Recently a friend of mine emailed me this question, “I’m going through paradigm shifts thinking about our association. We have a few choices on how we establish our revenue model… Based on what you have been exposed to with your OpenSource involvement, do you think the 100% free [model] is too creative? Is this somthing we should consider?”
Since his question was targeted at revenue models, which ultimately affects the services you offer, here was my response to his question. I’ll address him is Bob for the purpose of this article.
Bob,
Free is an interesting topic. Chris Anderson wrote a good book called “FREE, the future of a radical price” and in it he talks about the psychology of free and how it has driven social changes in history and how it has hurt some endeavors. I recommend you download the audio book if you have time to listen and you want to save some trees.
Bottom line, it’s very hard to go from a free service to a paid service. People understand price increases, but making the leap from nothing to something is huge. Having a low cost membership package as an entry point is much different than offering a free membership. You can raise the price of something or offer a next tier and people will adjust, but charging for something that starts out as free is much more challenging.
A free webinar, guide, report, video lesson, audio recording, or email newsletter can be used to build trust in preparation for the sale, but if the whole thing is free, then it’s much harder to get people to pay even the smallest amount.
If you’re association is going to be sponsorship supported then getting as many people on board as possible makes free a good option. If it’s going to member supported then at least a small fee needs to be part of the commitment mindset.
Content that you publish on your website serves as a marketing tool and as a way for you to communicate competency to your potential buyers. You’re public facing content should tell people what to do, not how to do it. If they want to tap into the value piece, then they have to be a paying member. That doesn’t mean you can’t throw some really meaty stuff out on the public side occasionally.
Make sense?
What do you think about free as a revenue model?
Tell me your thoughts in the comments below.
Charles McKeever
OpenSourceMarketer.com
Hi Chaz & Toff
I just want to say that I think that your presentations have taught me nearly as much about blogging in an the past hour as I have learnt in the last three months! I am impressed by their clarity and also the psychology of the selling techniques used.
However, I think that will not be calling upon the services that you offer inside of maybe a year or two, when maybe, I will have achieved something marketable (a book perhaps).
In the mean-time I will wish you every success while I hopefully get something ready for fruition and try to understand the hard way how it is possible to derive an income from a site.
Good luck in your endeavours.
NM
I’m glad to hear it Niftyone! We’ve got some interesting articles and interviews in the works, so stay tuned. Whatever path you decide to take, don’t wait to long to act on your ideas. I can say from personal experience, I would be much further along in my own business if I had just followed through on even one idea a long time ago. Don’t let uncertainty rob you of actually doing.