Freemium price optimization

If you give generously your business will be blessed. This isn't mysticism or spirituality. It's good business. Why? Let's look...

If you give generously your business will be blessed. This isn't mysticism or spirituality. It's good business. Why? Let's look at it more closely.

3 Reasons $0.00 so powerful

I think there are three strong reasons why free is a powerful price.

Freemium price optimization

Risk Transfer. 

If you're a prospective customer, and you wonder whether a new business is going to treat you right, you have a lot to worry about. Let's be honest - it's a big risk.

As a potential buyer you risk,

* Wasting your time on a bad solution
* Wasting your money
* Identity theft
* Tons of frustration and hassle

We've all taken a risk on a new company and been burned. That stinks. When you give customers something for free you take away most of that risk.


When you give something for free you show yourself as generous. Customers have one radio station they listen to, WIIFM What's-In-It-For-Me. You want to broadcast loudly on that station. You want to show them that in the "who is going to win" equation - the answer is going to be them, not you.

Most businesses aren't generous and don't let customers win very much. But the more you can structure your business to give the customer the upper hand, the better you'll do.

Liberty Jane Clothing is from Seattle, and as you might guess, the legend of Nordstrom customer service is always top of mind for us. The return policy is simple - if you want your money back - they'll give it to you.

The most powerful Nordstrom story comes from one of their Alaska stores.

Here is what happened...

A man walked in carrying two snow tires. He set them up on the counter and asked the clerk for a refund. Even though the clerk had only worked there for two weeks he knew two things:
  1. Nordstrom has never sold tires.
  2. He was empowered to make the customer happy.
 So without hesitating he reached into the cash register and gave the man $145 in exchange for the two tires. He was hailed as a customer service hero.

That one story, and the $145 refund, has boosted Nordstrom's brand for the last 35 years. It's a powerful example of the company's fearless commitment to customer happiness. When Nordstrom lets you use and then return items, it is in effect, giving you the use of items for free. It is also showing an extreme amount of generosity.


You show yourself as confident in your business when you give something away for free. Most products and services are average. Most people don't launch high-quality, top-rated, awe-inspiring products. They put out an average product and hope that people won't ask for a refund if they're not happy. If you give away your product, in the form of samples, or offer generous return policies, you show everyone that you're confident your product is going to make the customer happy.

How To Give Away Tons

So how do you actually give generously in your business and leverage the power of $0.00? Let's look at eight ways that might work for you.

If you can give your customers a sample, then they get to try before they buy. That small gift allows them to make a decision without making an investment. It is a fantastic pre-sell methodology. There is a reason Costco does it.

One way to give away a copy of your product for free is to run a simple contest. While only one person gets the copy, dozens, hundreds, or even thousands get engaged in the process. A comment contest on your blog, for example, offers the opportunity for your customers to share in the fun of participating, and support your brand.

A giveaway, similar to a contest, allows prospects to engage with your brand with no commitment.

A guarantee can be a powerful statement to your prospective customers. When we started on eBay the standard guarantee language was, "all sales are final". Instead of that, we decided to offer the most generous guarantee we could. Here is what we say,

"We guarantee you'll be thrilled with these cute clothes, (everyone always is)! Our exceptional rating is important to us and we want everyone to have a great experience with Liberty Jane Clothing. We know you'll love it, but if you're unhappy with this outfit for any reason we will be happy to refund your purchase price, not including any shipping charges. There is nothing to loose."

How-to Videos
When you take the time to offer practical instructions or advice in the form of an instructional guidebook, or video, you're creating free content that has incredible value to your customers. You're also boldly stating to your prospective customers that you're committed to their success with the product.

Similar to a how-to, a tutorial gives prospective customers a free lesson. Tutoring or coaching is a commitment of time and energy in support of the customer's goals.

Bonus Gifts
Customers love a bonus gift. When you can create your product suite so that the customer gets extra value when they buy from you - you're demonstrating your generosity.

Information Products
The most incredible part of information products is that they can be given away for free - in unlimited quantities. Whereas with a contest you're limited by the costs involved in the item you're giving away, with an information product you can be incredibly generous.

For all these reasons, and more, spend the time to consider how your business can leverage the power of the free item.

Price optimization action

Make a list of the ways you currently offer free items. Brainstorm new ways to demonstrate your commitment to the customer's success.



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