List-Building Strategy: Free Download vs. Paid Debate – Part 1


I did the unthinkable.

Last week I bought a report for $7. Yes, I actually paid money for a 30-page (PDF) download. And I did it without a lot of thinking or the expectation that the report ought to have been free.

And because I paid for it (even if it was just $7), I found myself more motivated to actually read it. Hmmm… is there some hidden psychology going on here?

Change of Mind?
As a vocal advocate of the “law” of Free Download/Signup, which states that “a fair exchange exists when a visitor trades their e-mail address for desired information (e.g., report, eBook, white paper),” stepping into the Paid Download camp was a bit of a counter-cultural experience.

This quote on the home page made me a buyer:

“Anyone who’s not serious enough about their marketing efforts in 2010 to invest $7 into this report isn’t going to take the time to use the methods laid out in the report anyway.”

Would a pitch like this work for me? Or you?

Now that I’ve read the report I’m questioning why I’ve worked so hard to give away my content when I could have/should have been charging for it. Yeah, I know I’d be passing up all those people who won’t pay for anything, but I wonder if my analytics actually prove that FREE converts my prospects more effectively than PAID.

For B2B marketers like you and me, are we guilty of assuming FREE always trumps PAID without confirming it with our own data?

Experiment – Join me
So… I’ve decided to follow the advice in this $7 Report, use the included software and run a couple experiments to see what happens. God knows I already have the analytics for my Free offers. All I have to do now is see how many people actually pay for the content I gave away free yesterday. I’ll let you know how it goes in Part 2 of this debate.

If you’re wrestling with this same issue (like I am), I invite you to join me in this journey. Buy the $7 Report, like I did, and get started.

[Caveat: If the $7 Report website has too much hype for your taste, do what I did. Ignore it. Learning about the mechanics and getting the software that make it possible—and seemingly straightforward—to offer a paid download is well worth the money.]

Free Prize Inside*
I also got something else for my $7 purchase. Something that was worth way more than $7. In fact, it’s something I bet the author doesn’t recognize as valuable.

Hidden on page 9 of the Installation Guide (of all places) is this incredibly useful illustration of how all the pieces come together to make it possible for you to offer paid reports to your customers and prospects. Albeit a simplistic illustration—essentially a version of The Customer Ascension Model (a euphemism for “sales funnel”)—I just hadn’t seen it before.

The diagram shows the linkage between your Sales Page, your Giveaway (if any), your “Squeeze Page,” etc. all the way through to your download page. And if a diagram isn’t enough, pages 10-18 provide further detail. It’s well done and as I said, a very nice Free Prize Inside.

Free Prize bottom Line: If you need to make a pitch to your management or a client (or maybe you’re just curious) about charging for your Reports and eBooks, you’ll want this report, the software and the diagram.

*A “free prize inside” is like buying Cracker Jacks for the free prize inside the box (see Seth Godin’s book, Free Prize Inside…excellent read if you haven’t already).

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Filed under: Marketing
  • http://www.chrometa.com Brett Owens

    OK well here’s one more data point, I just bought the report myself :)

    Not sure if this is a case of curiosity killing the cat – I was too intrigued after reading your post. Now I’m wondering if I would have given this report the same attention if it were free – I’m not sure I would.

    Anyway it’s neatly saved on my desktop, for close reading this weekend. Looking forward to it, and then will likely weigh back in.

  • John Fox

    @Brett: That’s the psychology I’m talking about. At some price, as a buyer, I’m both curious to learn more because of the implied value AND not thrown off-course because of the price. The FREE model can’t compete with this, can it?

    I don’t know if $7 is the universal threshold either, but Don Morris, the author, makes the case in the Report that it is.

  • Brenda Taylor

    So if I catch your drift, you’re saying that because something has a price attached to it, visitors are going to value it more and therefore, anyone who buys my report is qualifying themselves as a future customer?

    But if, as a visitor, I’m expecting to get something for free for completing a registration form (as a fair trade for my email address), then won’t you lose me because you’re requiring me to pay for it?

    I mean, I can see your point, but it just seems that we’re all caught in a tidal wave of visitor-expectations and we can’t get in its way.

    Maybe my company is unique, but my boss would throw a fit if I had gave him “fewer” leads than the same number or more. I understand your point, but I KNOW our sales reps would rather have 100 junk leads than a handful of qualified leads.

    Love to know what others think.

  • John Fox

    @Brenda: You make 2 very valid points.

    1) Like most things, it does boil down to managing expectations. My only point is that it just seems like a good time for all of us B2B marketers to be running some experiments to determine if it’s true for each of our own visitors. Let’s face it, buyers of high-temperature thermocouples probably don’t qualify vendors in the same way buyers of IT services. Why assume that your buyers behave the same way others do?

    2) As far as your company’s management, you’re talking about a clash of culture as well as falling victim to the notion that it’s better to have a 100 email addresses (which may not be ‘real’) vs. a handful who have at least plopped down a few dollars to get your content/advice/report, etc. (and with it, a valid email address!). As I’ve said, I don’t know what the outcome will be for me (or for you). It just seems like it’s time to figure it out.

    One side note from personal experience.

    While it has nothing to do with the purchase of B2B products and services, it does go to the notion of human behavior placing more value on what’s bought vs. what’s free.

    When I first arrived on campus at University of Illinois as a freshman, class registration was a long, time-consuming process of waiting in lines to sign up for courses and pay your tuition. It took hours. Bad memories.

    But one thing I recall is that as all of us made our way out the door, we we’re bombarded by students trying to get us to sign up for their clubs. One guy stopped me to ask if I’d be interested in attending a Bible Study on the book of John. I guess I looked interested because he continued through his script to get my name and campus address.

    Then he said, “John, that’s great. Glad you’ll be attending. Here’s your New Testament. That’ll be $1. If you don’t have money with you, you can bring it to our first meeting.”

    I was a little stunned when I heard that I had to actually pay for something I was expecting to get for free. I mean, the Gideons have been giving away New Testaments for years. Why did I have to pay for it?

    To which he replied, “We make people pay for it because we’ve found that if students pay for their Bibles (even though it’s just one dollar), they actually show up. If we give it away, they don’t.”

    Hmmmm…. wonder if that’s still true today. At least for my business, I’m going to find out.

  • http://www.chrometa.com Brett Owens

    Just read the report – fascinating! Something I’m going to try for sure with some side projects I have going.

    I can see this strategy being very applicable to an information marketer. I’m not sure if it’d work that well in a pure B2B lead gen setting – but in fairness the author doesn’t make any promises that it will.

    The ease of the affiliate setup is also very interesting and seems to be the key to the whole affiliate piece.

    John, please keep us posted on progress from your end!

  • http://www.JoeCoates.com Joe Coates

    While I haven’t tested this personally, the first time I heard the idea was on a Glazer Kennedy Inner Circle monthly cd from Andrew Lock (at the time he was famous for using eBay for Lead Generation, now he is making a splash with his “Help, My Business S*ck*” video show). Andrew made a persuasive argument that charging as little as $2 was enough to segment a potential buyer from a serial free info downloader.

    Looking forward to Part 2 of the post to find out what John learns from his experiment.

  • John Fox

    @Joe Coates: Appreciate the reference to Dan Kennedy and Bill Glazer. You must be very well-read. As you may know, The Customer Ascension Model I mentioned in my post (above) is a phrase first coined by Glazer-Kennedy.

  • http://www.MarketingPlanGuide.com John Hunt

    John – there is an incredible book written on this very subject by Dan Ariely, a Professor of Behavioral Economics at M.I.T.
    He has a bunch of case studies as to how pricing psychology affects how people respond.

    You can get used copies for under 10 bucks at Amazon. Here is the link:
    http://amzn.to/bwRGnX

    We have been testing both free and paid download options. The final metric you need to look at ultimately is Customer Aquisition Cost .

    John Hunt
    MarketingPlanGuide.com

  • John Fox

    @John Hunt: Hey, great find. I just order the book. From the Amazon preview I could tell it will unlock of unknowns for me. Thanks for passing along your find to all of us who are still trying to unlock our buyer’s unique behavior.

  • http://7dollartools.com Don Morris

    @John Hunt: Thanks, I just bought it myself. (Gotta love 1-Click and the Kindle app.) Another item you might be interested in is “Free,” by Chris Anderson. He and I are kinda on the same side, the low-/no-cost side, of information publishing.

    BTW, the software included with $7 Secrets can be used to give away your product, too.

  • John Fox

    @Don Morris, et al: Besides the giveaway option Don mentioned, the script has a mechanism for making a “one-time offer” only to those people who purchased your first (“front-end”) product. I’m looking forward to trying that out in the next week or so. I especially like the fact that you can give away your “front-end” product and then offer (in marketing terms) an upsell to the one-time offer. Very nice script. Good documentation, which I mentioned is worth the $7 on its own, just for the illustration.

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  • http://www.breakingnewsinn.com muneeb

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  • John Fox

    Thanks!