Lower Price or Give It Away for Free?
Written by Brandon Hull on September 4, 2008
Sales managers hate eroding value by giving things away for free. There’s good reason for that thinking: it doesn’t pay, literally, to give things of value away.
But there’s always the psychological aspect of selling.
Sales reps who are paid on volume, not on gross margin, don’t mind the idea of free, because they seem to inherently get the law of reciprocity (more articles here, here, and here on the subject). In the context of small-product sales, here’s one expert’s perspective on the power of free (video may be somewhat slow-loading, but it’s a good one at only three minutes).
The company that comes to my mind with this is Video Professor, where the company used to let you “try” their product for free, you only pay $6 for shipping and handling. Of course, you’re not really trying the product, you just bought it. Interestingly, the company only offers this via television commercials now. If you visit their website, it’s the 10-day trial concept they promote. Got to change things up from time to time, you know.
So what are your thoughts on this?
