On Monday, Naomi Dunford of IttyBiz announced that it was time to start Act Two of her business. According to Naomi, Act Two will be about “less selling and more giving.” In the first act of Naomi’s business (to continue using her metaphor) she made a lot of money. And now, she get’s to give more sh*t away. (Sorry, but a post about Naomi requires some swearing – it’s practically the law.)
I love this idea because it flips the conventional wisdom of free on its head.
A lot of internet marketing teaches us to give stuff away for free early on in order to establish our reputation. A free e-book here, a free pattern or tutorial there. After you’ve built your reputation, the theory goes, then you can start charging a lot for your products and services.
But what kind of reputation are you really building?
If you’re giving stuff away for free*, then it’s probably a reputation of someone whose stuff isn’t worth valuing.
*Semantics note: When I talk about giving stuff away for free, I’m not just talking about stuff that costs nothing. When you sell products at a price that doesn’t cover your materials, time, and labor, just to keep the price low, you’re basically giving stuff away for free.
There are a lot of problems with the give stuff away for free, make money later strategy. The first, as I mentioned earlier, is that it gives the impression that your products (and ultimately you) aren’t really valuable.
The second is that the money may never come. Look at all the social media companies who made services available for free, and are still trying to figure out how to make a profit.
The third, and the one I think is most likely to occur in a crafts business, is that is undercharging often leads to burn out. The frustration of barely making ends meet, of never having enough money, of not taking care of yourself first often leads to the end of the business before you’ve reached the point where you can raise your prices and actually make some money.
Not that Naomi’s model isn’t without its challenges. To make it work, you have to be completely awesome. You have to provide your customers with amazing. (I was going to write amazing value or amazing quality or amazing design, but the truth is that you just have to provide amazing, period.)
I’ve been reading Delivering Happiness
But here’s the secret must of us don’t want to believe. You can be completely awesome too. You have talent and vision and skill, and you can create things that will not only delight and amaze your customers, but can make you some serious money in the process.
The other advantage is that when, like Naomi, you’ve made the kind of money you were dreaming about and then start to give stuff away for free, no one questions your motives. When you give stuff away for free early on in your business, it’s a marketing ploy. When you give stuff away later, you’re just generous.
I’m not saying you should be a stingy miser at the early stages of your business. If giving things away makes you happy, do it. But if you’re giving things away as a marketing strategy or because you think it will lead to riches down the road, I’d encourage you to rethink your strategy.
After all, in Naomi’s business model, you get to get rich and give away awesomeness. Now that’s the kind of business I’m aiming for.
Oh no, just the day I’ve published a free PDF pattern! Well, not really my own, an extract from a vintage pattern, but still. I thought people might want to see what my tutorials look like and if the instructions are clear, before buying one. Like a free sample. I guess I did it backwards.
Laura, I don’t think there’s anything wrong with the occasional free pattern or tutorial or what-have-you. After all, it’s not as if Naomi never gave away anything or had no- or low-cost products.
But she NEVER undervalued her services, and I think that’s what Megan is cautioning against. The free stuff, if you use it all, should be an occasional bonus for your best customers or new customers or something, not par-for-the-course.
Also, I think undervaluing your products/services/yourself is WORSE than giving away free stuff! That’s the worst kind of “free.” I’m still working on some of my prices, and its amazing how much better I feel about selling things once they are at a fair price. And guess what? My customers like them more, too.
Thanks Megan for another great post on thinking about something from a different perspective. 🙂
nice info.
Here is the best sites make money online.
Plz click my profile,view and join now.
Good day to you.
I found this article really interesting. I have been teetering on the edge of selling my original prints online. I’ve been hesitating because when I look at what other printmakers are charging for their prints online some are so cheap I wonder if I will get any sales at all. And since my work is also in galleries I’m duty bound not to drop my prices for internet sales if I don’t want to shoot myself in the foot and lose my gallery outlets.
I think that this is a fascinating issue… there are a pros and cons of both models, but I do think that in essence the solution is balance, baby, balance.
The two “officially” free products I give away are quite small (doesn’t mean that they didn’t take for-evah to create, but are instead, concise) and they serve very particular purposes.
I have, as of last week begun giving away a small, free PDF package – a guide – with every new membership/newsletter subscription. This goes hand in hand with a thanks-for-being-family discount that I give in-store to local customers.
The other freebie is flagship material. I.e: a guide as well, but a clear statement of what our business stands for (It’s called the 5 Ps of Creativity). It’s basically how customers/audience members work out whether they’re part of the tribe, and a way of making them feel awesome about it if they are.
However, as I’ve said – these are tiny in comparison to the info products that we actually sell for cash. A miniscule fraction of the content (although still extremely informative). I like to think of them as like a sample of brie that you might get at the markets in front of a cheese stall before you decide to commit to buying a whole wheel…
However, having said this – you know, our blogs and newsletters are freebies in and of themselves. And these take extraordinary amounts of time and energy to produce. If I weighed up the ROI on the effort I poured into these two things, I’d be a little miffed, I think. Part of it has to do with love, trust & savvy: love of my audience, trust that giving away good quality content will pay off in the long-run, and the savvy to make sure your paid products are properly priced and appropriately positioned.
Thank you for sharing this interesting post with us.