A continuation from last week's episode, in which I introduced Chris Anderson's latest book, 'Free: The Future of a Radical Price'. I challenged you to come up with ideas on how you could use the idea of a 'free' price point to generate new revenue for your business.

Wild West or Structured Market?

You might expect the idea of a 'free' price point to drive markets into total disarray and confusion, and to some extent you'd be correct. One only has to look at the movie and music industries to see the monumental struggles between agents, performers and producers.

That said, Chris Anderson proposes some 'rules of thumb' for dealing with this new world.

If the 'product' is digital, then it's only a matter of time before somebody provides it free of charge.

Given that this is the case, claim first mover advantage and get there before your competition - what can you make free today?

The quality argument doesn't work anymore. I really like music and I can tell the difference between an old fashioned record (black, round and spinning), a CD and an MP3 file. The fact is though that MP3 has won the day. People will put up with (i.e. no longer care about) the lower quality sound, because of all the advantages it gives them - portability, instant gratification, etc. Standing in the corner yelling, "But I'm higher quality" will get you nowhere.

The idea of having stuff for nothing is so strong now that even off-line businesses incorporate it into their marketing. Think of all those 'free' airline and rail tickets. Are they truly free? Of course not, you end up paying somewhere else along the line, otherwise these physical businesses would simply cease to exist.

It is possible to make money from 'free stuff'. Think of the things people will pay for. Look around you and you'll see plenty of examples of people paying to save time or increase their status. Somewhere in there is an opportunity for you.

If free is a real threat to you, move your profit generation somewhere else. For example, look at the money EasyJet and Ryanair make from selling you sandwiches, drinks, hotel rooms, car hire, in fact anything that surrounds their core business of flying people from A to B.

If it really is costing you peanuts to deliver something, then why bother charging for it? The 'cost plus' model in the on-line world is dead. Look at value added instead.

When some stuff becomes free, other stuff becomes more valuable. Chris Anderson describes this as "value migrating upwards". Your challenge is to find where it's migrated to and move your chargeable services to that place.

The cost of doing things on-line is falling so fast, that it's quite possible to test ideas cheaply and quickly. If they work, fine, make a proper plan and invest more. If they fail, you've learned the lesson cheaply and don't need to invest anymore. On-line testing is getting bigger every day and I believe there is huge potential here.

How can you use free?

My challenge last week was for you to come up with ideas as to how you could use 'free' in your business. Here's some examples from the software industry, with potential twists for the speaking market.

Free for an initial period
Commonly used by the software industry with the "30 day free trial" model. Could you transfer it to your coaching business, for example? I don't see why not, just requires a bit of imagination, that's all.

Reduced set of features
Standard features delivered f.o.c. and you have to pay for advanced features. Maybe a little trickier to apply directly to information businesses. However, if you invest time creating systems and models for explaining your material, it becomes easier to break out chargeable and free features.

Limited number of seats totally free
We're all used to early bird pricing for off-line conferences, but how about offering (say) the first 50 seats to your next webinar totally free?

Limited to particular types of customer
Again, commonly used by the software industry - companies under a certain age or turnover threshold get the software free. Could you apply this to your webinars? Sure, of course you could.

You might think some of these ideas are crazy and maybe they are - but there are two important points to make:

• You don't really know whether these are crazy ideas or not and in truth, neither do I

• It's so cheap and easy to test these ideas that you can just go ahead and do it. Whatever the result you'll have found out something really valuable. You'll either have a runaway success on your hands, or you'll know that you no longer have to worry about whether such-and-such would work, because it didn't

Free is here to stay - capitalise on the opportunities it brings you.

That's it folks for this week - as usual, your comments welcomed and appreciated, particularly with reference as to what you'd like to hear about. I do get quite a few emails by the way, and I read them all, so please don't feel shy about getting in contact.

Best wishes for the coming week.

Chris Davidson
Editor, Professional Speakers Journal
editor@professionalspeakersjournal.com