October 2, 2009 201 Comments

The Audacity of Free

free sign When you run conferences, everyone wants in for free. It’s understandable. Times are tough and people don’t have as much money. I’m running Inbound Marketing Summit in a few days, and it’s not free. The ticket price is $695 to attend (unless you know @dmscott, @justinlevy, or a few other people, who have codes for VIP discounts).

Otherwise, you’ve gotta shell out to get in.

The venue, Gillette Stadium, is home to the New England Patriots. They charge me money to be there. The food costs me money. The power, the booth construction, all that stuff. This is simple, right? It’s a transaction. I ask people for something, and they tell me how much it will cost. Sometimes, I get a discount if I buy in bulk.

Where things get harder to understand are when they are intangible.

My friend Justin Kownacki wrote about this yesterday.

The sense of walking into somewhere and listening to sage words doesn’t seem like it should cost money. I understand this. It’s just sound moving through the air to your ears, right?

Let’s move the discussion away from what it costs to make a conference, and let’s talk about value overall, and what we need to consider

The Audacity of Free

There Are Costs to Things – Information is write once, repeat forever, but there are costs to things like time, presence, access, etc. Real costs, not just assumed ones.

Some Costs Help Gate – Seth Godin just wrote the other day about what if Craigslist cost $1 a post, and he was spot on. It would cut down annoyance. Darren Rowse just launched Problogger.com for really cheap (too cheap, if you ask me), and there’s a reason for this. Paying something for a service or good helps us value it more. Christopher Penn and Whitney Hoffman and I decided to charge money to attend PodCamp Boston, because that made people commit to showing up. They weren’t willing to walk away from their investment, and that ensured our attendance numbers would be accurate.

Free Makes It Harder to Charge Money Later – There’s a great post in Entrepreneur magazine pitting Chris Anderson (Free) against Jason Fried (37 Signals), and I agreed with what Fried had to say on the matter. Free can cause wild growth, but is that the real goal? See also Raul’s post on free for more ideas.

Free Encourages Waste – Permit me a moment of sour grapes. I volunteered to attend and speak at an event recently. I paid money to book a flight and hotel, so not only didn’t I charge a speaking fee, but I paid for the privilege of helping this event attract an audience. They chose to move the event (hey, I run conferences: this happens), but forgot to contact ME about it. I’m out money because I did something for free. Do you think this makes me feel inclined to do that again? (hint: no).

Charge For Value, for Gating, for Your Needs

I charge what I’m worth to speak and to consult with companies. My agency charges for the work we perform for clients (and we’re less expensive than most). Wiley charges for Trust Agents because they have tons of costs behind it (remember: I make like $1.40 a book).

Don’t ever feel embarrassed to charge for value. Never apologize that something costs money if you’ve determined the value of it.

Sometimes free is a promotional matter, a loss leader, the chance to build some buzz, but sometimes, we get confused on how that works, too. When companies send something for free, they’re hoping that you’re so moved by trying the thing that you’ll be motivated to tell others if it’s worth it. That’s in their marketing budget. They expect that.

I’ve been running a promotion since August that trades values. I made a deal where if someone bought 200 copies of Trust Agents, I’d speak for 1/2 day for free. When those sold out, I made the same deal for 300 copies (still 1 of those deals left). In doing this, I give up my speaking fee (which is much more than the cost of the books), but I do so because it’s a chance that those 200 or 300 books will get into the hands of people who might be able to use the ideas, and also into the hands of a select few who’ll want me to speak professionally or consult or work with my agency.

Free can be a wonderful thing, and there are some really great things that are (and should be) free. But free is a choice, and it’s not your buyers who decide this, no matter what we like to think in social media kumbaya-ville. Free is beautiful, and costs are part of life.

Photo credit Koka Sexton

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  • http://twitter.com/chrislorenz Chris Lorenz

    Hey Chris! I was “the other Chris” at the Chapman U #broganoc talk (the guy with the red cross t-shirt). Though it was awesome that the event was free, I agree that charging for things that add value is something that has to be done. Time is money and if you are adding something of value to other people's lives there is no reason to feel that you shouldn't be paid for it.

    There was an interesting article on AdAge about Kraft's Iphone app that kind of touches on this as well.

    http://adage.com/digital/article?article_id=139372

    Anyway, hope all is well and thanks again for all of your hard work!

    @chrislorenz :)

  • http://www.tricitypsychology.com/blog Kathy

    Great post Chris. We access so much for “free” on the Internet that the boundaries can become blurred. Many years ago in another existence as a struggling illustrator I undervalued and undersold my services in the mistaken belief that it would bring me more work. In fact what I was doing was creating the expectation that my time wasn't worth more . Lessons learned.
    I now manage a psychology practice, contrary to the belief that may exist , even here people want free – or to try before they buy! When clients believe you deliver value, that you can help them reach their goal you don't have to buy them with discounts or free services. That's not to say that pro-bono work does not have its place…. but its not used as a marketing stategy.

  • http://biggsuccess.com georgekrueger

    “Sometimes free is a promotional matter, a loss leader, the chance to build some buzz”

    Brilliant Mr. Brogan! If it doesn't generate leads which convert to buyers, stop that activity and try another one. Companies give away samples for a reason. There should be a purpose to our “freebies” if the point is to make money. And we all have bills to pay. Thanks for the reminder!

  • beley

    Thank you, thank you, thank you.

    I don't mind paying to go to conferences. I don't mind paying for products or services. In fact, I'd rather pay for them because a) I think that I get more value when someone's being compensated for what they're doing and b) I like supporting people and companies that provide value.

  • http://www.kherize5.com Suzanne Vara

    Chris

    Brilliant as always. I think that free is good in certain forums however in others I think it almost goes to trust. Why are they giving this away for free, will they give me all the information I will need? I also see it as diminishing the value in what you have to offer. No-one wakes up and says today I will work for free (unless of course they are at a soup kitchen, charitable affair,etc). People asking for you to cut prices for them is becoming more and more the norm. Reality, this is the cost and if you cannot afford it then sorry you cannot afford it. I am done beating myself up over deciding to reduce costs and trying to work with people.

    As a small company I have started charging for proposals. Too much time was being spent on them and getting no real return. I have cut out those that were looking for ideas and moved over to those that are serious about working together. Those looking for the free advice, I send over to my blog as there is enough free on there to get them started.

    It is not the fault of clients or anyone that I have bills to pay and a child to raise however me paying these bills and earning a living benefits them.

  • http://www.patrickokeefe.com/ Patrick O'Keefe

    Great post Chris. I totally agree.

  • http://blog.sellsiusrealestate.com/ jfsellsius

    Thanks Stephen for mentioning pro bono services. I have been advocating it for the real estate profession: http://bit.ly/sr8Uk

    Certainly agree with you, Chris. Also agree with the other Chris (Anderson) that Free is not “a” business model (his title implies free is a business model, but it's not the essence of the book). Free can be “part of” a business model and he cites examples how to use free to make money.

    You could make your conference free if others (vendors, advertisers, Starbucks) paid to be there. Just my 2.5 cents.

  • http://askohdoctah.com Ohdoctah

    Everyone wants something for nothing.. until it comes time for them to request payment. GREAT post. In short the price of an event doesn’t matter.. if you can afford it go.. if not stay home. Regardless of the price the most important questions are:

    What did you learn? & who did you connect with? If you can answer those questions with excitement then its worth cost. Knowledge and relationships are priceless.

  • http://twitter.com/RevelnConsults RevelnConsulting

    Great post Chris!

    Thanks for sharing your book/conference model. I was curious on how you handled travel, expense, speaking fees ever since I met you over a year ago at a Tweetup with a small, but quality group in the Detroit area just before you presented at an IT based event. (That tweetup group, btw, is now over 100+ in attendance, last I knew.)

    There might be something here that goes with the free, pro-bono/volunteer work for doing something new or emergent such as a new angle to doing work, a new community of professional forming, etc. This could be connected to the idea of the life cycle of an organization – Adizes is a reference – has a model on his website http://www.adizes.com/)

    “What’s in it for me?” is not a self-interested question — as charging a fair, experience-based price for helpful work is the stuff of maintaining a healthy network of colleagues and reputation, quality, credibility, and ethics…etc.

    Regarding your book and your referral to Covey, he also built his 7 Habits Business using the work of others, as is said my many in my field of organization development. I have a pair of dusty certification binders for teaching Covey 7 habits (paid by my employer at the time.) I never taught a single session. Ah well, it was a lesson learned from the consulting group at the time to get commitments before certification — and perhaps in the conference business — advance payments book purchase commitments, whatever works. Exchange of service in good faith seems to be part of the lesson. Thanks again, –Deb

    • http://chrisbrogan.com Chris Brogan

      You asked about my speaking, etc. Here’s how I manage it:

      *More and more, I have too many requests and not enough time (not a bad way to be, but I always feel bad when I have to say no).

      * I do some small percentage of free speaking, but mostly if it’s something where I can piggy back on another paid event, or if I can see a return on my larger goals.

      * Most of the time, I speak for a fee plus travel, and when I’m on such a trip, I try to put in a free event or two to give back.

      It all works out in the end. : )

  • http://www.TheFranchiseKing.com franpro

    Thank you, Chris…
    I am the King. (Until I get home, of course)

    JL

  • http://mikecane2008.wordpress.com/ Mike Cane
  • http://www.marketingmessageblog.com/ Stephanie Diamond

    Great post. With the advent of the internet, the notion exists that things that are easy to get, i.e. digital should be free. The person who provides valuable information or insight has to fight an uphill battle to have it perceived as carrying a high price. Three ways to value your products or services can be via the PERCEPTION of your brand, your ability to COMMUNICATE that value and your ability to DELIVER on your promises.

  • Networkaegis

    To paraphrase Shakespeare “for there is nothing either good or
    bad, but thinking makes it so”. This certainly applies to the concept of Free. While Jason Fried takes an opposing stance to Free in the Entrepreneur magazine article, his company uses a free month for the 37Signals product.

    This is Free done right. It doesn’t negate the value of the product, you know exactly what you will be charged if you don’t cancel before the end of the month trial. It does negate the sense of risk from the users perspective. The user gets to knock around the application for a month and determine if it scratches where they itch. It is a win/win for the vendor and the client.

    I couldn’t agree more with Chris when he points out folks don’t value free. They conference that moved didn’t feel the need to notify him of the move. They saw no value in him being there. Had they put up the speaking fee or even paid the travel expenses do you think they would have notified him immediately?

    Free is neither good nor evil, Free is a way to allow folks to sample our products and/or provide a way for us to promote our products. Free is what we make of it, Free can either help our businesses or hinder them. The answer lies in how we choose to use it.

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  • http://www.philsforum.com PhilWrzesinski

    Chris,
    Great post. So many thoughts come to mind. I have both been extremely successful with FREE and very disappointed with FREE (well, actually, discounts).

    Disappointment – I run a highly successful toy & baby product retail store. We often get customers asking for discounts. Every single time I say yes (which is rare) it comes back to bite me. For some reason those customers are the pickiest and also least respectful. And I believe a lot of that comes from the fact that since I was willing to discount – to devalue the product – they have less respect for me in the first place. I stopped doing it altogether two years ago and have actually seen our business grow and our problems decrease. There is a perceived value in everything and when you discount or give it away, it decreases that perceived value.

    On the other hand, my wife and I started a magazine for parents that is available free each month. Over 10,000 got picked up every month. It was advertising supported, and although not a huge money maker, it paid it’s bills and then some. It outgrew us and we sold it (for a free ad for my store each month). Three years later it is still viable and recognized community wide. They key was the content. It had great articles, relevant information, and the most comprehensive calendar of events.

    I think there are arguments on both side of this coin. It definitely depends on the goals of the business. For my wife and I, making money was not the primary goal of our magazine (although we did make money:-). Spreading information was. For my toy business, making money is the goal. And sometimes raising prices is the only way to create value.

    Right now I’m having my own internal free/fee debate for my latest venture of consulting/assisting indie retailers. I have a bunch of free articles with incredible value for which I could easily charge, but I also have a products section that I’m starting to load with more value-based, fee-based information. It will be interesting to see if the freebies offer enough value to convince people to buy the other products. Again, though, my goal is info first, speaking engagements next (for which it has already been successful), and ancillary income later. We’ll see how it works out.

    • http://chrisbrogan.com Chris Brogan

      Free awareness of your business is one thing. Free toys, not so much. I think it still makes sense. : )

  • Anonymous

    Yes but there are a number of issues. If you charge the question is: how much? And this is very complicated. The information gained from a conference can be gained from info products – and the ‘value’ of those is awfully difficult to decide.

    You can just ask people to pay what it is worth to them (having explained what it cost you). There is a discussion about this on Mark Silver’s blog. (It probably only works when there has been a chance to build a relationship ie. not info products for instance.)

    This is a bit difficult for me. My stuff is about health and I don’t think health should be confined to the wealthy.

  • http://detroit.fwix.com Jamie Favreau

    I have to agree with you on this. I am one of those people who is not in the position to pay for a conference but I will volunteer to work it because I have been working in the entertainment industry for the past six years and if I can’t go then I might as well volunteer and get some benefit from it.

    Free is NOT Free. It never is. That is like saying there is a “secret.” Does “secrets” and “free” really exist? Probably NOT… there is always a cost and someone is going to pay eventually in both cases.

    People complain when they get things for free and they act like mad people. I work in an arena and I have seen this up close and personal when they all want “bobbleheads.” Little do they know, that it would have been cheaper to just go to the store and buy one then get to the arena 2 hours early and spend twice as much money on a toy.

    Go figure. If I can’t afford something I ask the presenters if they need volunteers. Volunteering is worth it because you can still network and learn something in the process.

  • http://www.virtualitassistants.com/ Amber Whitener

    This is so true, a lot of times people don't appreciate it. :/

  • http://twitter.com/daver22 David Ramsay

    There is an alternate, everything is free provided you contribute to society as a whole, if you wish to opt out and not contribute then you should pay for that privilege.

  • Anonymous

    Long time ago, i forgot who, told me that it is a bad business, giving away for free what you make your living from. This seems to go against the grain of the world that, inundated with all sorts of “free” stuff, is starting to expects everything for free without even thinking about it. The problem with free is that the perceived worth is most often not equal to the value of the offering but to the price paid (hint 0).I don’t think it is valid to compare commodity to specialist services. Commodity is mostly offered for “free” as a marketing exercise that is intending to cover the actual cost elsewhere. Unless we are talking charity, giving your time for free is a bad idea as those that pay for your time may feel cheated. Even if you decide to offer time (speaking) in return for book promotion, it should not be the same service that you offer the paying customers. Giving time (or service) away for free does very little to promote the value of your time (or service). Honestly, it is better to double the price then reduce it to zero. ( i am exaggerating here of-course, it is a fine art, finding the right price that will give customers the satisfaction of the great value)

  • Anonymous

    Great post Chris, I’m glad to have found it (via Twitter)

    We’ve been discussing the same at our Northside Coffee Mornings community get-together each week – http://nscm.posterous.com The discussion was around speaking for free versus paid speaking: we determined that “free” obviously devalues what you are doing, and further more, can lead to letting your clients down. If you service clients for free, then go out of business, where does that leave your client? In the lurch, that’s where.

    Just this week in Sydney a free (sponsored by Adknowledge) event occurred attracting 100′s of attendees. I was following the hashtag #asm09 and noticed @trib asking about the quality of the content: http://twitter.com/hollingsworth/statuses/4464356542

    I suggested that being a free event might be detrimental to the quality of the content which led to some Tweets being exchanged whereby @problogger who you quote in your post signalled his frustration at free speaking enagements:
    http://twitter.com/problogger/statuses/4464910527

    Some of the discussion can be seen here:
    http://friendfeed.com/search?q=trib+hollingsworth+problogger

    A very timely post indeed – as you can see it’s on people’s minds from one side of the world to another :-)

    Thanks again for sharing, and as always, your posts generate healthy discussion amongst the comments from which I always benefit subscribing to (for free! ;-)

    Cheers,
    Tony Hollingsworth

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  • http://goodmorningamerica-bloggorhea.blogspot.com Dee

    Made me think of the old adage “nothing is free” Someone somewhere is paying. Even the air we breathe isn’t free.

  • http://www.riverwoodtechnologies.com Elizabeth Cottrell

    You’ve spoken an important message, Chris. It’s interesting that people do value what they are asked to pay for, and when professionals lower that price too much, they risk devaluing people’s perception of those products and services. The fascinating thing is that their customers may even start going elsewhere to someone who offers products/services with a higher perceived value. My husband saw this in the medical profession when patients would go to the city and pay twice as much to get medical services from specialists with the same credentials as the ones in their local hospital.

  • http://www.thefemmebots.com/wordpress Femmebot

    My mama always said, “Why would he buy the cow when he’s getting the milk for free?” Since I started working for myself, I have found that the dating rules work best when doing business with people.

    • http://chrisbrogan.com Chris Brogan

      You’re not wrong. : ) I talk about work like relationships all the time and it works every time. : )

  • http://twitter.com/mistressmia Mistress Mia

    This post made me smile for many reasons and brought to mind one of my fav. sayings “The only difference between a $50 whore and a $1500 whore is how she sees herself.” (of course you may like to replace “whore” with consultant). ;-)

    • http://chrisbrogan.com Chris Brogan

      Seems like the same word some days. : )

  • http://chrisbrogan.com Chris Brogan

    Ah, want to know the trick there? You got in for free with another 800 or so folks. In that audience were about 80 people who would gladly pay my fee. So, 90% of you weren't my paying audience, but 10% of you were prospects for the future, who might now hire me to speak professionally at their venue.

    Best of all worlds. : )

    • Anonymous

      Very true, love to see that reciprocality in business works! I am currently working on a fun hobby project that I am hoping to emulate the same give/receive mentality :)

      Have a great rest of the weekend!

    • http://www.blogworldexpo.com/ Rick Calvert

      Thanks for saying it Chris 8). Now I can just send people here when they ask for a free pass. In fact I already did =p

  • http://chrisbrogan.com Chris Brogan

    Great point to be made in that there are people doing charitable things, but what's the percentage of spammers in there?

  • http://chrisbrogan.com Chris Brogan

    I feel that way, but then I'm biased. : )

  • Anonymous

    Yup, spot on Chris.

    Presence, service, and a singular vision are all crucial reasons to charge a fee for a service. With Copper Project we charged a fee from day one (originally $99 for server license code), and we’ve been profitable and growing since 2002.

    While basecamp is a key competitor, I’m right behind Jason Fried on this one, but can’t help but envy the Zuckerbergs and Evan Williams of this world.

    Best of both worlds? Aaron Patzer of Mint.com, hey Aaron, give me a call?

  • http://twitter.com/xcaravanx Rebecca Wolkenstein

    I think posting this at all weakens your position. You should not have to justify charing for your time in any way shape or form.

  • http://onlinemediaanalyst.com/ Eric Melchor

    Chris, this is a great post, however, ‘Freemium’ seems to be the new biz model of the future. Just look at Freshbooks, Jott.com, Box.net, Dropbox and many other new businesses. In fact, my main competitor is giving his product away for free.

    Consumers have no problem paying $4.50 for a frappucino, but when it comes to products, especially digital products and consulting services, people want it for free.

    Eric
    http://www.onlinemediaanalyst.com

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  • http://erinweed.com/ Erin Weed

    Excellent post, Mr. Brogan. I am an educator in the field of women’s safety and violence prevention, and my sales team bumps into this a lot. Especially when businesses/people work in “save the world” sorts of issues, there seems to be an expectation for free. Professionals who work in good causes (not necessarily non-profits…who by the way, also need to somehow make money to thrive) have a guilty feeling about charging for their save-the-world work. As a result, many of these people are poor and unhappy, which makes them bitter and resentful of the very issue they hoped to solve through their life’s work. Kinda makes you wonder how many great accomplishments the world is missing out on, because too many people don’t feel the right to make any money while making a difference.

  • Anonymous

    This conversation is happening everywhere and it’s setting off a millions thoughts in my head. I blog to showcase my coaching services – but the more I get into developing these services, the more I see the limitations of free and so something is developing but I’m not quite sure what or how I would deliver it, but it’s coming…

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  • Anonymous

    “Memorable experiences are the ultimate scarce commodity.” That’s what I scribbled while driving, listening to Chris Anderson’s Free. As the marginal cost of digital distribution falls toward nothing, the marginal cost and the value of memorable experiences continues to climb. That’s why we charge for conferences, consulting, personal contact, and even initial meetings.

    Drawing the line between free and paid is a continuing discussion point for small businesses. Most recently, we had a great comment thread on what to do when a prospect stands you up. The first response? Never do a free consult. Maybe not practical in small towns, but certainly an interesting discussion.

  • http://twitter.com/CesarAbueg Cesar Abueg

    Gr8t article, this whole weekend at #izeafest, spawn in me to do what I need to do, get paid by the value I bring, kudos @Chrisbrogan

  • http://raincoaster.com/ raincoaster

    This is exactly the right time for this. Raul’s post started a cultural shift in Vancouver, and the reverberations have gone international (obviously, since you’ve picked it up). We do many things for free, and I just volunteered to liveblog the Surrey International Writers’ Conference for free, because I’ve been deeply involved in that conference for a decade or so, but we do, also, have livings to make. And at a certain point you say “you know what? I’m not Joe Blow Haircut Blogger. I’m a talented professional. And I charge for what I do.”

    and, yes, then the market tells you what it thinks of that. But that’s fair.

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  • Veronica

    Such a good point: “Free Encourages Waste.” It’s so true. Although Twitter has become a valuable marketing tool, think of all of the clutter and junk that is surrounding the few users who produce worthwhile content. I seriously doubt this would be the case if it were a paid service.

  • http://www.beyondthebuzz.com/ David Stanley

    Outstanding post Chris! Part of helping people is saving us from ourselves. If it doesn’t cost us something, we aren’t likely actually take action. It’s happened over and over when I offer people free consulting advice. One of the challenges in establishing consulting fees is to charge a fee they will pay, but make it enough that it’s hard to walk away from the advice.

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  • http://www.truemanity.com zionaetzion

    I worked on a company as a founding partner for free (believing that I would start getting compensated in the future.)

    This is also problematic because the others did not value the time or skills that I acquired and did far less than myself.

    I gave value over the expected and they did not meet goals that they themselves set!

  • http://www.truemanity.com zionaetzion

    The “cow” bit did it for me too.

    My husband was born on a kibbutz and his English was not good at one point.

    That did not stop him from doing and auction and for lack of better language skills he told a bidder that getting money out of her was like milking a COW!

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  • http://www.womenwisemarketing.com Kelly Watson | Womenwise Marketing

    I just did a recent post on a similar topic: why “free” hurts women in business. (I linked back here.)

    Personally, my favorite examples of perceived value are the promotions that get you to pay only a penny for something. Why not make it free? Because the psychology behind paying for it — even a penny — makes a big difference.

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