The Free Economy: Why It’s Making Everything More Expensive

by Mack Collier

Over the past several years as publishing and content creation tools have flourished, so has the idea that anything free is inherently better or at least more desired than content or tools that cost money.  Whether you are an individual or company looking to make a name for yourself, the path is pretty linear: Create gobs of free content or give users free usage of your tool, and eventually they will want to pay you for your content or tool.

Until, they don’t.

For years, this sort of freemium model was successful: Provide limited and free access, then when people saw the value of your content/tool, charge them money for additional access and features.  But over the last couple of years, I’ve noticed a disturbing trend among my peers and networks.  People will stay with a tool or content creator as long as their content/tool is free, but as soon as they ask for money, most people jump off and look for another free source.  There’s so many sources of information that the thinking seems to be that someone else will offer better functionality at a free price.  Or instead of paying this writer $9.99 for their ebook, I can get the same information for free from blogs.

Too often, the most important attribute assigned to online content or tools is that they be free.  Free = better in the minds of many.

Here’s an example: My modest newsletter is now up to 1,000 subscribers.  I publish a new issue every week or so, and the newsletter is designed to give subscribers information they can use to better create engagement around their digital marketing efforts and create fans of their brand.  All for free.  Yet every 4th or 5th issue (often I will publish this as an additional issue for that week), I will use the newsletter to directly promote a product or service I offer.  Many people do this with every newsletter issue they publish, but I like to do it about 20-25% of the time.  Typically when I publish a newsletter issue, I will have 1 or 2 people unsubscribe, on average.  But every time I publish a newsletter issue where I am trying to directly sell to my subscribers, the number of unsubscribes always spikes, typically it’s 500% or more higher than the average issue.  The people that unsubscribed left as soon as I asked for the sale.  In other words, they were willing to take and use my content as long as I was providing value for them, at absolutely no cost to them.  But the second they saw an ‘ad’, they left.

It’s not just content, any of you that conduct regular meetings for organizations such as the AMA or Social Media Club have seen the same thing.  If the meetings are free, attendance is high, but when you begin charging even a few dollars, attendance falls off a cliff.

The thinking seems to be that if your offering isn’t free, you can’t compete.  Which means that if there are more free options, there are also more bad options.  And we all spend more time trying to figure out which free option is the best, without realizing that the additional time is costing us more than paying a few dollars for a valuable service or piece of content.

You don’t become an expert by reading an expert’s blog.  You become an expert the same way they did; By doing stuff.  I’ll let you in on a secret: I’m not writing this blog to teach you how to become an expert, I’m writing this blog to establish *my* expertise in social media marketing, online community building and marketing strategy, so you will hire me.  Sure, some people will be able to read my posts here, follow my instructions and launch a brand ambassador program for their company.  But what I hope happens is that a company would read my posts, realize how much time and money it would cost that company to launch a brand ambassador program itself, and instead hire me to do it for them.  I get paid, they save time and money.

I’m not sure what the answer is, but what I fear happens is you have a lot of very smart individuals and startups that throw in the towel because they can’t make money on a product or content by giving it away for free.  For instance, consider the plugins on your blog, how many are you paying for?  Are you paying for any of them?  I have about 30 plugins, and only pay for two of them.  In both cases, I wanted a plugin that did specific things, and couldn’t find a free version that did, so I paid for the services I wanted.

Many of us bemoan the glut of content being created these days.  Everyone is creating content and it’s all the same.  But it’s also (mostly) free.  We complain about how Twitter or Facebook isn’t working right, how the sites run too many ads, yet we forget that we aren’t paying a penny to use either service.

Nothing is truly free and I think we need to realize that if we aren’t paying for content or a tool on the front-end, there is a cost in terms of time, diminished experience, etc on the back-end.  The myth of the free lunch is just that.

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