Free is not Authentic

At Girih, our products often compete against free. Whether it is because a competitor is offering a free trial or using a Freemium business model, we find potential customers asking us to give away our hard work gratis. Meanwhile, our marketing is based on being authenticate — honest about who we are and really trying to serve our customer’s best interest. So we explain how we have worked hard on our product and expect to get something out of it. That we want some commitment from our customers because we are going to invest many hours making sure that our products solve their problems.

I really like this authentic approach, and our customers find it very refreshing. I know that by not embracing this current trend of “free”, I’m going against what feels like the entire Internet. Every marketing guru is saying you need to give digital goods away for free. That you need some giveaway. To those experts I say…

Free is not authentic.

As soon as I give my product away for free, I am lying to my customer. Free is not sustainable. I need to charge for my work. My kids can’t eat off of free. My employees can’t pay their rent off of free. When a company offers free, they are just sweeping the nasty business of getting paid under the rug. Reasons can range from naive — I hope I can figure out how to make money eventually — to despicable.

The Catch When I was very young, record clubs were popular. These clubs gave you 12 albums for free (well, it was a penny, but even in the 80’s a penny was considered free). The catch? Every month they would send you a new record. If you didn’t return that record immediately, you were obligated to purchase it, often for much more than retail. The service banked on a small percentage of people forgetting to return the disc each month.

Many free offerings have such a catch. At their worst they are designed to take advantage of a small percentage users, like “free” texting apps that route messages through a pay-per-use phone number. More benign are “free” offerings that create artificial limitations. These are products that put a time limit, user limit, picture limit, or some other constraint on their product. The hope is that a few people will go to use the product when they really need it, only to find that they must pay RIGHT NOW to get their job down. Rather than looking for another free alternative, a small percentage will plunk down the cash.

Crippled Features A great product does one job extremely well. One version of “free” severely cripples this killer feature to the point that it is useless. This can be hard drive recovery software that lists the names of lost files, but doesn’t actually recover them. Or video conversion tools limited to 30 seconds. Or online games that are free to play, but require money to “unlock” in-game equipment or turns or gems etc… The idea is to trick the customer into investing time learning the “free” tool, and then after that investment asking the customer to pay up.

A variation on this theme are tools that prominently advertise their differentiating feature on what would be a rather ordinary me-too tool. After registering, downloading, configuring, and so on, the would be customer learns that the key feature is only available in the paid version. This is often the case with “fermium” models that lock the killer features away as “premium” services.

Beta This is very common in the tech world. A product is offered for free during a beta period, ostensibly to test it and gather feedback. At a later date users will be charged full price. The implicit agreement is that the customer gets a free product for a while and in exchange the company gets useful feedback. While it’s not as nefarious as other schemes, it still is, at heart, a way to get people locked into a product before you start charging.

Most people using a free beta product won’t provide much useful feedback. If the tool solves their problem they will use it. If it doesn’t solve their problem, they will quietly leave. Traditionally, beta’s have been extended to a company’s best customers — those most likely to take the time to provide valuable feedback. When made as a general offering, it’s just another “free” marketing ploy.

Resource Piggybacking Many free products are getting you to provide resources for their actual customers. Ad-supported mobile apps drain phone batteries faster, exchanging their service for the bandwidth and juice to deliver their customer’s message. Viral products let you have access in exchange for your email address book. It’s a tit-for-tat relationship, one where the actual cost to the consumer may be greater than the product is worth.

Support This is very common with open source projects. The software is given away for free, but the company charges for product support. Most customers don’t believe they will need the support — until they find themselves stuck and dependent on the “free” solution. At that point “free” can turn into a very expensive solution.

In the end, every business needs to make money, if just so they can keep supporting the products their customers depend on. This is such an important aspect of the customer-vendor relationship that is deserves being addressed up front, rather than swept under the rug with a “free” offering. As a vendor we want to be authentic with our customers, so we discuss price up front and never, ever, give our production away for free.

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One Response to Free is not Authentic

  1. Guy says:

    And only the very next day, in the UK, a future financial services regulator was agreeing with you, in the context of ‘free’ banking! http://www.bbc.co.uk/news/business-18186363

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