Every day we’re faced with free and I hate it… Marketers throw free around like it’s confetti. Consumers snap up free stuff because it’s free. But does free work? Does giving stuff away for free make you eventually buy stuff? No, generally not. I’ve often said that the majority of people that follow brands on Facebook do it not because they are supposed brand champions but purely because they are hoping to get something out of the engagement. Something free.
Why would you follow Nike , Gatorade or American Eagle on Facebook? Because of the cool videos? Because of the witty banter? Or maybe you’re all about new product launches? Engagement? No? Be honest. You just want to connect with your niche of people that wear Nike and American Eagle and drink Gatorade…
Ok, so pretend you’re the SMB or the competition. How do other companies compete when Nike, Gatorade and AE give stuff away for free? Do they just go ahead and break down and give away free stuff too? Predictable right? I think part of the reason why case studies on organizations that do it differently are written is because the majority of marketers and companies do it the same way over and over with predictably average results. We embrace and applaud being different and yet conversely, we choose nine times out of ten, to do it just like our competition. Why is that?
I remember asking a small business owner once why they kept advertising in magazines and newspapers when the results were so poor. Their answer was that they had no other options. They didn’t know what else to do, so they just kept doing what didn’t work. Thus, fighting free with free may seem like a good idea, in the end it is not a business model.
The value of free
The problem is we’re asking local SMB’s to compete with big brands who give stuff away for free all the time, by forcing them to give stuff away for free too. This ultimately leads to 2 things: 1) It’s costing them more than they can really afford or b) It’s not really having the same impact on the consumer as it would if it was coming from the big brand.
The over-reaching formula for big brands is to create awareness of new stuff by giving away free stuff and then use social networks to promote the promise of free while driving the notion of new. Does giving something away for free inflate the value of that new product or service? Uh no. It may create awareness of the brand, product or company but there is no value in free.
Unfortunately we’re chasing the long tail of free, we always have. The internet and the emergence of social networks have created an atmosphere of chasing free wherever it may be. Interesting thing though is that you get what you pay for, even when it’s free.
So how do you compete?
I had a friend of mine who recently asked me how is he supposed to make money blogging or creating good content- and this was after one of his friends mentioned that a monkey could write content… I asked him, why would someone pay for your content? What is the value proposition of your content? Is it so bad that you feel the only way to push it out is as free content? We have to eliminate the notion that our IP is not valuable and promote the aspect of content, products and services that are so valuable that people would indeed pay for them.
The internet and social have gone a long way to creating free platforms to access free content when in actuality most people would pay for it if the value of the content they wanted were implicit. The point- we have created free markets for free which is a flawed model right out of the blocks. Don’t give something away to sell something-you can’t compete with those that use that as a business model. So what’s the work around?
a) Value your content
b) Create valuable content
c) Focus on where that content can be valued
d) Create a market for your content that creates awareness of you, your brand and your company
Lastly, Pay attention to this interview by Andrew Keen of WPP CEO Sir Martin Sorrell. Very telling.