Why Sell Something, When You Can Give It Away FREE?

By
Posted In: General Chat 

A warm welcome from the Yorkshire dales, I believe the technical word for this weather we are experiencing today is “Summer”, it’s making me feel the need to go outdoors but I’ll resist the temptation whilst I write this blog post.

In todays post I’m going to look back at the events of the past few weeks, as it’s given me some food for thought, and I’m in two minds about what to do, so I’d appreciate it if you could have a read through what I’m about to write and give me your opinions.

It all started a few weeks ago when Socrates Socratous asked me if I’d consider giving away a copy of my Boomerang List Builder software to all people that signed up to his Resale Rights Fortune pre-launch list, so without much hesitation I agreed.

Why Did I Agree To It?

Quite simply because I knew the launch would be huge, and if I had a “soft opt-in” in place, I would get a ton of new subscribers – and I did!

Take a look at the new size of my mailing list:

Aweber Numbers

And I would like to point out that this is probably one of the only times I’ll ever show you a screen shot of my mailing list numbers, so make the most of it!

And I’m not posting the numbers in a “my penis is bigger than yours” “my Dad is better than your Dad” sort of way, I’m just showing you what I gained from giving it away for free – a ton of new mailing list subscribers.

So fast forward a couple of weeks to the end of the launch, and I’m still getting a few new subscribers each day from Resale Rights Fortune.

So here’s the dilemma, what would happen if I got rid of the $47 Boomerang List Builder price tag, and gave it away for free ALL THE TIME?

If I gave it away for free, I’d be losing upwards of $10,000 each year in sales, but I’d be building my mailing list like there’s no tomorrow, and I could implement a OTO type system so there would still be the potential there to make money from OTO sales, and it would still let affiliates earn commissions for promoting.

I know as a customer you will be leaning towards the “Free” option – and I don’t blame you! But put yourself in my shoes, what would you go for?

Would you keep everything as it is and charge $47 to anyone who wishes to purchase a copy of the software, and have a steady trickle of sales every month?

Or would you give away the software for free in return for an email address, so you’d lose out on the income from sales, but you’d be building a huge mailing list that would potentially be a much bigger earner in the years to come?

And I’ve just had a brainwave…WE SHALL HAVE A POLL!

Possibly the first ever poll on the El Passo Blog, what a joyous occasion – so go ahead and vote in the poll, then tell me what you think in the comments section below!

Welll….we were going to have a poll until the plugin decided to stop working, so we’ll have to make do with just leaving your thoughts in the comments section instead, sorry about that, I was really excited about the 1st El Passo Blog poll as well 🙁

Thanks for reading and I look forward to hearing your suggestions.

Regards,
Dan




Receive Free Email Updates When A New Entry Is Posted. Join Them!

Comments

52 Responses to “Why Sell Something, When You Can Give It Away FREE?”
  1. Paul Saunders says:

    Hi Dan,

    I thought I would put my two cents into the discussion. I agree with you about switching from paid to free for the product – in fact I have been reviewing the whole micro continuity strategy recently and it would seem that if you give something of value away for free with a back end strategy you make more money. So I say go for it.

    Paul

    • Daniël says:

      Hmm, Paul,

      Isn’t the sales page of RB’s Micro Continuity itself saying it all already? Seems needless to me to have him repeat his own sales page on a mp3 player!

      After reading it, I don’t think it’s necessary for me to also get the €10 mp3 player for $14.95 S&H + being forced into one of his continuity programs.

      But then I’m probably not objective as I’m not a RB fan.

      Daniël

      • Dan says:

        I’m possibly being a bit of a thicko, but what’s RB stand for, and what’s this “Mirco Continuity” buzz that’s going around. Have I missed the “next big thing?” 🙂 🙂

        • Ray says:

          RB is Russell Brunson. Supposedly one of the “all time” type gurus on internet marketing. I agree Daniel with most of what you say. He hits very hard with the OTO upgrade attempts a la Filsaime, but I thought ordering the MP3 for $10 was very cool knowing I would cancel before the rebill. The 10 opt in templates he gave away were easily worth more than that and what the hell, I need an MP3 player for the gym.

  2. Lena says:

    Hi Dan – good point there. “Why sell when u can give away FREE” !

    I am a new marketer in the internet world. I think most of us still haven’t grasp the idea of FREE Giveaway in return for an email address.

    Yes, the “money is in the list” .. heard it so many times but the thots of giving away $47 for an email address still haven’t sink into the mind for the long term sales and OTO.

    Anyway, I got the Boomerang List Builder too… great software. Have used it a couple of times ( Socratus way ) to build my list now. 🙂

    Cheers

    • Dan says:

      Hi Lena,
      Thanks for the comment.

      The give something away in exchange for an email has been around for a while now, but I’ve only really tried it on a small scale – giveaway events, the odd PLR product and so on, I’ve never used it for one of my main projects.

      But it is very tempting!

      Glad you like the software, give me a shout if you have any problems.

  3. Dan says:

    Thanks for the replies. it sounds like the “Free” option is currently in the lead – pretty much what I expected really.

    I’ll have to get my thinking cap on and decide what I can add to the product in the shape of a OTO.

    Here’s one for all you current BLB users – What would you like to see provided that isn’t already included with the software, and if you downloaded the software for free, would you pay extra for any of these:

    Training videos
    Support
    Resale Rights Products
    Help setting up the opt-in pages

    Or anything else you can think of?

  4. Amin says:

    Hi Dan

    I paid real money for the Boomerang List Builder so I think I’m in a position to comment fairly.

    Giving away value now in return for future expectations (which is what you’re asking about) is a form of investing.

    So my view is this: if you spend every penny you earn, keep selling the software. If you save, or invest anything for the future then give it away and put a good sales funnel in place.

    I think we all know the benefit of investing in our future, but not everyone does it. Personally I don’t see much difference between that and this particular question.

    The other thing you could do is give away a functional version of BLB, but offer the enhanced version as an OTO. That’s also a popular tactic.

    Amin

    • Dan says:

      Hi Amin,
      All people that paid for the BLB would be looked after if I did go down the free route, so don’t worry about that 🙂

      I’m actually a saver, but…..I’m from Yorkshire, and I’m a farmer, so no surprises there 🙂

      The Basic/Pro suggestion seems a popular one – give away the Basic and charge for the Pro version. There are a few new features we could add, so it’s given me yet more food for thought…as if I needed anymore!

      Thanks for the comment, and thanks for reading.

      Regards,
      Dan

  5. Daniël says:

    Boomerang is IMO a great product, and getting rid of its price tag, you would likely devaluate it.

    Once devaluated, what then would be the value of giving it as a bonus?

    Givng free product as a bonus doesn’t sort the effect you want.

    So far my 2 cents.

    Daniël

    • Dan says:

      Hi Daniel,
      I think that would be true if price = quality, but in the IM world unfortunately it doesn’t…there’s some real crap that you can get your hands on for $1,000+ and one of my most valuable marketing tools is free – WordPress.

      But I can see what you mean, if started to give it away people may not appreciate the product as much, if they download something for free they are more likely to download for the sake of it, rather than taking time to actually find out about the software, and see it’s value.

  6. Terry says:

    Well I too paid the full $47 for BLB and from a customer point of view, it would leave a bitter taste in my mouth for a merchant to see everyone getting something for free that I had to pay for.

    However, from a business point of view as a merchant or internet marketer, I know the money is in the list if properly monitized.

    So, my vote… give away, build and monitize the huge targeted list you’re building. You know what your list is interested in, and there are so many list building reports, software, ebooks and such to offer your list on the backend to profit from.

    • Dan says:

      Hi Terry,
      All people that paid for the BLB would be looked after if I did go down the free route, so don’t worry about that 🙂

      Thanks for the comment, so far it seems to be a pretty even split between giving away and charging.

  7. Morning Dan,

    Like many business decisions, as you are obviously aware, ROI is the key to decision making.

    In this instant you’re going to “invest” roughly ten grand or just over $800 a month. Anecdotal reports commonly value a list subscription at $1 per month per subscriber. Your mileage may vary. Based on this you’ll have to gain about 800 subscribers per month to stay even–in monetary terms–goodwill aside…

    One advantage you may have with BLB is that its a proven product with demonstrated value, not just a piece of quickly thrown together “list bait”.

    Should you decide to turn it into a “list builder” stress that aspect and the evergreen nature of the product. List building is essential to success in many aspects of IM.

    Prospects that know the quality of your work are more likely to come back for seconds, and thirds, and…

    Elmer

    • Dan says:

      G’day Elmer,
      The PlanetSMS email you write is proving popular, so thanks again for that 🙂

      And thanks for a sensible comment regarding the ROI, I think a lot of time we forget about regular business practice and just take a punt on something without thinking it through properly.

      I’ll take a closer look at the numbers and see how it all stacks up!

      Cheers,
      Dan

      P.S. Apologies for the G’day, Paula just pointed out you aren’t Australian – my formula must be broken:

      [code]< ?PHP if 'wears hat'; then $nationality = 'Australian'; else $nationality = "other" ?>[/code]

      • G’day back at you Dan,

        No problem.

        Actually I’m the American issue of Brit parents. 🙂

        My surname is, however, more common in Australia than in the U.K.

        I wonder what that says?

        Back to business. You would only need approximately 800 new subscribers at a buck a month to replace your 10K. On occasion I’m mathematically challenged.

        • Dan says:

          You are an A* maths student compared to me, last week I was joining a forum and they had one of those anti-spam verification things where they ask you a simple maths question……I got the answer wrong 🙂

  8. Clyde says:

    Dan,
    I had not heard of Boomerang before the RRF prelaunch. Had I heard of it I would have gladly paid the price. It is worth the investment.

    This is difficult for me as I am just starting and am giving away and selling. I think perhaps you should develop something else to give away as it does not make good sense to me to give away your premier product. Maybe add some new functions to the exisiting product, as you suggested above, and give away what you have now with the added functions/training/support as the upgrade OTO.

    Just my thoughts. BTW I am not a fan of RB but the therory seems to work. I just don’t like being forced into anything, especially when what I want to get is supposed to be free.

    • Dan (el_passo) says:

      Another mention of the RB thing, someone needs to tell me what it stands for so I can reply 🙂

      Thanks for the comment, if I could think of another idea that’s as good as the BLB then I could keep the BLB as a paid item, but thinking of the product is the tricky part!

  9. Lee says:

    Hi,
    What to do?? As a customer and user of BLB I am naturally biased toward the selling side of the problem. After all, I hate to see anyone get for free what I paid for.

    However, I guess it comes down to the issue of will the increased revenue of the profit funnel that the free BLB set up off set the lost income from the sale of the software?

    Thanks for an interesting post and good software.

    Lee McPherron

    • Dan (el_passo) says:

      Hi Lee,
      All people that paid for the BLB would be looked after if I did go down the free route, so don’t worry about that 🙂

      Thanks for the comment,
      Dan

  10. Dan says:

    Just a quick note to everyone that has paid full price – don’t worry, if I do decide to go down the free route, I’ll make sure I sort something out for you so you don’t miss out on anything!

    I do like the idea of giving away the current version, but then having a “pumped up” version on sale as the OTO. There are a few cool new features that have been suggested so there could be some mileage in them…

  11. Pat Graham says:

    Hi, Dan…I think your answer boils down to whether or not you can afford losing the $10,000 a month while waiting to see if your list builds and returns more income. It’s all about money and you don’t know how many on your new list additions will unsubscribe.

    IMHO, I think you should keep your prime product prime and not devalue it or raise negative opinions from all the rest who paid for it.

    While your reasoning for giving it away is a good one and very popular on the Web, it might benefit you more to trade on your impeccable reputation and create another quality product and give that away.

    That’s what I think…Pat Graham

    • Dan (el_passo) says:

      Hi Pat,
      Hows things going in your new(ish) part of the world?

      Thanks for the comment – it was received load and clear 🙂

      • Pat Graham says:

        Still trying to find my stuff in boxes I packed and clearly labeled that make no sense now. Moving is total hell.

        It seems like you have a wide variety of opinions here. I don’t know what RB is either.

        Pat

  12. Justin Case says:

    Hi Dan,

    Nice blog post as are most of yours. You do a very nice job mate.

    I think giving something away if fine, if you have something you can gain business wise. That is capitalize on down the road. I nice backend offer in your case might work well. And goodwill is certainly not something to be sneezed at either.

    Giving something away today to make a sale tomorrow is not a bad thing. If the Freebie was/is of value the customer will trust you and your product so much the more.

    Thanks again for the nice informative information.

    • Dan (el_passo) says:

      Hi Justin,
      Glad you like the blog, I appreciate the comments!

      I think the backend would be key and would need a lot of thought, there’d be no point in giving away the main item for free if the backend items had just been thrown together in 5 minutes, the key would be to provide something that complements the software and improves it in some way.

      And is that your real name, because if it is you have the coolest name ever 🙂

  13. Ferdinand says:

    Hi Dan,

    As a beginner, I wouldn’t trade a proven seller with a list that could be dominated by freebie-seekers.

    However, by giving the BLB away, I think that you can build a really big A-list eventually since your subscribers will be better list-builders.

    RB has the Digital Repoman which disables products after refunds. Perhaps you can use it and make your give-away exclusive to loyal subscribers.

    An upgraded and paid version, not subject to this condition, should also be available.

    Thanks for your messages.

    • Dan (el_passo) says:

      Someone really needs to tell me what RB stands for 🙂

      The BLB does have something similar already in it that allows me to remotely disable any copies that are refunded or obtained from a….less than desireable source.

      Thanks for your comments, always apprecited…even if it is taking me ages to reply to them, hehe 🙂

  14. Bob Marconi says:

    Isn’t giving away something free what most folks do? I agree you should do so if you are building your list.

    But it needs to be something of ‘real’ value, something one can and will really use.

    Most give away reports, most of which have information I’ve already seen/used/disposed of.

    Dan, you have something ‘unique’ which most would probably use if given the chance. Give it away, if building your list is the objective.

    • Dan (el_passo) says:

      Hi Bob,
      I think that’s why the BLB could be successful as a freebie, I honestly believe it could be on of the top marketing freebies out there.

      I know I’m biased but it’s of much, much more use to marketers than some 10 page PDF report stuffed with countless affiliate links.

  15. Tony says:

    Hi Dan,

    I’m fairly new at this IM business. However, I have seen a lot over the last year and a bit. I use your Boomerang and I’ve joined RRF.

    I do subscribe to the list-building philosophy. But I’m thinking about leverage. If someone submits their e-mail, get them to volunteer their friends’ e-mail addresses also. Along the lines of “Who else do you think could benefit from “The Boomerang”…..” Hey, you could really score on some people if they have a lot of friends.

    Just my 2 cents. Incidentally, I appreciate your posts and your software. Thanks Dan.

    Have a Great Day!

    Tony.

    • Dan (el_passo) says:

      Hi Tony,
      Glad you like the posts 🙂

      The tell a friend idea isn’t really something I’ve ever used, mainly because of the “spamming” issue, but there are scripts out there that allow you to obtain free stuff by telling x number of friends about something.

      So yet more things for me to consider!

  16. My vote? Why not keep doing what you’re doing right now?

    Keep the product on sale and from time to time grant giveaway rights to specific marketers that have a solid product launch planned with an obvious tie-in to the BLB.

    (In other words, you wouldn’t just allow every marketer on the block to give away free copies of your software – it would have to for a part of their overall list building strategies)

    • Dan (el_passo) says:

      Hi Marvin,
      Another good suggestion, my problem would be keeping track of the new launches that are coming up.

      I’m pretty rubbish when it comes to the big launches, I only tend to notice them if the product owner contacts me directly, but you are right – what I’m doing has been proven to work, so why not keep doing it!

  17. Jim G says:

    Two things come to mind….”the money is in the list” and…..”viral marketing”.
    Building a large list (targeted) and worldwide branding seems to be a positive method to construct a long term business.

  18. Ken. says:

    After all that, no one told you about Russell Brunsom’s latest ‘free’ product 😉 As everyone who is ‘anyone’ is promoting it, it’s strange that you haven’t heard of it then Dan.

    As a full time farmer, how do you find the time for all your Marketing Work?

    • Dan says:

      To be honest I’m not really on anyones mailing list, so I tend to miss out on these things…I guess that’s why I have time to do a bit of farming as well – I haven’t got hundreds of emails to read through everyday.

      So my time saving tip of the day – don’t read marketers emails…..unless it’s come from me of course, LOL!

  19. Anu says:

    My thoughts

    1) I wouldn’t give it away for free unless there’s a clear alternate back end that you expect will be MORE profitable. Yes, it’s nice to build a list; but unless the list can be monetized better, a bird in hand…

    2) What I would do, is probably test it out on a small scale.
    > Maybe run a contest, with a “free” copy as a prize; that way, you give out a controlled number of free copies, while still aiming to build your list. This wouldn’t devalue your product as being a “free” product.

    > Or build a different list, with a limited giveaway run.

    > Or even – if you could have a light / defeatured version for the free giveaway (conventional, yes, but it works).

    • Dan says:

      Hi Anu,
      Thanks for the contribution, how are you doing with your hosting coupons site?

      I know of a site you could add to the list 😉

      • Anu says:

        Thanks for the encouragement. Early days yet; while there are probably half a dozen other hosts that I could add, I’m going slow; would rather build the site / traffic first…

  20. Wayne Cochrtane says:

    Hello Dan!

    I appreciate your dilemma! I have been considering this myself with my own products. But I now feel that giving away your most valuable product is not the best way to go. Most people do not value free gifts. (I had very clear evidence of this several years ago when I tried to give away thousands of homegrown fruit trees that I was unable to plant on my farm due to drought and fires.
    I attempted to give them away and advertised so on the local radio – no takers. After I put a price on them and advertised again I was so busy selling trees that I did not have time for anything else. I made thousands of dollars selling trees that I had unsuccessfully tried to give away! And as I care for the trees I am now reluctant to give any away as by selling them I dramatically increase the chances of finding people who will actually care for them.) I have also found that freebie seekers are much more likely to neglect things. (I have masses of free stuff sitting forgotten in my hard drive. But then again I have lots of paid stuff sitting neglected on my hard drive too.) (And when I was working as a Natural Health Practitioner it was the people who were broke and couldn’t pay me for my hands-on work that were the ones who not only did not value my free gift of help but who also failed to take action to improve heir lives. [And they were also the ones who took more of my time .])
    As a case in point I am one of the people who joined your list to get your software free and as yet I have not used it (But I will ! I an just starting to build my websites now.) And so far you have not earned any money from me.

    If you give away the product that other people have paid for you risk alienating some of those already established customers. And of how much real monetary value is a list of people who only joined to get something free? Many of those people will give an email address that they seldom use or unsusbscribe soon after or they will be resistant to spending money.

    As for the tell-a-friend suggestion, it is not as good as it sounds. Many people who do not have enough of the required “friends” who are interested in internet marketting will become resentful for not being able to receive the free stuff. And some people will just give fake email addresses or other addresses of their own that they do not use.

    My recommendation: put out a “lite” version free as “linkbait” and a VERY CLEARLY SUPERIOR version as an upsell. (Not necessarily as an OTO – OTO’s have many disadvantages! A limited time offer in my opinion is much better than an OTO! [OTO’s alienate many potential customers!]
    Many software sellers have fallen into the trap of being seen as FREE software providers because the free version is too useful and too few people see the need to upgrade to the premium product (AVG Antivirus is a classic example of this. Some free software providers have recently tried to reverse their positioning starting to charge for the software but it is very difficult to get people to pay for something they are in the habit of having free and they tend to becdome
    But you need to be very clear up front that the lite version does have the limitations that it does.
    And be upfront about encouraging the upgrade to the premium version. People do not like being built up and getting excited about their free gift only to then discover that it is fatally flawed and not very useful. They may become resentful and distrusting (I do!). It is also very important that the free version is actually useful and does not appear vto have been deliberately crippled to try and force people to buy the upsell. This is another very common tactical mistake that many software providers make. This often results in dissatisfied and critical ex-prospective-customers.

    Phew! This was intended to be just a brieh comment. I could go on and on but I better finish up!

    So my recommendation. IF you wish to use BLB as an incentive to increase the size of you email list wait until you have the MUCH improved version as an upsell. And perhaps increase the benefit to you of giving it away by ralso equiring retweeting or following you on Twitter or something similiar. Be very clear to yourself and your website visitors that the free lite version is valuable and that you need something in return. Be careful to maintain the value AND the percived value!
    (Using a coupon system may also be something that could be used to increase the perceived value if done well. Or require that customers agree to give feedback and agree to receive your questions about their use and opionion of the product. And make it clear that they will receive benefit from staying on your email list, Twitter following etc to recive future free updates to the software etc.)

    Well my 2 cents worth has become a bit inflated!

    Good luck with which ever way you choose to go Dan!

    Wayne

    P.S: I would love to know which plugin it is you are using to have the replies to specific comments grouped together on your blog. Works really well! Is it “Nested Comments” or? Do you know what it is called and where I could find it? WordPress.org?

    P.P.S: I have not included a website URL in the box as None of my sites have any real content as yet.

    P.P.P.S: I have a Gravatar account and a Gravatar but I don’t understand how to add it to your blog so I will have to remain visually anonymous.

    P.P.P.P.S: You can say g’day to me, I am Australian. And as a fellow (born and bred fifth generation) farmer I have serious challenges spending most of my life now siamesed to my computer!

    • Dan says:

      Hi Paul,
      That sounds like the problems we have with kittens, we have loads of kittens each year and offer to give them away to a good home but we have very few, if any takers, so we are left with a farm full of cats! Maybe this time we can try selling them 🙂

      I didn’t use any plugin to get the threaded comments, they come ready to go in WordPress…think it’s 2.7 onwards, but your theme will probably need to be modified if it’s an old one, if you check the theme designers site you may be able to find something. If not, come back here and I’ll see if I can find the code I use on this blog.

      I see you got the gravatar working 🙂 As long as you enter the email address associated with the gravatar when posting your pic should show up.

      It sounds like you need a laptop, then you could take it round the sheep with you – multi-tasking to the extreme! LOL!

  21. Debra Nally says:

    I say go with the basic for free and sell the pro version, best of both worlds!!

    • Dan says:

      Hi Debra,
      I think that’s looking like the most sensible option so far – I guess the next step is to ask people what they’d like to see in a “Pro” version….that can be something for next weeks blog post maybe 🙂

  22. Michelle says:

    Hi Dan
    I’m in favour of the free give away.
    The email’s are what allows us to progress in this business.
    The potential of a good harvest far out ways any one product.
    I dont see it as devaluing the product its more about
    leverage of future prospects.

    Thats my two pence worth.

  23. Hi Dan

    I got BLB as a Socrates subscriber and have used it as part of the RRF Video 1 list building strategy.

    I believe you sell BLB for USD47 so if you give it away for free in return for a subscribtion, the subscription would need to be worth more than USD47 over a period of time, I guess, to make business sense. As far as alienating people who have actually purchased the product, I think that would depend on the individual. I bought Paula Brett’s Operation eBook yet this was later given away in JT’s Masterclass of which I am a member – no great shakes for me, but others may feel different.

    All the best – Keith

  24. Harry says:

    Hi,

    Most of of what one needs to know is ‘out there’ and freely available. Unfortunately this information is often burried deep in the T&C’s &/or the ‘help pages’ of places such as Google / Clickbank / Aweber etc.

    There is (I believe) both a market and considerable merit/professional reputation to be earned in providing such inforamtion in a useable and readily understandable format.

    How should those such as yourself be rewarded for their efforts & enterprise ?

    Many of those involved in internet marketing make only pennies (dont surevys suggest the average is less than $1000 pa?).

    With this in mind I would suggest the ‘free model’ is the best option in the hope that the those who achieve some success would be willing to invest their profits in more advanced products, that you, as a trusted source, might offer them to take them to the next level.

    Harry

  25. Peggy Baron says:

    Well, since you asked… I’m casting my vote for the use BLB on the backend and create something else (related) to give away for free. It’s already a proven moneymaker for you and can make you even more if you sell it on the backside of a freebie.

    Cheers,
    Peggy

  26. Dan says:

    Here’s an idea for you all…as a backend product IF I were to give the BLB away for free.

    Would you be interested in a PLR licence where we rebarnded the actual BLB software with new interface and a name of your choice, could use it to target any niche you wanted, not just marketers.

  27. Hi Dan,

    this sounds like a great option to me

    Here’s an idea for you all…as a backend product IF I were to give the BLB away for free.

    Would you be interested in a PLR licence where we rebarnded the actual BLB software with new interface and a name of your choice, could use it to target any niche you wanted, not just marketers.

Speak Your Mind

Please do feel free to leave a comment, I read them all...

and oh, I'm sure you don't look like a monster, so why not go get a free gravatar so a pic can be displayed with your comment!