Friday, July 03, 2009

Business Musings: The freebee dilemma

I've been kind of out of SL for a while, or perhaps being rather casual about it thanks to a lot of RL stuff, but I'm trying to get back into it and I stumbled onto a fantastic business blog, by Todd Borst. One of the articles I've read while trying to catch up (because seriously, its awesome stuff.) is one regarding the practice of giving away freebees and the troubles associated with it.

I agree with a lot of what he said in the article, but I had a few thoughts of my own.

To summarise it for those who want to go read it in depth later (and I highly recommend it), the article identifies the main reasons why freebees exist, which can be distilled into three primary motivators:
1) Generosity - Creator does not feel content should be paid for and just wants people to enjoy their creation
2) Animosity - Creator does not feel that content should be sold period and tries to usurp a market by providing a free alternative.
3) Marketing - A content creator provides a freebee to promote a new product and get some word of mouth advertising, as well as keep people signed up to groups and so forth.

The problem is mostly with number 3, and it backlashes the creator more so than the other two. Why? For a couple of reasons:

1) It builds a culture of entitlement (particularly if you give away a product you actually intend to sell)
2) People come to have a certain expectation, and if the expectations aren't met, they get cranky.

But freebees can be such a potent selling tool, how do you give away free stuff without creating an expectation that can come back and munch your ass (not to mention cap your IMs with complaints)?

Well I had a few thoughts after reading the article. Getting back into writing, I thought I'd share them here.

Some people give away a product they intend to sell as a freebee release perk to group members. This isn't such a great idea because people will try nine ways to sunday to try to scam into the group or build the expectation that by joining the group, they will get pretty much everything new you make for free. But having an incentive to be part of a group is a really good plan, since with limited group space, sometimes people have to make some serious decisions. Not to mention having other people tout your new product around is good marketing! The thought that immediately came to mind is don't give away 'freebees', give away prizes!

The word 'freebee' really has a lot of negative conotations. It devalues the worth of something, however a prize is usually something that is earned or won that has value. Saying "I won this!" immediately creates certain expectations within people, a certain envy, and a certain interest in keeping up with the joneses. Plus the eventish aspect to it can attract new people to a store over a period of time. Release parties are a good way to get people into your stores and can attract people to join your group. Particularly if you are holding a raffle or something of that nature. Getting people in your store to see your items and other promotional tools such as midnight madness vendors, or lucky chairs or other such things might also encourage them to come back later.

If you do decide to give away a freebee, to either create an attraction to your store, or give something you may want to use as a permanent promotional item, make sure that it meets a few conditions.

The first is that it remains free. No matter what. Its not going to be sold ever or hasn't been sold before. Turning old stuff into freebees pisses off customers who paid good money. Don't retire merchandise as freebees, it just leaves a very bad taste in people's mouths.

The second is that it is very different than any current product. Either a totally different type of product, or so significantly different that its impossible for anyone to mistake it as something you've sold. For example, I've got several freebees that are tattoos. I don't sell tattoos, period. My products are avatars, clothing, and eyes. But it gives people a chance to see the quality of my products, which is mostly what freebees are about. A sample. A taste to whet the appetite. Not a free lunch.

The third is that, if you are going to put out freebees, if you do it regularly, people will come to expect it. This isn't such a bad thing if you can do it. But if you can't, try not to be too regular about it. Keep it irratic enough that people don't expect X freebee to be avaliable at the beginning of the month. If you did, but can't anymore, make sure you make it EXTREMELY clear to the group or store people that you've discontinued your freebee program, but you will still likely get a lot of complaints.

If you have a way of tracking who buys a freebee from either a box or vendor, you can use that information to invite them to a group, which allows you to grow your marketing group base. Some people won't accept the invite of course, but a lot will. Especially if you provide tangible benefits such as prizes or event invitations. If you want to have a regularish release for 'gifts' for your patrons, holidays are also good times of the year to target, particularly holidays.

Giveaways/release giveaways I've seen work without too much trouble:
- Trivia game to the group
- Raffle using all the names of the people who were in the group as of X day.
- Party, if you show up, there is a prize ball and some promotional give away items like prize chairs and the like.

Add your ideas!

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