I was first formally introduced to freemium models working on an pay-per-use technology service where time was the primary benefit of the service. We gave everyone a limited time pass at no cost, and if the user wanted more time, they would have to pay. This is illustrative of a traditional freemium model where you give someone a gated experience or a free sample to entice them to buy from you. Think of the warehouse stores that were famous for their free food samples.
However, as a business owner, how do you know how much to give away? Regardless if you’re a B2B or B2C company, there are a few guidelines you can follow.
Give enough so someone understands your value
One of the adages you may have heard is “give an inch, and they’ll take a mile.” While it is not an exact match with what we’re discussing, it still frames what I believe is an effective thought process. For example, in the consulting industry, you often get asked the “what would you do” question when you’re in a pitch meeting. So effectively, the potential client is asking you to give away your product (your knowledge and experience) for free – even before a contract is even discussed. While it is oftentimes risky to provide an answer simply because you do not have all of the information necessary, it also puts you in a precarious situation. You want to be able to intelligently answer to show you know what you’re talking about, but you also don’t want to give them the answer and therefore they will no longer need your services.
Another way the adage can apply is flipping it to something positive. If the inch (free offer), shows what you offer has value, then your audience will want the whole thing (paid option). I revert back to the earlier example of a food sample. If it tastes good, then you’re more likely to buy it. Pretty simple.
Continue to provide “free” value-adds throughout the customer life cycle
Incentives are also an effective way to retain or upsell customers. Sometimes just the marketing of a free offer for existing customers is enough to make an impact. It can be a reason for an email reminder or it can simply show that the company cares about our relationship. A very common frustration is seeing very rich offers being presented to new customers and thinking that the company does not care about their loyal customers. While loyalty programs can help alleviate this issue, an offer not tied directly to a purchase may have a bigger impact.
And remember, the offer doesn’t only have to be a discount or “cash” incentive – it can be early access to sales, direct access to a senior executive, or even a free t-shirt.
Sharing for the greater good
One of the byproducts of COVID is seeing the resulting humanitarian and social good efforts. From individuals or non-profit organizations to Fortune 100 corporations, we’ve seen an outpouring of donated time, expertise, and physical goods. So regardless of your business objective, if you have the ability to share to help your community in these times, then do it.
In that spirit, if you are a small business owner in need of marketing support, let’s talk to see how we can help. We are offering select services pro bono to support other small businesses.