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  • Mar
    28

    Free! Is There an Online Business Model to $0.00?

    Chris Anderson, editor at WIRED magazine, wrote a very interesting article about ‘FREE’ being the new business model, online:

    http://www.wired.com/techbiz/it/magazine/16-03/ff_free

    After reading the article, it made me think about specific examples of how several Internet marketers make use of powerful freebies to build their online businesses…

    Yesterday, I’ve ordered Mike Filsaime’s best-selling software and home study course, Butterfly Marketing, which has been selling for $1,997 over the past 2 years. I’ve only paid for shipping and handling (s&h), and this is truly a very powerful freebie.

    The ‘catch’, you might ask? Well, in exchange for the valuable freebie he offers, Mike wants me to evaluate his new monthly newsletter subscription, and I am also getting the first issue for free.  The ‘catch’ is that I am automatically added to a continuity program (with my permission, of course). So this business model is banking on subscribers staying long enough to recoup your initial giveaways (which obviously cost more than the s&h).

    Let me give you another good example of this new ‘free’ business model…

    Online shoppers who can’t decide whether to pull the trigger on their next purchase may be surprised at a new alternative: an offer to get it free, and it is a new marketing method that relies on a web of business relationships to give consumers free goods, as long as they buy something else from a long list of well-known online stores.

    The idea comes from Trial-Pay, and Profits.CC adhered to this new business model, as from today.

    All three parties benefit with this new business model: the consumer gets a sizable and immediate discount on a purchase, advertisers find new long-term customers, and the merchant (in this case, Profits.CC) is more likely to complete a sale.

    Basically, I am offering site visitors an additional option of getting ANY of the 6 (six) video courses available at Profits.CC for no charge whatsoever (which normally sell for $27 each, with master resell rights), as long as they buy something else from a long list of well-known online stores.

    What are your views about ‘free’? Is there an online business model to $0.00? Are you considering to apply this new business model to your own e-business, in order to optimize your online sales? Please leave your comments at this blog.

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    2 Comments
 

2 responses to “Free! Is There an Online Business Model to $0.00?” RSS icon

  • Misato Katsuragi March 29th, 2009 at 04:58

    When I read this, which is also the article in the latest issue fo PPC Email Strategies Explained newsletter that I received, I couldn’t help but think “Huh??? What free business model”?

    Anything with strings attatched isn’t free. While even paying just the shipping and handling charges for something isn’t truly free either, I can half way understand why some people might thing that it is.

    But Chris even said that in addition to the shipping and handling, you would automatically be subscribed to Mike Filesame’s newsletter, and although the 1st issue might be free, it would be interesting to see just how much of a hassle and how many hoops someone might have to jump through to unsubscribe before getting billed for the 2nd issue.

    Now, this might not be the case with Mike F., but is a fairly common tactic that is used be others, and while even these marketers might cancel your subscription upon request, in order to stay within the law, it is not uncommon for many of them to make canceling a subscription as difficult a process as they can. I know. I have seen this happen way too many times.

    Free doesn’t mean getting something for shipping. Free doesn’t mean getting something only if you take out a subscription. The dictionary definition of ‘Free’ is “something that is given without asking for something in return”.

    People in internt marketign just love to play fast and loose with the word ‘Free’. It’s no wonder practically every spam filter out there flags messages with the word ‘Free’ as spam.

    Misato

  • Well, creating hassles for the customer to unsubscribe before getting billed is not in the merchant’s interest, because there is a common procedure with credit cards called “chargeback”, and the merchant is even charged $25 after the unauthorized transaction is reversed.
    The term “free” is being discussed here within the context of Free vs. Paid business models, and the question is: how do you make any business viable “without asking for something in return”? Do you keep asking your customers for “donations” after the transaction takes place? But that’s not a viable business model…

    Armando


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