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NOTABLE! Unpopular Opinion: "Give Value for Free" is Bullshit More Often Than Not

Discussion in 'General Mindset, Motivation, Beliefs' started by AgainstAllOdds, Oct 27, 2018.

  1. Nigel B
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    Nigel B Life Long Learner Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    (I've not read Ca$hvertising - the quoted ratio may be relevant to a specific market covered by that book. If it's focus is a $20 advertising spend generates $10 profit after all other COG, overheads, etc. - but for product/service to price ratio I think the following is more realistic.)

    10:1 is high, but much more likely to get a bite than 3:2 ($30 value for $20 spend).

    The reason is that in order to overcome buyer hesitation they have to be sure of the value of their spend. Early in the relationship they are only working on your reputation - as well as they can figure that out - and your claims. So they need to believe they will get massive return, in order to take the risk - thereafter (assuming you prove your value the first time out) that ratio can close.

    Hence the 'guru' model which walks people from a $97 course, to a $500 course, to a $2000 event and then a $10K 'inner circle' - each time narrowing the value to price ratio.

    The ratio also very much depends on the product or service of course. If the product is genuine dollar bills - the ratio does not need to be anything more than 1.01:1 assuming a zero cost transaction for the buyer. Point is, certain products (more so than services) do not need to offer a 10:1 leverage - but I think the minimum perceived leverage which is likely to move people from skeptic to first-time-buyer is not usually less than 3:1 and normalling the range 5:1 - 10:1.
     
  2. ChrisV
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    ChrisV Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I aim to do that. Whether that actually happens or not is debatable. But I agree. As long as you're offering $1.01 the value for $1, people will buy*. But the higher you tilt that ratio in the customer's favor, the higher the velocity they will throw their money at you. When you bump that ratio up high enough, that's where you start getting people camping overnight to get your product.

    *i have to make a footnote here because there's also opportunity cost. Yes, they'll buy something worth $1.01, but if there's someone else offering something worth 1.02, they're gonna jump on that deal instead. The big lesson is to boost that ratio as high as you can without incurring losses from elsewhere. This is signifigantly easier to do with scalable businesses.
     
  3. Nigel B
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    Nigel B Life Long Learner Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Yes marginal value premium creates marginal loyalty for sure.
     
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  4. Real Deal Denver
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    Real Deal Denver Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I have no regrets buying your books. They provide solid value.

    I could (and do) spend years searching the internet for free information. I know I could dig up information for free there. On the other hand, I can read four books in a month and go from 0 to 60 and break records. I'm a serious player. In fact, the thing I don't like about the internet is how it sucks me in and I end up spiraling off in some interesting direction and waste hours. Yes, I learn a few new things - but I have to have discipline. I could spend days in the vast sea of information on the internet. That's great, except I have a list of things to accomplish. Discipline. Your books "inject" the knowledge into my brain directly. That's worth a LOT.

    But, I will be checking out your website anyway... Wish I had more time. If you knew the hours I've been putting in the past few months. I've accomplished a lot - but - I might just quit and take two full time jobs instead. I'd make more money and work less hours. No kidding there.

    Despite the great information on the net, I can't stay in the warm up area forever. I have to take make that move and step up to the home plate and hit the ball. Out of the park. Hopefully. {sigh} I like having the odds so much more on my side from the things I have learned from your books.

    Um. Wow. I guess THAT was the push I needed to confirm that I really do need to get to work on my own books. Next time you're going to hit me with a truck out of the blue, warn me first.

    This was great information. Almost fainted though...
     
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  5. MythOfSisyphus
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    MythOfSisyphus Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I think when it comes to informational products, giving away value is huge. Most of the courses, educational books, ebooks etc that I've purchased have been because I was already familiar with the creator/author and had already been exposed to many of their best ideas and concepts for free.

    Even if you give away your absolute best information for free, people will still buy your course or your book because you've proven you can provide more value than others in the same niche, and for all they know the rest of your course/book/whatever will be even more valuable.

    This website is a great example of giving away free value. You can guarantee that millionaire fastlane and unscripted have been purchased by thousands of people who otherwise wouldn't have purchased them without first coming to this site for all the free value it provides.
     
  6. Everyman
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    Everyman Get To The Choppa! Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Using your own words. More often than not, you are absolutely right.

    Would you agree it comes from the fact that 80-90% of people we meet, aren't even vaguely interested in what we do, not to mention, what we want to sell to them. Unless we approach them and start talking to them. Then we may see that, still 80-90% isn't interested, but 10-20% is. But we have to go through the 80-90% to find the 10-20%...

    I think it's industry specific. Somebody has mentioned before drug dealing. So low-cost, astronomically high-margin product. It was made to be 'marketed' this way. It might work better or worse in different industries, with different products.

    It might build trust actually. Trust is more important than anything else, I think. I don't buy things that I don't trust, don't buy things from companies I don't trust and people I don't trust. I am ready to pay high premium to anyone, who I know is trustworthy i.e. will deliver what he promised in time he promised (even the time is not that important in some cases).

    Somebody has already brought up the book "Give and Take". Don't want to duplicate it here. Just a couple of questions. Did you ask him for anything in return? Did you negotiate it before or even during this process? Did you give him 'something small' for free before committing to this huge deal? What was the relationship like before this deal?

    You are absolutely right. It's one of the tools to use to 'sell'. Just one of many that should be used alongside others (emailing^^^, cold calling, 'social media', etc etc)... But giving away value for free isn't always bad, it's just not properly used in a specific situation.
     
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  7. Thomas Baptiste
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    Thomas Baptiste Third of His Name Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I have been conflicted about this topic for so long but it actually makes logical sense now. Thanks for clearing that up.
     
  8. maikooo
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    maikooo Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Great post! Thank you ...

    I fell for this, totally. Worked our a$$es off for a year providing as much value as possible in terms of valuable content on various networks. The plan was clear, modeled after favorite podcasters I followed in the past.
    1. build the community by providing as much valuable content as possible before charging
    2. charge sponsors for the access to our audience and charge the audience for added-value products/services
    The biggest risk was only related to the fact that our audience doesn't have much disposable revenue. The industry is prone to it.

    Completely dismissed the need for actually validating the need (pun intended). Completely disregarded the fact that our "potential" competitors have this type of content only as part of their outreach strategy. Basically threw my Lean Startup Build-Measure-Learn training out of the window and went head in.

    My partner mentioned that we shouldn't focus our business model around this, but I was too swept away by the success of star podcasters getting 10'000 downloads per episode. WTF, they are charging $500/episode, 3 sponsors each, 7 days a week. WTF*2, that's almost $50k/month. Patience and persistence will get us there ... well, after 10 months we barely had <1'000 downloads/views per episode on pod & YT. Ain't nobody pay high CPMs on that one.

    Anybody who has tried a content type of business knows that sponsors may try with you out of respect/curiosity and a good pitch but they will only renew if you deliver numbers. The latter was simply not there. The audience doesn't care. We just haven't skewed value towards our offering in an immensely overcrowded industry filled with free content on every corner.

    Well, in the end, we made some money to pay the bills, combining all kind of income streams, however, haven't created a system. We failed all the commandments at once.

    The lesson is simple; create as much free content as you have resources for and makes sense from ROI, but only as part of your marketing strategy, supporting sales of your offering that addresses tangible pains - either by attracting new customers (SEO, trial) or increasing the perceived value of your offering

    The new framework is clear; create product(s)/service(s) that address real pains, provide immediate value exchange ($) and have inherent scalability in them. Content & Community are layered on top of it, not at the core of it.

    Hope this helps!
     
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  9. Fred Chevry
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    Fred Chevry Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Every time Wikipedia begs me for money, I think about this. I can't help but think: "Not my fault if you built something cool no one wants to pay for."

    It also feels that many tech companies that survive on investors money preach that modus operendi since they get massively successful despite the math not working. At least in a conventional manner.

    Sent from my SM-G925W8 using Tapatalk
     
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  10. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Wikipedia raises about $50M per year in donations. Don't assume that everyone feels the way you do.
     
  11. James Klymus
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    James Klymus Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    While I do agree that for some businesses, Giving free first would be silly (Like the cookie example you used). But business doesn't happen in a vacuum, and it isnt a black and white thing.

    For some businesses it can work really well. Especially when it comes to info marketing and even consulting. For example, when I first started working out a few years ago, A few people I knew talked about Greg from Kinobody having really good programs. So I checked out his youtube channel for a few weeks and saw that he had some awesome content and knew what he was talking about.

    He even sampled some of his workout routines on his channel. I ended up buying his "greek god" program and he has a happy customer, because he let me "see behind the curtain" of his courses and I wanted more. And I know greg does very well with his company Kinobody.

    I mean even MJ samples his books. He lets you download some chapters for free, and you'll probably buy the whole thing.

    It isn't a black and white answer, and of course a bakery giving away all of it's cookies for free is not smart. I even think that particular example is silly. But in some businesses, Sampling the product can lead to sales, like it did in my example.
     
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  12. Fred Chevry
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    Fred Chevry Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Let me rephrase: I don't want to pay for it. On the other hand, I gladly donate to blogs and creators I like. Maybe it's just their begging tone that annoys TF out of me.
     
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  13. Mckenzie
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    Mckenzie Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I recently listened to a podcast where the guy talked about "seeds of discontent" and how charity or freebies can in fact become toxic by leading to complacency, and resentment among the very folks you intended to help. The moment I heard this while running in the morning, I stopped and contemplated on this. It resonates with me a lot when I looking back at my life and those people around me both in personal and business life.
     
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  14. MrChill
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    MrChill Contributor I've Read UNSCRIPTED FASTLANE INSIDER

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    Congratulations on working hard and hitting 75k! What product/service and how have you been trying to convert them into paying customers?

    I think freebies have a valuable place in the toolkit, when used properly. Costco, a business that most customers absolutely love, give away countless freebies each year in the way of samples. They know that when people are exposed to something new and novel, and that the quality is solid (Costco's corporate buyers don't buy garbage from suppliers), people will buy! The cost of these samples or freebies is nominal to Costco relative to the number of new sales they'll make.

    Likewise, Evernote and many other Freemium SaaS companies have such nominal incremental costs to add a "free" user. They know that once I put 100's of notes in their system, I'm not going to easily jump ship when I finally outgrow the free subscription. They know I'll open my wallet for the value proposition of a few bucks for month, given all the extra features and storage I get.
     
  15. banjoa
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    banjoa Present

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    Ben Settle seems to agree with OP.
     
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  16. Johnny boy
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    Johnny boy Gold Contributor FASTLANE INSIDER Speedway Pass

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    My lawn care company:

    In the winter I offered free lawn care for people.

    Most of them signed up for our premium plan in the spring.

    Average profit per contract: $1000 a year + lifetime value if they stay with us.


    My web design and marketing company:

    Talked to people over the phone in long conversations and gave away all of my best advice for them to grow their business. I’d tell them most of what they were asking me to do wouldn’t actually help and would just be a waste of money to pay anyone for.

    They’d send me $1000 for a two hour conversation.


    What is content marketing?

    How do people become celebrities in the first place?

    Why is Gary vaynerchuck bigger than all of the social media “gurus” out there?

    Giving for free works. Ask Facebook.
     
  17. JScott
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