The New Economy of FREE

How can you leverage ‘FREE’ to gain customers and grow business?

I recently read Free – The Future of a Radical Price, a fascinating book by Chris Anderson that really got me thinking. In his book, Anderson goes into great detail about how certain businesses, especially in today’s digital age, have built entire businesses models based on a single price – $0. Think of companies like Google and Facebook, or even free iPhone apps and free ebooks, what do they all have in common? They give away their core product for free.

If you consider an author or consultant, they may give away free partial or full ebooks on their site (as I do on Retailer’s Roadmap to Success), in efforts to gain more readers who will become familiar with their work, in hopes that they will turn into paying customers by purchasing an upgrade, the full book, or perhaps a speaking engagement at some point in the future.

The same is for the camera merchant who offers free workshops on photography and gives away free information to new and existing patrons. She gives away free information in an effort to turn those potential customers into paying customers.

In his book, Chris Anderson explains that in order for this to work, the cost of the free product or service that a company offers to the public has to be so minuscule that it is not worth metering (or tracking). Or at least, in relation to the sales that can be derived from the free offering.

So how can you use a variation of the ‘FREE’ model in your business? What can you give away for free that will help draw in new customers? Is it information/your expertise? Is it free products or service to customers who you pre-qualify as being big spenders, where the benefits of new sales outweigh the cost of the free offering? What do your customers value that you can provide at very little to relatively no cost and then profit on the back end? Think about it.

I don’t have the answer exactly. However it sure does make a person think. My mind is spinning with different possibilities.

Chris Anderson is also the author of The Long Tail, which I highly recommend reading as well.