Don’t do it they said. You’ll damage the brand and reduce its value. People don’t trust free products. The list of reasons why you shouldn’t launch a free product is long. The scariest of course is “how will your company survive?”
But let’s image you answered the survival question and genuinely felt that your product could positively impact the world. The only thing between a noticeable change in the lives of small business owners and your product was letting them know you existed. It’s no small task, but it’s the biggest question in many entrepreneurs’ minds. How do I get my product in more hands? In many cases similar to ours, the answer is to give it to the people who can benefit the most.
There is psychology associated with the consumer’s interpretation of the word free. For instance, some may say: If it’s free, it can't be anything great. If it’s free, they are just trying to sell me something else. There’s always a catch. After years of seeing this scenario play out, we’re naturally skeptical of anyone wanting to give us something for free. The biggest obstacle you face when making the decision to give the public something free is establishing trust with the consumer. But people love free. They are attracted to it. For some it’s just curiosity. For others it’s a hope that this free offering solves a problem or acts as a small windfall. Others are merely happy if they get more then they expect out of the effort they put into getting the free product. The fewer the hoops, the lower the expectation. It’s this scenario that offers a company like Finagraph the greatest potential for success.
In my opinion, the word free should also be coupled with the word instant. We love to be rewarded for our effort. This instant gratification serves as the reward for our “trust in your free” offering. When I give you my email address, I should get something in return. The better the “something” is, the more likely I will be to continue giving you more information or be interested in other “paid” offerings. The company’s hope is that you will trust them enough to listen to other offers. Or even better, tell your friends about the delightful treasure you found hidden in the free pile.
A company’s value proposition is defined as the difference between your products perceived benefit and its perceived cost. The greater the benefit relative to the cost, the more value you’re offering your customers. In this case free has a low perception of adding value to your daily life. At Finagraph, we want to change that perception by giving you the best small business analysis tool in the world for free.
It’s this concept that makes our value proposition so compelling. Consumers of our free product are surprised by the amount of functionality and applicability they get. Surprise is good. Especially when we informed our current customer base that they would no longer by charged a monthly subscription. Immediately we saw a spike in users and witnessed chatter all across social channels. Current customers deepened their loyalty for our company, and became evangelists. Trust was being built by the minute. Our accounting customers liked that we took a stand for small business and were not afraid to show it.
It’s true that some free product fail to deliver value and are easily disregarded. The key to success is to remember the formula for value proposition. The benefit the receiver enjoys should impact his daily life in a positive way. The goal of free distribution is to build your brand and establish trust and credibility in the market. Money can only be attracted, not pursued. We believe our decision to move to a free product will have long term financial effects for everyone involved, particular our small business clients. Since our product is free for accountants and business owners, some may ask how we make money. We sell software to banks and other lenders which gives us the ability to provide our world-class tools to you. Additionally, we offer a few — completely optional — recommendations for the best tools to help your company succeed today.
The core notion of giving our product away is to change the world of small business. We are uniquely positioned to help and the best way we have found is to share the tools and knowledge we have. Giving away our product will be great because we add considerable value to the financial prosperity of accountants and business owners. Value they never expected from a free product.