Don't Give Away the Cow - Just a Small Milk Sample

Your mother always told you to never give the milk away for free – make him buy the cow. The concept was simple – you are valuable. As soon as you are free, you are no longer valuable. This theory applies in the business world as well. While the subject matter is a little less sensitive, the point is the same. If your services or products are free, why would I ever pay for them?

This was a very real challenge that Skype faced when its revenue model wasn’t producing as promised. When the company wanted to try and generate dollars, users cried foul. The service had for too long been available for free among registered users. And now that other companies were more readily offering business VoIP, Skype wasn’t the only game in town. For some, it was a matter of principle and it was worth jumping ship.

For the business owner tempted to give away products or services for free to try to entice the customer, this strategy only works when carefully planned and executed. If not, it could be the downfall of the business. Nextiva, a business VoIP provider, recently published a blog on the topic. Let’s take a look at the guidelines they share for giving it away in business.

The Practice Field – it’s not uncommon to want to give the product away to garner knowledge, gain feedback and earn references and even experience. Many companies do this as a part of their key strategy for growth. In fact, the knowledge and information gathered at this stage is worth much more that the revenue given up by giving away the product or service for free. It is the time to practice, to correct and to come back with perfection.

Gaining Status – depending upon the field in which you compete, there may be opportunities to improve your status, credibility or leverage in a meaningful way. For instance, offering your product as a set with a known brand leader for a specific period of time is a great way to gain more value in the market. That company is also likely to advertise your product on their website and in other marketing materials.

Bonuses and Intros – your customers may not be ready to try your new product hot off the assembly line if they have to purchase it, no matter how much they like your brand. But, if you offer it as a free sample, they may be more apt to give it a whirl. Free samples are a staple of the grocery and makeup aisles of your favorite stores. The reason we see them so often is because they work.

In the world of business VoIP, these same guidelines apply. For the new brand, it may be tough to penetrate the market. But with a proven strategy and some key guidelines, success may be just around the corner.