Are you giving away enough to make money?

Posted on Tuesday, August 5th, 2008 at 9:22 PM by Simon Smith | Comments (0)

If you’re selling a product online, your biggest concern is probably how to increase revenue.

So when people tell you to give stuff away for free, you might think they’re insane.

But successful internet marketers would disagree.

Leading them is Eben Pagan, whose concept of "moving the free line" has proven infectious.

The question is: How much free stuff is too much (or too little)?

Moving the free line may seem counterintuitive.

But when you understand how it works, it makes sense.

The thumbnail version goes like this:

The concept isn’t new.

Direct marketers have known for many decades that sampling drives sales.

(Ever get a bag of laundry detergent in the mail?)

Retailers like Apple know this also applies to product interaction in stores.

So it makes sense that internet marketers would follow suit.

Particularly since establishing credibility is essential to online sales.

And online, a great way to establish credibility is to demonstrate your expertise.

(Confession: That’s why we publish our Breakthrough Web Writing e-book and our online guide to web writing.)

But how much must you give away?

The answer, in part, depends on your niche’s competitiveness.

Use competitors as a gauge.

And if you really want to destroy them, give away more value than their paid products provide.

Think about it.

If they’re charging $50 for an e-book, create a better e-book and make it free (preferably to people who give you their contact information).

Your absence of cost creates a vacuum.

The cost of their paid programs drives prospects into your arms.

And then?

Create higher-value products for higher cost.

Who needs $50 for an e-book when you can charge $1,500 for a set of DVDs?

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