Many companies are tempted to offer their products or software to customers for free as a way to encourage them to make further purchase. Unfortunately, what many business owners fail to realize is that free does not always mean cheap. There are many disadvantages to taking this approach, several of which can result in your business actually losing profits. Before you decide to offer any products without cost, learn a little more about the potential benefits and the inevitable perils.
Why Companies Offer Free Products?
Most companies offer free software or products as a result of confusion about the potential benefits. This business practice does get your name out to more consumers, however, unless you are prepared to pay staff for marketing and support, your efforts may not pay off. In other cases, companies offer free software so their users can test it out to determine if it works for them before making a purchase. There are better and more efficient ways to spread the word and educate customers about its practicality.
Perils of Free Offers
Offering free software can be a major financial expense. It is not cheap to advertise your products, letting your customers know that they are available for free. To attract the right users, you still need to conduct market research, place ads, and engage with your target market. These tasks involve highly specialized knowledge, meaning that paying for the labor involved should not be cheap. You need your marketing and design experts to be at their peak performance whenever representing your brand, regardless of the cost of the final product.
In addition, providing support for free products is another major expense. The effort and financial cost that goes into the provision of free products is not a cheap cost. In many cases, companies are surprised to see exactly how much a free product costs in terms of marketing, advertising, and support.
Offering your software for free indefinitely can create major headaches, stress, and expenses for you. Instead, consider offering a free trial, limited to 30 or so days. This gives potential users a chance to try out the features of the software without increased effort from you. If they do not like the product by the end of the trial, they no longer have the rights to its use. There is no risk to the customer and no obligation on your part to offer maintenance or support. Alternatively, you could offer your software to customers in stages, with varying support levels associated with each payment package.
It is always tempting to offer a product for free to customers, in the hopes that it entices them to make further. Unfortunately, the effort and expense that goes into the provision of free software is often prohibitively expensive. Before you decide to make this offer to your new and returning customers, take a few moments to consider the very real cost to you of upgrade and support. Contact a reputable consulting company to learn more about the best ways to attract new customers without wasting effort on free software gimmicks.