How “Free” Wins Online

Those who are launching internet businesses realize that in the world of online competitiveness, you can’t wait for the customer to come to you– you need to be out there, fast and first. In some cases, companies are finding that they can’t start to charge for products until they have demonstrated their ongoing value to consumers by offering “something for nothing.”

There are four factors that have combined to increase the value of using “free” as a marketing tool on the internet:

1. The “real-time” communication aspect of the web makes it possible for companies to provide consumers with instantaneous value.For example, if you are a health care provider, you might offer visitors to take a simple health and lifestyle quiz and instantaneously receive recommendations as to what treatments and nutrients they need to take in order to get on the path to a healthier lifestyle and complete nutrition.

   Another example would be a gardening store that offers planning for customers gardens as a downloadable PDF. The company website could allow customers who have registered with their email addresses to save their plans on the site for later usage. Any items on the plan that the customer would need are available in the gardening store for sale.

   On our website, we offer free web design tools and products such as photography from around the Billings area as well as around the State of Montana.

2. The technology makes it possible (and inexpensive) to offer costless incentives that provide real value.At a website, a company may analyze visitors’ insurance needs or determine what sort of makeup is right for a particular visitor’s skin type. For most companies, this is a fixed cost – the company pays once to have the software created. Just as a company budgets how much it will spend on radio or TV advertising, now marketers can establish a dollar amount the company is willing to spend on heightening awareness through offering a free service over the internet. The difference? Radio bills are recurring; dollars for internet software are spent once.
3. The absence of communication costs (and sometimes distribution costs as well) between the prospective customer and the product provider makes it affordable for companies to make their free offers continuously available. With no long-distance or postage charges for either of the communicating parties (the potential buyer and the potential seller), internet companies, ranging from those distributing free information to music, are finding it reasonable to offer something for nothing on an ongoing basis.
4. The low incremental cost of providing many products or services once they are developed for the internet means that companies may use a rial offer of the service as a “cyber loss leader.”Like the retailer who advertises a low-priced item in order to entice customers into shopping in and also picking up some more profitable items, the internet’s “free” brings people in and then most sites hope to extend the sale.

What type of free things can your company offer online to draw in new customers? Share your ideas in the comments below and we will give you feedback on what we think would work well to implement that idea.