I’ve been wondering if I should charge for my blog posts. Up to know they’ve been free for anyone to come and read them. But the bad news about ‘free’ is that people may not take you seriously.
I’ve paid so I want the value
When people pay for something, they expect – no demand – value for money. And they will consume because they have paid.
“I’ve paid £10 for this buffet, I’m gonna eat my £10’s worth”
The difference in attendance levels between people booking on a paid event verses a free event is huge. Eventbrite ran a test putting on the same webinar once as a free event, the second time charging $5. Attendance rates were 38% and 69% respectively. Almost double despite the content being the same.
The two key factors
There are two key factors in play here.
The first is the loss of money. If you pay for something but don’t then consume it, you’ve wasted or lost that money. In the Eventbrite situation the potential ‘loss’ of $5 induced 31% more people to attend. They didn’t want to ‘lose’ the $5.
31% still didn’t. Attend despite paying $5. The reason for that was probably the real cost of attending – the opportunity cost. I doubt anyone attending the webinar charges or values their time at $5 or even $10 per hour. So the real decision was between what value would be obtained from attending verses what else you could be doing with that time.
The second factor is perceived value. There are lots of free webinars. Most have a sales pitch at the end. Some are pretty much sales pitches throughout. So there is a perception that a free webinar may have one or two interesting nuggets before they pitch to you.
A lot of people will sign up with the intention of getting the nuggets but then not bother because something better came up. The content just wasn’t compelling enough.
But when you charge $5 you must be delivering something of value. That is what goes through the mind of the attendee. You can even pitch the webinar as delivering value. For example, you might say:
“We are going to be showing you 5 key strategies on the webinar. To make sure You can book a place we are charging $5 to put off the freebie hunters and tyre kickers”
You’re not a freebie hunter or tyre kicker, are you? So you’ll pay $5 and be 31% more likely to turn up.
A similar situation occurs with the free stuff on your website. These are the lead magnets you offer to entice people to sign up to your list. A lot of people will sign up, download the content then do one of two things:
- Unsubscribe immediately.
- Save it to a folder somewhere never to be seen or read.
Few will actually read it or use it as you intended.
Much of this is driven by FOMO – fear of missing out. I must get that download in case there is something I should know about in there. The intentions are good, but the implementation is poor.
One way to counter this is to ensure you have a follow-up sequence to engage the people that download your free stuff. Ask them about – have they used it. Did they follow the advice? Did they implement? It’s a great way to identify those that are engaged rather than the information accumulators.
Is cheap or any better?
So free doesn’t work too well. How about cheap? As we saw with the webinar example, 31% who paid still failed to turn up. That occurs when people don’t understand the value of what you are offering. And if you price something too cheaply, there is a danger people will think there isn’t enough value in the product. If it’s so cheap it can’t really be worth anything.
The way to overcome this is by positioning the product or service properly. That entails demonstrating the real, tangible benefits that the customer will receive. Testimonials and recommendations are crucial here. They add that third party endorsement which is a hundred times more powerful than anything you can say about your products.
Of course, you could always just put the price up. Now there’s a novel idea.