People have been conditioned to expect things — scratch that — nearly everything, free.
How does that make you feel as a business owner or employee to think that people feel entitled to the fruits of your labor without compensating you? Well, what if there were a way to profit from the idea of ‘free’?
OK, I’ll stop leading you on and just come out to say it: You can make money, perhaps even start a successful business, by giving things away for free. The idea is outlined in fascinating detail in Wired editor Chris Anderson’s book, Free: The Future of a Radical Price.
The concept of free is not new, as Anderson points out. In fact, to sell a new product called Jell-O, the business owner created a free recipe book for his sales force to distribute to households across the country.
Each time a salesperson distributed these free recipe books to a community, he or she went to the local grocery stores to inform the owners there would soon be a huge demand for Jell-O. Sure enough, the free product drove demand for the paid product.
You can do the same thing by creating a free Web tool for people to use alongside the paid version. In fact, I showed you how in yesterdays post about free CSS templates for the Thesis Theme.
The design templates I choose to give away are free. All you need to do is download the files and you own them forever. I invested the time to make them available to you, but the return I hope to collect is not from the design, it’s from the Thesis Theme.
How?
Well, when someone decides to purchase the Thesis Theme from the links I included, I get a little bit of beer money for providing Chris Pearson, the product creator, with a sale (I believe in full disclosure, that’s why I make it clear I am an affiliate for the Thesis Theme). You get the best WordPress theme available, plus a free web design that would cost more than the theme itself does if you hired someone to design it for you.
Here’s how you can put this process to work for you:
1. Identify a product that helps people solve a problem
2. Create a free tool that guides people how to use this product
3. Make a profit by selling the initial product alongside the free tool
This post isn’t meant to reinvent the wheel, like I said the concept of free and ‘value added products’ are not new. But not everyone can wrap their minds around the process of making money or starting a business by providing something of value for free. If you understand the process now, I’ve done my job. If not, pop me a tweet or leave a comment below to ask a follow-up.
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{ 3 comments… read them below or add one }
Great example there. I'm just curious though and if it is possible to share, what is the conversion rate like for people availing of the tool and paying later to purchase it?
Excellent question. Unfortunately there's no set conversion rate for 'free' since it largely depends on the product you're promoting.
However you can increase the conversion rates by targeting a very specific group of people, showing people step by step how to use a product, and of course by pursuing a topic/product people use in large numbers.
Here's an example of a Free Web Design Tool I created.
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Patricia
http://dataentryjob-s.com