I read a news opinion column recently that claimed the great benefit of the Internet to small businesses was that it allowed every business to be built on the same footing – low startup cost and potentially unlimited exposure.
The article went on to say that if a business expected to compete in its niche online it had to give a lot of things away for free as that was the expected standard online these days.
Is the Internet business model really that different from the way business is done in the off-line physical world?
Do solo entrepreneurs really have to give away a lot of their valuable information products in order to attract customers and expect product purchases?
I think it all depends.
Yes, if your business is one of many similar operations and you can only differentiate yourself because you offer many freebies when all your competitors don’t, then maybe your freebie strategy is critical.
But I’m not sure that you have to give away your secrets or your proprietary knowledge if it is something that only you have to offer.
The “freebie train” as it’s sometimes called (one free offer or product after another just like a string of railroad cars) is really a two-edged sword.
In my mind there are downsides to giving away a lot of value-packed gifts.
You see there are many freebie junkies, tire kickers, and surfing bums that never spend a dollar online. The can fill up your web site subscriber list and data base in no time at all. But do they ever buy from you?
In fact, their whole strategy on the Internet is to find as many free things as possible.
Is that really the type of customer or prospect you want to have at your site and on your mailing lists?
I would suggest you carefully consider why you offer free products and what it potentially means for your client base.
You see, some business owners would rather cater specifically to prospects that have proven to make sizable purchases online. These people are the “bread and butter” of many online product creators as they tend to purchase over and over again within the same niche.
Some marketers even rent mailing lists from brokers that target previous purchasers of “big ticket” items because they know these people are not necessarily freebie driven.
On the Internet, it’s sometimes very difficult for one small business to compete head-to-head with other companies that have greater marketing resources.
That is part of the reason why I try to suggest finding a niche that is very deep and specialized . . . so you won’t be competing with the large box stores and the Amazons and eBays of the Internet.
It will be a place where others won’t want to go since the audience is relatively small and too focused for the “quantity” minded sellers.
But you know what? Even though the pool of potential prospects in that niche may not be great in number, you can safely assume that there will be enough interest to keep a small business profitable. Why?
Because even a customer base of less than 1,000 buyers (yes, even down to 100 buyers of higher ticket items) can support a small time operator if they are all committed and if they buy on a regular basis. What if you have a committed subscriber base of 100 customers to your $97/month membership web site? You’d be grossing close to $120,000 annually. It has been done more than once before!
And you can assume that it will be possible over time to grow your niche because the Internet is still in a state of relative infancy.
F-R-E-E offers a lot of attraction for small business, but it can never replace the motivation behind loyal and rabid buyers contemplating and expecting valuable information from a business they trust in a niche that relates to their passion.
So while “free” offers, click bait (as some call it), and lead magnets can attract people and soon-to-be subscribers to your web site, there really are some reasons why you need to understand what giving away freebies means for your business and your customer data base.
Some business owners have found that when they repeatedly give away valuable things freely, their customers begin to expect that to be the norm and sometimes show hesitancy toward buying from that same business. In other words, the business is raising it’s customers to expect everything from the business to be free of charge.
Here’s another downside to “free” – often if you use the term “free” in your titles, headlines, emails, offers, etc, your messages can get flagged as “spam” because the term is used by so many spammers in their everyday mailings.
I hope you will consider all the positives and negatives that “free” might mean to your business going forward.
To your online business success,