Onboarding and Engagement — 4 min read

Why Should You Give Away Your Product for Free?

As a soul traverses through hard and tough times in this unrealistic world, life reasonably demonstrates that the best things in life are free.

Evidently, we all love to laugh at a joke, gaze at the stars in solitude, watch a newborn baby sleep in its splendor, take a long walk on a moonlit beach, sit by the window listening to thunderstorms at three in the morning, and the list goes on. Such priceless moments have broken the myth that the best things don’t cost money. People crave it, yet they do not always get it. The word “free” is powerful, gains attention, and attracts everyone; be it young or old, poor or wealthy. Free is irresistible.

You can barely find someone that rejects a free ice-cream. A very few would hesitate to accept a free massage voucher. I wonder who would say no to a free mobile recharge. Hardly any people turn down a free pizza. We wouldn’t be using Facebook or Google if they weren’t free. In fact, most of the apps you and I use on our phones today are free, including YouTube and WhatsApp. Would you and I have had a subscription if they were charged? I don’t think so!

The quote on Facebook login page reads, “It is free and always will be”. Well, that is about it all. The word “free” is the magical factor that is still calling for and gathering more people to try it who indirectly generate revenue for Facebook and the like. It would be astonishing to know that Facebook is valued at $38.3 Billion and Google at $367.6 Billion as of September 2015.

There are several reasons why the “free” agenda is adopted and proven successful by most organizations:

It increases your customer base.

It compels non-customers to try your product.

It increases your visibility, complementing your credibility.

It adds value to your mission as a humanitarian.

It increases customer satisfaction and boosts the customer confidence in your brand.

It enables easy penetration into the market as a massive brand.

It increases your fame, publicity and draws attention.

It spreads the word and serves as a practical method of marketing and promotion.

It builds awareness and educates the consumer about your product.

It empowers customers with a firsthand personal experience of your product vs. watching a conventional TV commercial.

Let’s quickly roll back in history and see how free came into existence. Pro bono Publico is a Latin phrase used to denote free services donated by professionals to downtrodden people. This methodology could be seen practiced in Legal, Healthcare, Educational institutions, NGOs, Religious organizations and Financial sectors to help the despairing and those in need. Rendering free services have dramatically increased visibility, opportunities, fame, partnerships, and revenue in the longer run. Adopting this methodology for your business will yield the best and desired results in expanding your boundaries, and shooting your revenue up over the long run.

Audrey Murrell, professor of Business Administration at the Katz Graduate School of Business Administration at the University of Pittsburgh believes that those customers who experience a company’s expertise during a pro bono project are likely to return to that company’s services later. She emphasizes that people are influenced by the relationship you’ve built.

Dan Ariely is an expert in psychology and behavioral economics, and the author of the progressive book Predictably Irrational, a New York Times Bestseller. In his book, Dr. Ariely has inferred that there is no visible possibility of a loss for a customer in a free sale; who are usually skeptical of their decision of buying anything at a price. He has proven this human behavior by an experiment that marked a clear difference between a partial and a complete discount (free). He and his colleagues offered Lindt Truffles at 15 cents and a Hershey’s Kiss at 1 cent each, after discount. About 73% of the customers chose an exquisitely creamy Truffle, and the Hershey’s Kiss was picked by only 27% of customers. However, Dr. Ariely reports a dramatic change putting the Lindt Truffle at 14 cents and the Hershey’s Kiss for free. 69% of the customers chose the “free” Kiss while only 31% chose the Truffle.

Out in the open, the word “free” has an enormous power that compels customers. However, free samples should be distributed to the right people; having in mind, the goal of the mission, the cost incurred, and the desired return on investment. For example, Free drug samples are handed over to doctors, who in turn prescribe them to patients.

It requires a high level of planning to succeed in selling your product for free. There are four different business strategies to incorporate a Free agenda.

Direct cross-subsidies: You offer product 1 to a consumer for free, while trying to lure your consumer to consequently purchase product 2.

Three-party markets: You provides product 1 free-of-charge to consumers. Alongside, advertisers are paid to play their part in luring the customers to sell a product 3 to the consumer.

Freemium: A free version (product 1) is sold to customers hoping that some of them will upgrade to the paid premium version (product 2) which has more features.

Non-monetary markets: In this strategy, there is no exchange of money at all. It is just like people giving away gifts with no hidden motive of luring to sell anything immediately or at a later point in time.

Organizations like Amazon, Zappos, and eBay have great success stories to back their claim on how their free services have triggered a phenomenal shoot in sales. You should try a pro bono project in your business, but only with rigorous and careful planning. You can be sure that the value of your product is not determined by its price.