Forums: Discussions for entrepreneurs and small business.

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Bill Clanton
http://www.quickbridgesolutions.com

Facebook
http://www.shoutlife.com/billyclanton My Music site.

http://www.mymobiminder.com

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It depends on the service/product that is free. Many companies give out free services because they have other ways of generating income and their service is great.  We have yahoo, google, my space accounts among many others where we are able to use their services for free and have networking opportunities that are valuable to us.


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Take each day, mold it and make it yours.......

http://www.solutionshealthnwellness.com

Most people nowadays have a sort of cynical view of "free" products. We`ve all grown up with the question, "So what`s the catch?" If there doesn`t appear to be a catch, we also want to know, "What`s in it for them?"

I think you can offer a free product like this, but it`s worthwhile to have an "about" page that explains exactly how it is that you`re giving this product away. When people can see that there`s a reason it`s free, I believe that`ll counteract the inclination to believe it`s either worthless, or there`s a hidden catch.

Go back to the classic "give away the blades but sell the razors" story. If you just gave away the razor blades for free, I think people in today`s culture would generally bypass the offer. But if you explain that you`re trying to build a new company, offering free blades, and that you fully intend to charge for the razors, it`d work.

An example is this guy (can`t remember his name) who started the no closing cost refinancing company. Only his first commercials talked about free closings and refinancing. But shortly thereafter, he started including the info that they make plenty of money from the lenders, so they don`t have to charge the client.

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Bill Clanton
http://www.quickbridgesolutions.com

Facebook
http://www.shoutlife.com/billyclanton My Music site.

http://www.mymobiminder.com

http://www.allpetsradio.com

I have an online sports community, in which we offer athletes, teams and clubs the use of our platform and tools for free. Like your product users or end consumers are used to the wave of free social networks, communities and applications usage, which are quite difficult to charge users a fee for the service. You could always offer a premium feature to these users for a small fee (but it would have to be significantly small - under $5 per month). However, B2B is quite different in this case. From my experience you can offer a free trial period to these businesses but they would feel better if they paid a monthly fee. To them its not about the money but rather the convenience and efficiency of their employees (cost/benefit). This is specific to larger companies.

For smaller companies they would be quite skeptical about free services because they are using it for their business (their baby) but this would also apply to free services. Here I think a trial period and a low fee could be a good idea. However, providing YOUR product for free to business users would be a good thing IF the owners are internet/mobile savvy and are not opposed to trying new products AND that your service is not an application they would need to download. This would ultimately boil down to who your target market is.

Cheers

All of this comes under the umbrella of "perception of value." We`re in some weird times, these days, with a whole generation of kids growing up to believe that if it`s on the Internet, it ought to be free. I believe that`s the end result of not teaching anything at all about economics in high school.

Be that as it may, there are various models around, with disclosure being one option. Free trials, with a conversion to for-pay is another, as dwarshager mentioned. The shareware industry is similar, with the free version and the upgrade version having more features.

Ultimately, no, I don`t think offering a free product automatically means people will devalue it. But, as with so much in life, "it depends." ;-)

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Bill Clanton
http://www.quickbridgesolutions.com

Facebook
http://www.shoutlife.com/billyclanton My Music site.

http://www.mymobiminder.com

http://www.allpetsradio.com