Are You Giving Away Enough Free Stuff?

Are You Giving Away Enough Free Stuff?

I know, this sounds like monkey business. In a way, it is.

As consumers, we all have excuses to say no to a new product or service. It is too expensive, risky or complicated. They make me give them my credit card and fill out a complicated form. Or, I don’t want to deal with an annoying salesperson who keeps bugging me. What happens when you just make it free and leverage a freemium model?

MailChimp and The Monkey Show

There isn’t a better example of the power of freemium than MailChimp.

They allow you to play with their simple to use software for free. You get a lot of great value as you start out. Once the founders of MailChimp settled on a focus on email, they knew their target was the small businesses community.

With that specific community in mind, they said how can we get small business owners to use our software?

And, over time, if small business customers like it so much that they become willing to buy added features that can take their business to a new level. Get rid of the cost to try – and sample it forever for free. (or until you get 2,000 subscribers on your lists). MailChimp had a 150% increase in paying customers and a 650% increase in profit within a year of going freemium.

I started out using MailChimp for free for several years. When I started my marketing consulting business, I needed more capabilities from my email platform. Today I am a paying customer.

MailChimp and lots of other SAAS software companies use the freemium model by recognizing that once customers try their product, the cost and effort to switch makes it difficult to move to a new vendor. So companies like FreshBooks, Evernote, HootSuite, DropBox and plenty of others know the power of getting you to try their easier to use solutions.

According to Chris Anderson in his book FREE, the 5% rule means that 5% of your clients pay and 95% get a free benefit. But Chris always advices that you strive for a 10% conversion rate. (Chris’ book isn’t free but it is filled with great ideas)

Freemium for All

I think this freemium idea has power and potential for many other businesses outside of software.

Could you find a way to give away more samples or trial experiences for your brand?

Are you stuck in an old-school business model where you think getting paid for everything is the best approach? For many businesses, getting customers engaged through trial is a powerful way for you to build trust, confidence and an interest in spending money.

When you apply the freemium lens, you start thinking about the services you give customers and how you can work with them quickly to lower the barrier to entry. You are going to spend real dollars on all sorts of marketing, why can’t sampling or trial experiences be one of those costs?

In highly competitive markets, free can get customers in the door or on your website. Products and services that are experiential can greatly benefit from a chance to take a test drive.

  • If an accountant finds a potential client with a big upside, what happens if she agrees to do her taxes for free for one year without strings attached. If the client is happy, what is the lifetime value of that client? An accountant who is confident in their superior ability should selectively do free taxes for high-potential clients leads.
  • A company selling a new salty snack could approach ice cream shops and give away one free snack with each ice cream cone purchased during a 90-day promotion. The snack company gets the free product in the mouth of potential customers, and the ice cream shop gets a benefit of giving a gift of added value to clients.
  • A payroll company could offer a free service for businesses with less than ten employees. As a company grows, they pay a modest fee for 11-50 employees and then it keeps growing beyond that level. By hooking the small business early on, their getting clients used to their system and approach. And they can add premium features a la carte.
  • A trucking firm offers a free trial shipment for 30 days to help clients see how easy it is to work with them. If that trucking firm has a superior customer support staff and amazing follow up that is atypical; the trial allows the customer to sample the excellent service. Don’t tell them you have great service by running ads – give it away. Probably less expensive than ads.
  • Freemium with a social benefit? A restaurant could offer free meals on Monday evenings from 5-7 (when it is often very slow). The restaurant can ask for a donation to one of three non-profits that are 100% at the customer’s discretion. The benefit to the restaurant is both trial of their food but an emotional connection to a cause. Maybe this is an occasional promotion like the 1st Monday of every month.

If you looked at your product, service or brand through a freemium lens, what would happen? 

The easiest way to get 1 million people paying is to get 1 billion people using. Phil Libin, CEO of Evernote

A carefully crafted freemium strategy could take your business to a new level. Whether you sell bananas or buttons, I’m convinced there is some benefit in getting new customers a sample to try.

Want to discuss how this approach might be applied to your business? Call me at 919 720 0995 or email me at 

Photo by Jared Rice on  a free stock service called Unsplash



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