Free Products: Why and How?
Why would you sell a free product? It seems almost ironic: its impossible to profit, or even make money, on a free product. Or is it? In this article, I will be exploring the perks and quirks of offering free products, including how to profit from them.
From the customers perspective:
- There is nothing to lose. When purchasing (is it purchasing, since its free?), no money transfers hands, which means its typically a no-loss situation, in the customer’s mind. There is really no reason not to get the product.
- It could act like a free trial. Maybe you offer a paid version of the product and the customer wants to try out the product first, before purchasing the real deal.
From the manager’s perspective:
- Customers are worth money. This is a simple fact of business: whether or not they’re paying customers, they are still worth money. There is some sort of price tag affiliated with having a customer, regardless of income status.
- The possibility of becoming a paid customer. If you offer a better, paid product, then there is a huge possibility of converting the customer, especially if they’re an active user of the product.
- Audience builders. If you ever need to build an audience: whether its for an email campaign for a new product line, getting logo and brand recognition, or simply just talking, getting more and more customers creates a true, large audience.
- Brand recognition. Whether or not they purchase a product, odds are they’ll, some day, mention it to a friend. Same with that friend. Eventually, you can amass even more customers (paying or not). Immediate brand recognition anyone? Think about Google. Ever seen a Google Search ad?
How to profit off of free customers:
- Sell the business. This is an easy way to liquidate these customers, but once the business is gone, its gone. No real chance of going back, bud.
- Ads, ads, or something along that line. If you can get someone else to pay for access to your customers, you’re golden.
- Liquidation. If you can transfer a free customer into a paying customer, you can do that for most of your free customers, which means a lot of money. Rinse, repeat, gain more free customers.
In summary, I think that free products are a must have for any business that wants to grow. They have tons of great perks, but the quirks may be major drawbacks and it sometimes depends on your business model.