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Free stuff! Woohoo! Who doesn’t love free stuff?!
It almost seems like you can get something free anywhere you turn these days. That’s because people don’t hesitate to accept something for free, where they’ll be reluctant to pay for it. However, free giveaways aren’t always great.
It’s no surprise that the threshold for saying “yes” to something is much lower if it’s free.
If you’re trying to establish yourself in a new niche, offering something for free lets you reach a wider audience, which is great. Make that giveaway really valuable, and it helps you establish credibility with that audience, which is even better.
What’s not to Love About Free?
The problem with giving away a freebie isn’t what you’d think.
Yes, if you give it away, you’re not getting paid for value you’ve created, which isn’t much fun.
However, the real drawbacks of “free” are different.
First, it lowers the perceived value of what you’ve given away.
If you’re handing it out for the asking, she’ll probably think it can’t be worth much. This despite the fact that if you’re doing things right, the giveaway is very valuable. However, the person who got it without paying won’t easily see that value.
Second, and perhaps more important, if someone gets something without having to pay for it, he has no “skin in the game.”
With no skin in the game, your prospect doesn’t feel like compelled to take advantage of it. If it’s an ebook or worksheet, he’ll simply save it somewhere on his computer and never read it. Maybe he’ll print it out and file it away, still without reading it. What’s almost a given is that he won’t read it carefully and learn from it everything he can. That he won’t implement in his life anything it can teach him.
When You Shouldn’t just Give It Away (Whatever “It” Is)
Beyond the obvious, that you shouldn’t give away the proverbial store by constantly handing out free of charge the goods or services through which you make your living, the most important reason for not giving something away is if you want to make a real difference for the recipient.
For people to get the most out of your product or service, charge for it. Preferably enough money that your customers will put in the time and effort needed to get value out of it.
The Bottom Line
As human beings, we attach more value to something we have to work or pay for. We’ll use it to the max if we had to part with a good chunk of our hard-earned cash, but not if it was free. Think hard about whatever you give away as a freebie. You may rob the recipient of the value she’d get out of it if she pays for it. As a result, she may never buy anything else from you. That’s why free giveaways aren’t always your best bet.
This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.
About the author:
My career has had many unpredictable twists and turns. A MSc in theoretical physics, PhD in experimental high-energy physics, postdoc in particle detector R&D, research position in experimental cosmic-ray physics (including a couple of visits to Antarctica), a brief stint at a small engineering services company supporting NASA, followed by starting my own small consulting practice supporting NASA projects and programs. Along the way, I started other micro businesses and helped my wife start and grow her own Marriage and Family Therapy practice. Now, I use all these experiences to also offer financial strategy services to help independent professionals achieve their personal and business finance goals.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.