Profit From Giving Away For Free!

Profit From Giving Away For Free! - 23rd March 2009
Marketing through community service

Here is how you can make money! Give your products and services away for FREE!

You are probably wondering how you will make money from this. Well, you make it on volume! The greater the number of people using your product or service, the bigger will be the profit. It is as simple as that. Yes! The usual market research needs to be done so you may identify the market segment and your niche in that segment. Ones you reach them your unique selling point should kick in. Nothing sells better then the recommendation of a satisfied consumer. “Free” is how you reach them.

Copyright infringement of music cassettes in the 1970s was finally defeated by the licensed music companies selling at a more affordable price. Sometimes it is the bootleggers selling unlicensed copies who create the market which is then captured through a combination of education and enforcement of intellectual property law. So, as Microsoft encouraged the use of licensed software through firm action the market moved towards the use of licensed Microsoft products and sales went up. The lesson here is that perhaps giving away for free initially creates a market that can be exploited through sales generated subsequently for newer upgrades. Free creates consumers. Free creates familiarity. Free can establish trust through experience in a brand name product which consumers will in the end pay to own.

Building a market is what business is all about. An entrepreneur clears an empty piece of land, offers free parking and lets out space for open air stalls at very reasonable rental rates. Traffic of consumers is built up with a community utilizing the free parking and frequenting the stalls. Then the real business kicks in with the entrepreneur making huge profits from billboard advertising and shows paid for by sponsors. The game is free but the advertising boards around the field will cost money.

Giving away the product is a business model worth considering. It has been called "freeconomics" which creates a "freemium" that turns into a premium once the money comes in for added features that the consumer is now willing to pay for.

The Muppet show in Britain charged for a cardboard box which had a free Muppet in it. Mobile phone companies give away free phones and charge for the connection and usage. Now, how about free cars but you pay for the gas. Already you have cities like Winnipeg where the bus service downtown is free but this encourages traffic of consumers for local businesses as people hop on and hop off buses at various points. This effectively transforms the entire city centre into one giant shopping mall. The “free” business concept is certainly a “profit” model. This is where social and business ethics converge to create sustainable human and financial profit.

Giving away free samples at stores as a marketing tool has been around for quite a long time. Now the opportunity to give away to a wider consumer base through internet business centres allow companies to give away free samples to a wider global community thus creating an even bigger market within which sales can be generated. People are strongly motivated by the psychology of the word 'Free', and once the sample gives them a positive experience they will come back and pay for more.

Now is the time for businesses to start reinventing the marketing model for their industry. A young business school student recently explained how she was able to be an international trader while still a student. When asked what products did she sell and to which countries, she replied, “Oh! Any product to anywhere!” How did she get customers? The reply was, “Oh! You know, lots of people on facebook looking for stuff. I give free advice and that builds trust.” How did she carryout the transaction and get payment? Her reply? “ I use e-bay. Payment is secure.” End of story. This young lady is getting rich even as she learns about business in school. Her business model is something worth exploring in a tutorial.

Siddha Param
International Business Consultant
E-mail:siddhaparam@worldwidebusinessconnection.com

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