Steals for Marketers – Free: The Future of a Radical Price
So, what can marketers learn from Chris Anderson’s Free: The Future of a Radical Price? Despite the controversy of its launch, 12 sections were taken from Wikipedia and un-cited and the public’s initial balk at the $30 price tag for the all-about free book (which is now available in its entirety for free on Google Books, yes despite all that…there are some marketing goldmines from the Wired Magazine Editor-in- Chief.
Here are the top takeaways we think marketers can use to their advantage:
Leverage the Reputation Economy.
Anderson talks about Abundance Thinking in the digital age. The concept here is that ideas want to be spread and never did they have the viral leverage they do today thanks to the proliferation of the Internet. The Reputation Economy is all about leveraging Abundance Thinking to build a reputation for yourself, your company, your cause. In the digital world, you build “credits” based on the value you provide followers. This value could be the knowledge you share, the entertainment you provide or the cool factor that followers receive from connecting with you. You can use free mediums like the Internet, and social media platforms Twitter, YouTube and Facebook to broadcast or deliver your value.
Do you have a sales model that could support a scaled-down free version of your products as well as a customized, premium version? Anderson points to companies like The Wallstreet Journal that offer readers a free online version of their coverage. But, if you want to access all Wallstreet Journal articles including archived articles and “premium” coverage – you have to pay to play. How can you afford to offset the cost of your product by offering a freebie version? Subsidize the cost with revenues from your customized, robust sales. Retailers use this strategy on their “buy one, get one free” promotions and “free samples” knowing once you’re in the door – you will probably purchase other items at full-price.
“Follow the free” to reach the masses.
If you have a product or service you are trying to share with the masses, give it away. Anderson notes this is not a new strategy. Brands like JELL-O and Gillette went from unknown to celebrated with free. In the first 25 years since its inception, JELL-O distributed over a quarter of a billion free cookbooks (with JELL-O recipes) to consumers. Initially, the cookbooks were distributed by salesmen who would then reach out to merchants to encourage them to stock up on JELL-O in anticipation of the consumer demand. It worked. And Gillette cornered the disposable razor market by getting free razors into consumers’ hands. They partnered with banks who offered the disposable razors and blades as “Save and Shave” promotions; as well as the army who equipped servicemen with the razors. Consumers then bought Gillette’s disposable razor blades and well, you know the rest of story. If your goal is to reach the masses with a new product, think about a complementary product you might be able to offer for free. Of course offering an existing premium brand product for free can decline its perceived value so this approach is not for every brand or company.
Free the fear.
Consumers are often afraid to make the wrong purchase choice so they avoid the unknown of a new product or service. How can your company alleviate their fears? Often this begins by putting yourself in your customer’s shoes. Zappos CEO Tony Hsieh knew when they started the first online e-commerce shoe store that people would be scared to purchase shoes they couldn’t try on so they threw in some free. Zappos offers two-way free shipping so there’s no cost to ship shoes back if you don’t like them. They also offer unparalleled, unconventional customer service and support online and by phone to eliminate fear or dissatisfaction.
Want more? There’s a great interview of Chris Anderson discussing Free: The Future of a Radical Price on The Colbert Report and you can access the complete book for free on Google Books. Of course, you can also purchase a hard copy (or a digital version for your Kindle) on Amazon.