Comments

Great points, Raj. Here's a quick story about Monty Python increasing their sales 23,000 percent as a result of doing exactly what you suggest: http://mashable.com/2009/01/22/youtube-boost-sales/

Posted by Shelley Dolley at February 3, 2009 8:52 AM

That was a wonderful story. Thank you for sharing it Shelley.

Have a great week ahead.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 10:01 AM

do prospects value something that is free?

Posted by PaulH at February 3, 2009 11:25 AM

Raj,

I hear you! (signal versus noise, indeed.) However,it's always a delicate balance when you're a consultant.

However, I do find the more I give, the more I get. (As long as I set expectations of where the "premium" kicks in. And, I have the freedom (luxury) of custom pricing as well - if a nonprofit or start-up that interests me really needs help, but can't afford my usual rates, I can quote a much reduced fee and do pro bono for the rest. (And, they tell everyone about my services.)

Posted by Mary Schmidt at February 3, 2009 12:17 PM

Raj---Loved your post!

I created Me Mapping [ www.memapping.com ] a very useful life mapping tool and the beauty of sharing ideas online is it has helped people I don't even know and brought new inquires about my book and business.

The key I believe is to share freely and not use it to waste people's time and not as a gimmick to get people to sign up for something else.

Posted by Joy at February 3, 2009 12:18 PM

Thanks to all for the comments.

Paul, Yes - people do value what is free. Tom here is a perfect example - giving away almost all of his presentations for free. Seth Godin did that with his book "Unleashing the Idea Virus" a few years ago. While the eBook was free, the printed book sold tens of thousands of copies.

Mary, great point on working with non-profits. Also, Non-profit boards are typically powered by seasoned executives and visibility there might extend to the corporate world easily.

Joy, good to hear about the free life mapping tool generating inquiries on your other services. That is precisely the point.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 12:53 PM

Raj, dare I say it, but I'm 100.00% with you on this one and have been for 30 years. Bob Waterman and I gave away 10,000 to 15,000 copies of our McKinsey presentation book that had ALL the In Search of Excellence material, about 18 months before the book was published by Harper & Row--with a first print run of just 10,000. (Oh my God, the publisher was pissed off.) I believe unequivocally that the giveaways were the #1 stimulus to subsequent mamouth corporate sales and an extraordinary out-of-the-starting-gate launch.

Posted by tom peters at February 3, 2009 1:43 PM

Tom, Thanks for sharing this. I had read "behind the scenes" story of "In Search of Excellence" but always good to hear it from you.

Have a great afternoon.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 2:02 PM

This matches the logic behind academic publishing. Top University Professors give away their best ideas "for free" in Journal articles for the reason given.

Posted by Mike L. at February 3, 2009 2:14 PM

Mike, that is so true. Didn't think of that angle. Thanks for sharing.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 2:35 PM

Very interesting - Something I have found in my coaching is that students (including me) offer free coaching to gain experience. Some coaches report getting more "practice" clients when they charged a small amount then when offering free. same coaching and they were totally honest about experience levels in both cases. Didn't allways work and I have been curious about the client thinking ever since.

One wheeze that I quite like the sound of although never tried myself is to charge a nominal ammount (a few $) that is then donated to a worthy cause.

Posted by PaulH at February 3, 2009 2:41 PM

Paul,

One approach for you to consider:
With every new coaching client, you can offer a set of audio recordings (Like "Best of Paul" collection) in a CD. That way, clients have something to take back with them after the coaching session.

Giving away for FREE does not have to be a sacrifice of any kind. For example, you could also offer a free Webinar to invite prospective clients to join. The webinar is free and you can continue to charge $$ for a 1-1 session.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 3:19 PM

Raj,

This is the detailed response we were hoping for when we posted the question on your blog the other day.

Thanks for this, and thanks for instigating others to provide their own success stories (including Tom Peters himself!) with this approach.

This is something we'll keep in mind. :)

Posted by A Friend at February 3, 2009 3:51 PM

Hi Friend,

Thank you for your note. As I mentioned on my blog, this article was coming soon and I couldn't give out everything from this article before this was published :)

Thanks for your patience.

Have a great week ahead.

Best,
Raj

Posted by Rajesh Setty at February 3, 2009 5:03 PM

Money ain't the issue... which is surely one of 'engagement' - the nature of how 'you' grabbed 'me'.

'Buying attention' with a freebie often just short-circuits the process, and thereby skews the whole deal.

Posted by g at February 3, 2009 7:04 PM

g, I agree that free that works, to coin a horrid phrase, is an attitude, not an action.

Posted by tom peters at February 4, 2009 12:49 AM

Slightly different angles to FREE is available in Dan Ariely's "Predictably Irrational." Dan (listed recently by BusinessWeek among emerging 10 management gurus) concludes chapter 3, "The Cost of Zero Cost" with "The difference between 2 cents and 1 cent is small, but the difference between 1 cent and 0 is huge! ... Want to draw a crowd? Make something free! Want to sell more products? Make part of the purchase free!"

Thanks Raj for sharing a very helpful list -- for free :).

Pradeep

Posted by Pradeep Henry at February 4, 2009 2:27 AM

I can feel a slightly cynical though constructively-intentioned rant approaching. Indulge me, I've been quiet lately.

Whilst there's no doubting that 'free' can be effective, there's a bigger issue to consider here - namely that of 'do we simply react to market trends - or set the agenda?'.

Personally, I'm all-for the Jobs/Morita/Roddick way of 'do the opposite to others'. And, mounting the high horse, I'll snootily suggest that it's maybe best considered as 'Rather than pander to the lowest common denominator, we're here to raise the damn bar.'

Honestly, much of the whole modern/web marketing is so f***ed as to be laughable - if it weren't for the serious issue that we've created a 'I want and expect it all - now and free' culture which is negatively impacting the ability of many good vendors to do sensible business.

I'm recalling Kalman: 'Everybody who wants information wants it to be free. People who make it, assemble it, edit it, and publish it want to make a living at it. Some of them want large Mercedes-Benzes. But what I want to know is: How is info supposed to be free when food isn’t?'

So, 'we' can't get 'their' attention - because they're either simply too busy, too dumbed-down from reality tv (when was that ever real?), or simply cruising the webworld in search of their next free fix.

'Experts state it often takes seven or more messages before prospective customers make a purchase...?' - so great, we simply pull some 'special report/white paper' out of the hat and hook 'em into a 'we respect privacy and you can unsubscribe later' autoresponder sequence.

We give 'no credit card required, risk-free membership trials' rather than encourage 'em to consider 'Is that something I might actually want?'

That instant-and-free approach just 'makes it too easy'. Cluttering the system with people who'll never buy, it encourages casual, non-committed users. There's a short-term false-dawn of overstated-hope of 'hey, it's going really great - we got x-thousand sign-ons' - but many of whom are simply freeloaders who'll never buy because they're not really interested in what's on offer and simply responded to a 'Hey you! Get this, it's free!' pitch.

Do I blame them? No, not really. And yes, totally… don't just take stuff because it's free and someone told you to - that's the mentality which ultimately will have you accepting dogturds from strangers on street-corners. As taste and good judgment take a vacation, 'no questions asked' becomes the order of the day and we all lose out.

Many who give free stuff don't get a back-end pay-off of committed purchasers, and subsequently withdraw their generosity and fall back on more sane marketing strategies. Some just go out of business, replaced by more hopefuls raising the ante by giving away their stuff.

'Take, it's free...' is a great leveler; deployed by the amateurs who wouldn't know 'effective marketing', it's a substitute for sensible marketing and often forces those who know their stuff to drop to the same level as those who don't - simply to compete in a marketplace in which consumer perspective & expectation has been distorted.

There's a good reason why companies like, for example, Apple and BMW are hugely profitable with tiny market share - and others like, for example, Ford and GM are hugely unprofitable with huge market share. The former focus on those who'll buy - and to whom they provide a got-it-together offer - whilst the latter try to 'buy' market share by getting attention through discounting & deals.

Example: buy a computer from Apple and what do you get? The machine you ordered, the box it shipped in, and a receipt. No special reports on 'The 7 Secrets of Power Computing' or other 'a $97 value' bonuses. And, last time I checked, BMW weren't giving away compacts as encouragement for me to try a full-size sedan.

Is there a genuine substitute for a good offer, well presented? No, I don't think there is. Quality has a place - and that should be at the forefront of every damn thing we do, with price a distant second.

I wonder how Simon's 'The Boxer' would have sounded had it been written now... 'Just a no-money-down come-on from the whores on 7th avenue'... hhhmmm, perhaps not.

And, after you've 'got their attention' from free, what's your follow-on?

Let's close on Drucker's: 'Since you can work masterfully with only a handful of clients, you must choose the best.' Abso-****in-lutely... and I say that begines with considering 'just what kind of people do we want to reach, and in what way?'

Free? Yeah, right - tell that to 'reassuringly expensive' Artois.

Whatever. Enough. Someone else is waiting to use the Internet.

Posted by g at February 4, 2009 5:59 AM

Raj, it's not quite where you're coming from I know, but I spent some years at the heart of the battle in the UK over whether national museums should charge admission or be free. This was a polarising issue both inside and outside the institutions concerned, with proponents of both points of view equally adamant that right was on their side. The free admission lobby spoke about charges financially excluding the less well-off from access to the nation's heritage, which was already paid for by their taxes anyway. Those in favour of charging cited a greater focus on market wants and customer value, and a more robust business approach. In many ways it was one of those head vs heart issues that have little common ground, and certainly no monopoly on truth.

In the course of this battle, which had signficant political overtones and was eventually (for now) resolved in favour of free admission by the arrival of New Labour in power, I saw several things. One was that of itself free is not the habit-changing motivator that many thought it would be; by and large those people who had previously not gone to museums still stayed away when admission charges were removed. Another was that always-free removes/limits options for yield management, membership and special offers, all of which can use free as one part of a creative pricing mix. And perhaps curiously, those people who did come because of free admission were more likely to complain about what they were getting for their (no) money than had happened previously when people paid to get in. Partly a function of these being people less familiar with museums I suspect, and partly a desire on the part of actual £ buyers to find value in their purchase. Which was also borne out by the fact that average dwell time went down in those museums which had removed admission charges.

Where this leads me is to a very general conclusion that free, "giving it away", may well be a great thing to do, but only if there is real thought behind it, in terms of how it is applied, targets, opportunities and risks. It's one of those stratagems where "and what next?" needs to be asked and answered many times.

Regards from a long-time AVG Free user.

Posted by Rob at February 4, 2009 7:55 AM

I have some agreement with G and some with Raj and TP on this.

I think it is worth breaking this down a little

1) Reputation. I know the quiality of TP and people like Steve Y from this site so I happily consume the free stuff. By consume I mean spend time and effort to use what they produce. Which I guess leads onto what is the customer doing with the material? If you are asking them to actually do something then it is not free it is costing them. Going back to my coaching point once hooked clients who pay a nominal ammount are more likely to stay the course of several coaching sessions than those who got it for free.

A few years ago I managed the support for a sunsetted product - we considered free extended support for customers who were strategic and inconvenienced by the product withdrawl. In the end we decided to charge a minimal fee so that they would take it seriously and put the work in on their side to make sure the system was stable etc.

2) If you are looking for debate, material etc free is a great way of doing that. I agree with g though there is so much free rubbish out there now that it takes a reputation built over considerable time (like this site) to really have a kind of value.

Posted by PaulH at February 4, 2009 8:14 AM

Pradeep,

Thanks for sharing an insight from Dan's book. I read the book a few months ago and found that it was simply fascinating.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 8:38 AM

G,

You bring up a number of points. Thanks for sharing this.

The fact that there is so much clutter in the marketplace is an advantage and not a disadvantage if what you are giving it is truely awesome. It is the noise that will strengthen the signal. So those who are contributing a signal won't have to worry about too much noise. Too much noise only amplifies the signal.

For five years, I was the CEO of a company where the focus was "open source" software. From that experience, I agree with you that there are a lot of people who will take free but would never become customers. Think about that for a second - those people who would not have become customers whether it was free or you charged something. So, really you don't incur an additional loss by giving away stuff for free - but there might be an upside. If a few of them are "sneezers" they will spread the message to people who might be buyers.

One of the open source software projects we were working with had 75,000 implementations. How many were paying? Less than 1000. The economics worked out just great. Cost of Marketing? Close to Zero :)

Once again, thanks for the contribution here. Much appreciated.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 8:53 AM

Rob,

An interesting dilemma there. I totally agree with you that there should be a "What Next?" question asked AND answered.

In this particular case though - with government and politics involved, it may be hard to implement any "novel" ideas to generate revenues albeit providing the admission for free.

Thanks again.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 8:57 AM

PaulH,

Agree with you. That is precisely how the mind works too - how much importance you give to something that's "said" depends on "who said it."

FREE that does not provide a positive ROI won't help. It would, in fact, hurt.

Sometimes you download a free report that's 100 pages but the "meat" of the report is only 5 pages. The other 95 pages were included only to increase the "perceived value" but as you said it right - it increases the cost for me. I have to read through 100 pages to get 5 pages worth of value. That just won't cut it.

Thanks again.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 9:02 AM

Tom,

Thank you for your comment on the "attitude."

After a while it extends beyond attitude and really becomes a "way of life." One is not even thinking of "free" or "not free."

Have a wonderful afternoon.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 11:04 AM

In the words of the song "The best things in life are free" - thanks Raj - excellent post - with you totally.

Posted by Trevor Gay at February 4, 2009 12:32 PM

Trevor, kind of you to say that. Thank you.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 12:47 PM

Raj, a very good post and I look forward to all of your posts. I do indeed provide "freebies" but I must admit I am very selective. I got burned a few times in my early years, writing proposals that were so complete and spending so much time with the prospective client that they took my design and did it in house! If I have a relationship with a client, I don't nickle and dime...some of that free stuff is just good customer support. I am likely to price services based on industries as well. I am more likely to charge a higher rate for pharmas (figure somebody has to pay for research:))for instance. And when asked to renegotiate for price cuts, I generally agree to cut my fees the same percentage they cut the cost of the product they sell. As you might imagine, many of them are increasing their prices while asking suppliers to cut theirs. So, absolutely agree with your overall thought...its about service and mission...but it can be a slippery slope. And as my old boss use to say, we ain't the united way!

Posted by Mike Neiss at February 4, 2009 4:30 PM

Mike, Thank you.

A few thoughts to consider:

As you rightly said, there are freeriders everywhere. Giving something FREE should be an investment and NOT a sacrifice.

In your particular case, there could be industry-specific cookbooks of some kind that you could give away rather than a "specific" proposal. If the cookbooks are deep enough, you could engage in an exploratory consulting engagement that is paid for and the outcome of which is a proposal.

Have a great afternoon there.

Best,
Raj

Posted by Rajesh Setty at February 4, 2009 5:47 PM

Raj

I have come very late to this party but, I wanted to say that I have long supported the practice of pricing Intellectual Property and other virtual assets at zero or making them "free" as part of a passive revenue model. So here is a free eBook for anyone who is interested.

My colleague, Jeff Burns and I, tried to build a Twitter type organisation long before Twitter existed - see our free eBook on lessons learned at http://tinyurl.com/46xzu5

Richard.

Posted by Richard Lipscombe at February 4, 2009 10:02 PM

I appreciate the post and give services and goods away quite often. Having said that, I am also very leery of sharks the like of art dealers, music executives, and large businesses that suck up talent and ideas, intellectual property and products, without any intentions of honoring the talent of the person who initiated or created the idea or product. Stolen intellectual property and products occur daily, whether you give them away for free or not.

Talk to the little guy who is trying to feed his family, or young entrepreneurs just seeking a platform for her business plan. Yes, they may have all the goods in the world, including a track record, and have even given a great many of her ideas and products away for free, but those who can actually make a living doing such things consistently starting out are probably far and fewer in between. Are really fat cats giving away things for free? Not usually, this is how they get fatter still. (This, by the way, I am not advocating.)

Today Denny's gave over 2 million people Grand Slam breakfasts away for free. Let's see how that translates. If they have not changed certain discriminatory policies or bring food to the table in a timely fashion no amount of free Grand Slams will help them. But it did perhaps give some downsized folks a meal and is a good thing, I guess, though it seems to have put them greater in the hole. I personally do not feel any differently about Denny's. Free is not always free and there is always intentions to consider.

Frankly, I'm leery of fat cats getting fatter and the little guy getting leaner in giving away freebies. Yes, "give and it shall be given unto you," is a good principle to live by but it's good to know the environment in which you are giving and have an idea of what you might would like in return. Otherwise, it might be a waste of time and expenditure of energy. I would also say that the beauty of giving is not knowing from whom or where your return will come. It is sort of like planting one seed and reaping a bushel. This I understand fundamentally.

Giving is always good on a basic human level. But there are many sharks in the waters.

Overall, Raj, I appreciate your post. Thank you.

Posted by Judith Ellis at February 4, 2009 11:11 PM

Richard,

Just downloaded the eBook. Tomorrow is packed so I will go through this on Friday.

Thank you.

Best,
Raj

Posted by Rajesh Setty at February 5, 2009 2:37 AM

Judith, good points there.

Giving great stuff can be the stepping down to get huge leverage. Of course, one should know how to use leverage. I wish it was one of those topics that was taught in schools.

On a separate note, I also wish that building long-term relationships, making powerful requests, thinking long-term, building and maintaining powerful personal brand were also taught in schools :)

Well, I can always dream...

Thank you.

Best,
Raj

Posted by Rajesh Setty at February 5, 2009 2:40 AM

"On a separate note, I also wish that building long-term relationships, making powerful requests, thinking long-term, building and maintaining powerful personal brand were also taught in schools :)"

Indeed! Though, it need not be a dream! The things that you mention above require more than just school participation; it requires community participation in homes, neighborhoods, places of worship etc. Business and brands are not built in vacuums.

Public debate and discussion are needed. Perhaps this is a singular step forward.

Posted by Judith Ellis at February 5, 2009 9:19 AM

Judith,

Amen!

Best,
Raj

Posted by Rajesh Setty at February 5, 2009 9:42 AM

Very, very good article and clever suggestions!

Truly I believe "Giving is the new taking" as trendwatching also says.

Posted by celeste raposo at February 5, 2009 10:16 PM

Celeste,

Thank you for your comment and kind words here.

As you can also see, just on this blog and actually right in this comment thread, there are SO many insights for FREE.

Thanks to everyone for the generosity.

Best,
Raj

Posted by Rajesh Setty at February 6, 2009 1:55 AM

Raj,
I completely agree with the idea.

BUT the PRICE still has to be paid...by the end-user...he/she still has to PAY WITH TIME... to read/assimilate/appreciate/criticize whatever is being provided free.
And that is the trickiest part...how to NOT JUST give it for FREE...but create a force so compelling that the intended audience/readership PAYS WITH TIME.

Posted by Shankar at February 13, 2009 11:55 AM

Thank You Shankar.

The post is about giving away your BEST work for FREE. If your best work is not compelling enough to get the attention, free will not motivate them. It then does not matter whether you charge or make it available for FREE.

When you give something for FREE, you have to remember that whatever you are offering for FREE is now COMPETING with other alternatives that may be available for FREE.

It has to be a work that is REALLY good.

Best,
Rajesh

Posted by Rajesh Setty at February 17, 2009 3:40 PM

Raj

Thank you for your timely and motivational post.

On 17th March 2008, I read http://www.wired.com/techbiz/it/magazine/16-03/ff_free whilst on holiday and it has shaped my professional decisions ever since.

On my return, I decided to experiment with sharing for free my experience in a traditional and important industry in dire need of innovation, children's indoor soft play equipment.

In the time since, things have evolved and we have been developing content and a platform for the free sharing of information, we hope to engage people of all ages in revolutionising an industry with the potential to enrich children's lives.

The result is http://www.shareandcompareplay.com/ which released in Beta on 16th February 2009. As you suggest, one of the reasons to embrace ‘Free’ is to receive rapid feedback so that we can get better quickly, we invite everyone to review our site and let us know what we can do better.

Giving what you know away for free is a scary proposition and I can understand the fear of some (only a few) in our industry who are wary of contributing, being interviewed etc. However, I have also seen the excitement and energy generated when people open up and share their experience, it really can enable rapid change and create new opportunities.

In my endeavours to get our industry to embrace free, I will point our community towards your blog and hope they will feel more able to take the leap.

Please follow our progress at http://shareandcompareplay.blogspot.com/

Thanks again.
Gareth

Posted by Gareth Lymer at February 18, 2009 6:35 AM

Gareth,

Thank you for posting your story. Will visit the site soon and learn more.

Best,
Raj

Posted by Rajesh Setty at February 21, 2009 2:23 AM

Very true. I give away video tutorials (it's a niche group of eLearning providers) and have nothing for sale on my web site. Just evident passion and maybe a lack of a real life!

My niche in in the use of Second Life as a 3D animation tool for training material. As a result of giving these tutorials to the community, I am solicited for projects in Second Life.

There is absolutely no way I could charge enough per video to match what it generates for me as a consultant. And it's the little "extras" that my community sees that adds value (such as providing text in the tutorials - a practice we preach in eLearning but often do not follow).

To be fair, I also network like mad and use many social networking sites to promote my passion (even Twitter).

The best way to judge what a person can do is to see what they have done.

Posted by David Miller at February 27, 2009 3:07 PM

We COMPLETELY agree! Finding valuable free tools for businesses is our raison d'etre. We have always preached this to our fellow creative professionals. So, a few months back, we began to compile and review all the free biz offerings out there. It helps those looking for free tools find the good stuff (since not all free is created equal) and it helps those with free things to offer gain exposure to a targeted audience. Hope you will stop by, perhaps we can be helpful to you.

Posted by oddpodz at March 2, 2009 12:29 PM

Congratulations on having this post selected as part of the March Carnival of Trust.

The Carnival of Trust selects the Top Ten posts dealing with trust from around the blogosphere. This one fits in because your list is really quite powerful and thougthful.

This month the Carnival is hosted by (and this post was selected by) Beth Robinson at her blog Inventing Elephants, which can be found at
http://www.inventingelephants.com/blog/2009/3/2/march-2009-carnival-of-trust.html

The Carnival of Trust originated with Charles H. Green of Trusted Advisor Associates, and his blog TrustMatters:
www.trustedadvisor.com/TrustMatters

Personally I especially liked numbers 10 and 1. Let me add one more, which is that giving it away immediately leads to an invitation to customize your work. And the act of customization leads to a great deepening of trust.

Anyway, there are a lot of great comments here already so I'll just say congratulations again on your selection.

Posted by Charles H. Green at March 2, 2009 9:07 PM