Often people will tell you that word of mouth marketing is done by giving something away for free so people will tell everyone they know about you. They usually gloss over the danger in this method.
On the internet with costs being so low it’s much easier to make free offers, but even then you need to be careful.
I use an amazing piece of statistical software created by James Brausch called Glyphius that helps me to write better sales copy. This software tells me that having the word ‘free’ makes the copy significantly LESS likely to be profitable.
That’s a really remarkable claim.
How can describing something as ‘free’ be a good way to lose money?
Let me get to an example.
For those of you who didn’t manage to get on the mailing list of Jim Straw for his first newsletter of the year you missed another marketing gem, and I’ll just quote a bit of it…
One of my all-time “big”response ads was:
FREE BOOK — “Offshore Banking Is Not Evil.”
Over 50,000 people requested that “freebie” from 1986 to 1988. — Every “Free”booklet I sent out cost me nearly $3 … plus the cost of the ads. Instead of the usual 15% to 20% conversion rate (paying customers) I usually got from “inquiry”ads, the rate was a low 2% to 3%. — That promotion ate my lunch.
In 1988, I changed the ad to read:
OFFSHORE BANKING is not evil. Free.
Each inquirer received a one-page flyer … which cost me about 20ยข to send to them … offering the book for $10. — The response to the ad was much, much smaller but the $10 price tag on the book paid for my ads and my conversion rate went up to 30%, producing a significant profit on the very first mailing.
Did you notice the two changes?
First, the ad changed to catch people interested in the topic, rather than people interested in free things.
Second, he reduced what he gave to the people who wanted free stuff, and immediately picked out those people who were willing to pay some money.
There are many, many people who will be freebie seekers. There are far, far fewer people who will put down their money. However these latter people are the only ones you need.
Don’t get me wrong.
Free is a powerful word.
You will get more sales by saying “Buy One, Get One Free”, than you will with “Two For The Price Of One” or “50% Off”, even though these can appear to be the same offer. [Here’s master copywriter Gary Bencivenga’s take on this topic.]
But the word ‘free’ has the danger of attracting tire-kickers, rather than buyers.
Each of these types has an entirely different mental approach.
Tire-kickers are more likely to find reasons why what you offer is not up to scratch, and they are more likely to take up lots of customer service time with questions and side-issues.
People with a buying mentality are actively pursuing a solution, and will give you the money when you demonstrate you can provide that solution. They will give you word of mouth marketing to other potential buyers because they have already made a commitment to you themselves.
Are you currently offering something for free in your business?
How about testing it against an offer that requires a small payment, either instead or immediately afterward the free offer?
At the very least make sure you emphasize WHAT you offer, before you mention that it is also free.
-Martin Russell
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6 Comments
I would love to have a tool like Glyphius. I have tried a bunch of how-to books, however you still have to test copy for a long time after you get your best possible hypnotic language, and it doesn’t work to just get PLR and put up the copy for yourself. A lot of the site copy that comes with PLR must not be very good, as I haven’t ever seen any success using it.
I think this principle applies to off-line offers as well.
Adding something as simple as a small charge for packing and postage can also reduce time-wasters; not always, but sometimes.
I offer a ‘free’ audio-CD to anyone who buys my business book through Amazon. All they have to do is pay for p&p. It is a specific ploy to get the contact details of the people who have purchased and are serious about the subject.
Once they request the CD they are fed into our back-end marketing activity. And, so far, it seems to be working quite well.
~ Carol
Carol
With the Amazon book you are almost double qualifying. They bought the book (but they might have read it from a friend, or found it in a library), then paid postage for your CD, so they are likely to be ideal prospects.
I’d be interested to know your response rate ie CDs requested per books sold, to guess whether a completely free offer would be worth even more to you.
Books are hard to test with in this way. Can’t put 3 offers eg email only, mail with P&P, mail with free. Oh well.
Hi Martin,
Have signed up for Jim’s newsletter again but missed out on the January newsletter.
You can view previous newletters in his archives… so I’ll have to wait till he archives January and just read the other issues.
http://www.businesslyceum.com/archives.html
Hi Martin,
Received Jim’s archive list in an email from him… great read.
Re “Buy One - Get One Free! Just read Gary’s detailed 15 point checklist of ‘Proven Offer Ideas to Boost Your Response’. Very interesting & informative.
He gives a great example of this…
The killer offer: “For every one-year subscription that you give to someone else, we’ll extend your own subscription by a year.” Give one, get one free. Give two, get two free, etc.
It worked like a dream. One man gave away 62 subscriptions, earning so many one-year extensions, he’ll have to leave them in his will.
I have been reading James Brausch’s blog and have been impressed by his 24 hours only sales. He gives great value at a substantial discount but it certainly isn’t free.
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