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Should FREE be in your business model?

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April 8, 2008

You may have read the Wired article “Free! Why $0.00 is the Future of Business” (it’s well worth the read if you haven’t), which made me wonder if free is really reasonable for the average small business. Or better yet, should every marketer look at his or her products and try to find a way to offer something for free?

The answer is Yes, you should, especially in a weak economy.

Here’s a few examples of companies doing free that make it work:

One World Cafe. Walk in to this Salt Lake City restaurant and you’re greeted with a kitchen full of food and no prices anywhere. In fact, if you don’t have money, no problem, just work the cost of the food off by washing dishes, cooking, weeding the garden or cleaning up around the restaurant. The homeless eat free. Come for second or thirds, they’ll give it to you no questions asked.

How do you pay? There is a box at the front where you pay whatever you feel the food was worth. Pay more, you feed more people who don’t have money. I can’t tell you how great an idea I think this is. Free works for them - they’ve been around for several years.

Tire Sellers. I’ve blogged about this before, but tire companies like Les Schwab and Discount Tire Company have been offering free flat tire repair and tire rotations for years in hopes of convincing you to come back to them when it comes time to buy new tires. It works.

LogoMaker.com. With LogoMaker you can create your own customized logo, then download a web-ready version free. Free has been a great tool for us (I work for LogoMaker’s parent company) to show the value of our product and help people understand how great a logo can be for their organization.

iTunes. For a long time iTunes has offered a free song every week for anyone to download. This is a win-win-win situation: The undiscovered artist gets publicity, the user gets a free song for their iTunes library, and Apple gets more people hooked on song downloads.

How you can you make it work. Ask yourself this question: “How can I make -your product name- free?”, then think about other ways you might be able to make money to offset the costs of what you’re giving away. Look at the up-sell opportunities down the road (but do not bait and switch!), then test the crap out of different versions of your free product or service.

No matter what business you are in, you can find something to give away for free that does not impact your bottom line: consultations, information, entry level products etc. can all do the trick. Try it!

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