Free a 4 letter word

Is Free a 4 Letter Word?

When is using the word FREE bad?

I was reading Greg Ciotti’s post on copyblogger.com: The 5 Most Persuasive Words in the English Language; and was hit with the notion that  Free has become a bad word.

Ciotti puts the word FREE as the 2nd most persuasive word, right behind the word YOU.

The post sites a study by Dan Ariely where people had to choose between a Lindor Truffle and a Hershey Kiss at 2 price points. The percentages below indicate how many people purchased the item, and how much they were willing to pay.

Free candy1

 

Then they dropped both prices by $.01 and look what happens…

 

Free candy2

Free wins right? Not in the service business. If your customer doesn’t see value, FREE only makes things worse. If you are selling Title Insurance or Real Estate; free can get you undervalued, disrespected, or ignored altogether.

For years I hosted free CE classes for Realtors. I also helped dozens of Realtors put on free workshops about every topic under the sun. What we found was interesting, while we thought that a free event would attract more people, it was the wrong type of customer.

Have you ever heard the expression; if it’s free, I’ll take 3? Welcome to service based free events. People don’t care what it is; they don’t want to miss out and if there is no risk involved to register, they will. They will evaluate the offer later. Charging for events allow your customers to pre-screen themselves. If they see value and are willing to invest both time and money, they will register.

Free often means that anyone can do it. The subliminal message here is that nothing important is in an offer you don’t pay for. Feel FREE to register and if you can make it great, if not, I’m sure you have other important things to do.

In my CE Class example, if I offer a superior topic that producing Realtors (my target audience) would like to learn about and charge a fee to attend, they are likely to register and show up.

Most non-producing Realtors would not register because they had to pay upfront. They are not doing any business to apply that information, so why waste the money.

So I started charging for classes, and something interesting happened. I found that if I charged a small amount even $5 or $10 per class, the caliber of Realtor increased along with my attendance ratios. In other words, I had fewer cancellations and fewer no-shows when I charged for a class than if I gave it away.

Charging for classes also helped me focus on the content of the class. I knew that I couldn’t charge for lousy class. I had to bring value in order to have agents sign up for the class. If the topic wasn’t very good, I wasn’t going to get people to sign up for the class. I had to make sure the classes brought value.

Having a high caliber topic attracted a better caliber of agent. In surveying the Realtors that came to the class, they didn’t care about the cost, they wanted the information. The $5 or $10 that they were paying was worth it for the info, in some cases; I actually donated this money to charity. They were happy to pay and felt good about where the money was going.

In full disclosure, my classes were smaller in size. However, my conversions were higher because it contained a higher percentage of my target audience. I also saved time having to weed out the potential customers that were going to waste my time.

There are times and places for FREE in your sales funnel, just don’t have them right before you make your sales pitch.

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