Raising the Value of Free
SATURDAY 23RD JUNE 2018
We are all in the business of persuasion. Even if the products and services we are creating are free to customers, we are still selling, still trying to encourage customers to buy from us. I say "buy" because the process is actually the same as the one you would go through when, for example, deciding to buy a new pair of jeans.
Every ‘purchase’ you make has a cost/benefit exchange and the point at which you make a decision to buy is the point at which you believe the expected benefits of doing so, will exceed the expected costs (at least in that moment!) It’s easy to think of the costs in just money terms, but that would be a mistake, because costs also include the time and effort you put in.
Netflix CEO, Reed Hastings, recently said their greatest competition came from sleep! - a nod to the addictive nature of binge-watching TV, and recognition that Netflix isn’t just in competition with other TV channels and media sources, but the choice of not watching any TV or movies at all.
Your service costs therefore also include the ‘opportunity cost’ of your customers missing out on all the other things they could choose to use their time and energy on instead, including the option of doing nothing.
Let me draw you back to one of the first Desire Code blogs this year, which introduced the grid of “desire vs easy” (shown below), one of the fundamental principles of Desire Code. Making something easy to access is an essential ingredient, but if the service or product isn’t positioned as a desirable and valuable thing then the result is apathy - customers who can’t really be bothered, who will get round to it one day. Perhaps.
The problem with the barrier bashing scenario I referred to in my last blog, is that while we instinctively recognise the need to reduce customer resistance to participation, it only addresses one side of the equation. That is, we spend a lot of time making our thing cheap and easy, rather than making it desirable and worthwhile.
Better if we can present the case to our target audiences that the expected benefits are so overwhelmingly wonderful they will want to turn the earth over to get them. And I mean truly wonderful - actual benefits that real, emotional humans will actually want (rather than a long list of our KPIs, which I see A LOT!)
So if your product or service is free, talk about how good it is - to raise its perceived value, rather than how cheap and easy you made it - which does the opposite.
As an exercise, work out how much it costs to deliver your service. Add it all up - the venues, the staff, their training, the resources, the planning and monitoring. All of it. Then work out how much it costs per customer. If you offer your service for free, consider telling customers what it’s worth...
“Our smoke-free service is really successful, and delivered by our exceptional and highly-experienced team. It costs us £240 for each person we support, but we care about your health and we don’t want the cost to be a barrier for you, so we’re offering it to to you for free.”
“We are so confident you will love how great you feel on our fitness programme, that the first month is on us.”
“You bring your motivation, we’ll provide the rest.”
“This industry-leading course normally costs £180 per person, but we want you to enjoy it, and the opportunities it will bring you, so we made it free for you, but only if you commit to attending the full 3 days.”
These are just some money examples. When considering whether or not to ‘buy’ from you, customers will be looking for a wide range of clues that they are making the right decision. Over the coming weeks I’ll be suggesting even more clues you can give customers that raise their perceived value of what you provide, whether it’s free to them or not.