Can you make a profit by selling your product or service for free?
It could seem something astonishing, but it is 100% possible. As it did ‘Vistaprint’. In 1999, Vistaprint entered the printing market when the printing industry was already saturated. But they competed with the other tech giants with a magnificent marketing strategy. As you can order 250 colourful Business cards from Vistaprint for totally free. Only have to provide a shipping charge of around 5.67dollers, whereas you could have to pay 85-300 dollars if you order from another company. But there is the magnificent business strategy that you only have to select among their 40 fixed designs, and the delivery time will be three weeks. But if you want to customize your design and express delivery, you have to pay extra charges. With this simple strategy, around 17 million people used their services in 2009, only ten years after the starting of the company.
Similarly, Amazon does an enjoyable Promotional activity with free shipping. If you buy a book from Amazon and buy an extra one with that, Amazon will provide free shipping. It is available in every country except France. In France, the shipping charge is nearly 1 franc, almost the same as 20 cents. As a result, sales increased in all the countries except France. Though the amount is so tiny, it has dramatically affected their decision-making. And this is called the ‘Happiness Hypothesis’ in neuromarketing. In fact, we greatly overvalue free things a lot.
The happiness Hypothesis works in 2 different ways
- Free things make people happy.
- Free things affect the human’s decision-makingProcess
For example, Grammarly
While typing, Grammarly will correct you automatically and shows you the correct one. Even you don’t need to type the correct one, just by one click, you can fix it. But if you want to check the plagiarism, you must take the paid version. For providing you with free service and you are happy with their service, so if you need to check the plagiarism, then you will choose Grammarly compared to other software. And that is the fact that Grammarly wants.
How to Convert Free Customers to Paid Customers?
Traditional Premium Model
To convert the free customer to paid customs, you must maintain some sub-border and, most importantly, make the infrastructure ready. As we know, Dropbox and Mega are good cloud services, but we mainly use Google drive. Till 2021 google photos provide unlimited storage and 15 GB for each account, and their synchronization is solid. Now, if you want more storage, you have to upgrade by paying. And this is called Traditional Premium Model.
Say otherwise, we can play mobile games for free, but there are many ads which are embarrassing. If you want to get rid of it, you simply have to take a premium subscription.
Another one is the ‘Ecosystem Model’
In this model, we downland games and other apps from the play store for free. But the developers are paying to get a place in this Market place. And the developers are getting money by Mirco-transaction. The symbiotic relationship between the play store and developers is called the Ecosystem Model.
Will This Model Always Work?
If the infrastructure is not good, the Free premium model will not succeed, like ‘Baremetrics’. They got a large number of customers in a short time. But they had too much user acquisition in such a short period that their current infrastructure could not take so much pressure. As a result, their service quality drops a lot. They needed to be able to deliver appropriately whereas the delivery becomes too late. As a result, customer satisfaction decreased a lot.