No Such Thing as a Free Lunch: The Cost of Freebies

By Erika Dickstein

So, we’ve discussed how to harness the power of FREE! as a marketing tool. Free offerings are effective marketing tools, and their clarion call can be hard to ignore for business owners as well as customers. Further, samples, trials, and demos can be a great way to entice and convert prospects. If you’ve ever enjoyed the Costco sample buffet, only to find yourself checking out with $300 worth of frozen taquitos, you know the principles at work here. But when it comes to your business, it’s important to realize that a $0 price tag doesn’t always mean cost-free. Having waded my way through my fair share of freebies, I’ve come to see that free doesn’t always quite live up to its name. Look, it isn’t that there is no such thing as a free lunch, it is just that sometimes free isn’t so free.

Working as I do in the digital realm, many of my default assumptions – and probably yours, too – are that certain products and services should be free. Where I’d react with suspicion if I showed up at Target and was handed a free shirt, I full on expect a software service I am checking out to let me have a free taste before I start my subscription. Based partly on this mindset, and based partly on my natural inclination to seek out a bargain, when it came to starting my company, I sought out free services.

Free project management software? Check. Free conference calling? Check. Free cloud storage, even though it came with limitations? Check, checkity, check, check. Heck, we still use free products in the day to day operation of Spring Insight… We love you Slack!

The Costs of Free

So take it from me, a freebie veteran, when I tell you I’ve learned some things along the way. If you’re making the determination of whether to go with a free service, make sure you take into account some costs that might not be immediately apparent.

Cost #1 Your Time

Free services differ pretty dramatically, some (typically the “have a taste” version) are great, others not so much. There is one thing that all free versions have in common: Customer service… or actually a lack of customer service. Of course, you aren’t going to get friendly customer service with a product for which you aren’t paying. That means that when you are factoring the cost, you need to factor in your time. No one is going to train you on how to use the product. No one is going to give you pointers on best practices. You are on your own. It is tempting to forget the value of your time when determining the “cost” of a product but don’t. Every minute you spend figuring out a product is a minute you aren’t doing the job you actually started your company to do.

Cost #2 Tailoring

Free services are basic services. They are the off-the-rack, one-size-fits-all services designed to basically meet the needs of a broad swath of Go to the full article.

Source:: Business 2 Community

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