act of kindness) to get visits to my blog. A lot of people just download the pattern but if even a few order my book, I’ve made a little extra money for very little work.
So where do I stand on “free”? I’m not sure. I agree that if the only reason thousands of people sign up for something is to get something free and then not become involved can be bad for a company. Is there a point where you no longer offer something free because you’ve got enough momentum going to keep growing without it? (i.e. scissors?)
April 27th, 2008 at 6:54 pmKrista says:
Spike:
Free is more than a notion as the saying goes. In my experience, the other problem with free is when you don’t execute correctly. Several years ago I was involved with a free with purchase promotion. I have never seen customers call the CEO’s office as upset as when they didn’t get their free product on time. It was just crazy. We vowed never to run something like that again.
May 1st, 2008 at 6:35 am