Free Is Not The Enemy of Profit


If your goal is to make money, then making something free may seem like a ridiculous notion. Surely, giving away something that costs you is the exact opposite of your intent. Surely, logically, the way to make money is to find someone and then get them to buy your product, your service, with hard selling techniques, and then pinball to the next person.

The door-to-door sales approach is still how you do it, yeah?

Well, of course not, and you know that. The modern customer is so used to being clobbered with advertising that they do not even perceive some advertisements. People will actively pay money to get away from them.

Now, sure, if you happen to get an ad to someone at just the right time, in the right place, you might just make a sale. But that’s more a matter of luck. And we are businesspeople; we do not deal in luck if we want to be successful.

So, then, that “free” thing? Yes. You give stuff away for free.

You give away stuff for free because they will then pay you. Maybe not every person that uses it, but if your product is good enough, then, yes, they will eventually convert.

Value is not intrinsic to a product from a customer perspective, no matter if your product does have value. You have to show it, prove it.

So, the method is simple, though comes in a few variations. The first is the classic “free trial” option. This works because your customer should feel like there’s no risk to them by trying it out, and then, assuming you’ve made a good product, they will come to realize that they live better with it. They’ll feel they have to keep what they already have—not incur a loss—and will pay you for the privilege.

The other variation is the same, but a longer game. Have you ever used a free software with a premium version? Have you ever used it a lot, never thinking you were going to need the expensive or costing version? Thinking yourself smart, even, for acquiring something useful for nothing?

Well, the idea that this method works on is that maybe not this year, maybe not for a long time, but you will change your mind and want the full product. And, in the meantime, you will often have made an account with them, maybe recommended it to others as a free option, and remained connected to the brand.

Sure, you may be a “freeloader,” but you’re also not. The company offering the service gets customer data, free marketing, free usage information, and a potential sale down the road. If the pricing is well calculated, they’ll still make a profit.

That’s a lot of value for free. And that’s how you make money with free things. Make something good, something of high quality, and then let people use it—without coercion or guile. Do this and make it very easy for them to spend money when they are ready. Not all of them, but many of them, will spend money and be loyal, happy customers.

There’s no problem with passive marketing. It works very well. Despite what people say, there’s no shame in advertising and people don’t hate it. Without advertising, good products would not get used, and lives would not benefit from them. People hate advertising that feels like an attack. So, offer a helping hand instead.