When Yaro gives away his professional work product “Blog Profit Blueprints, people really respond. Look at me, for example; I never got around to starting a blog, I know I have important insights to share with others about accelerating business results. And I have this sense that I can share my merchant for hire insights in a blog profitably even though I’ve never done that before; but since I haven’t done it before I’m feeling really uncertain and I don’t want to squelch my valuable time. In fact I’ve put it off for years cause business was good enough. But inside I know that if I put my new pspopects aside and evote time to this it would be worthwhile.

And wow what an offer Yaro makes.

Red Hot Sizzing: The benefit of instant access to the steps and insights of an experienced professional blogger but more importantly Yaro sells to my underlying need to feel certain before undertaking a venture of considerable work and for my need to have access to new power through information.

I’m willing to bet that I ‘m not the only one responding this way to his offer.

But why shouldn’t Yaro make a $1 off of us even if half of us go away never to return?

Well what happens is that by giving it for free he exchanges those dollars for “invisible” benefits. Each transaction that he makes increases the confidence of the reader, (this only works because his product delivers, and then some and does so in a consistent professional and unique voice).

And he now will have 2 new and distinct benefits with his upsell products based on 2 fundamental dynamics. Lets take a quick look:

Number 1 dynamic is that his sample has created a good flavor and maybe even started an appetite to eat at his venue. Every reader can now feel more secure that products he sells must be top notch. This is called building credibility.

The number 2 dynamic is called reciprocity. Because he gave people good value for free, people feel more easily inclined to share with him. They relate to him more, and are prone to doing him a good turn. All that remains is for him to ask. So he asks for the sale.

Now the 2 benefits come into place, because of the reciprocity and the credibility that he fostered, people are not only more likely to purchase his product by an order of magnitude but are also much more willing to pay a higher price for it! (and to do so with less deliberation, hesitation, procrastination )

The unspoken kicker is of course that Yaro may have even gotten lots of word-of mouth through talk of and sharing of his free product. He comes out a winner! None of these effects happened because he moved the free line, they happened because he built crediblity, reciprocity and positive expectation in his readers.

You could say he actually built a bit of relationship even without ever meeting you! It wasn’t so long ago that this was impossible.

But you may ask what’s going on with the free line? How does that fit in?

Its really simple. In a competitive market it pays to have more perceived value by better credibility and to be able to command more sales conversions and higher prices because you built relationship.

Is this going to go on forever?

Not likely.

Let’s take a look at a simplified example to understand more clearly what’s going on.

Let’s say you and I both were the only ones who new the 4 mathematical operations and let’s say that addition was the simplest, then subtraction, then multiplication and finally division (I really never got that last one fully under my belt as I’d like). And thats the order people usually like to learn them in.

So I sell one Ebook on each of the 4 for anyone who wants to reap the benefits. My pricing is 1$, 2$ , 3$ and 4$ respectively. I’m making good money and along comes your novel mind, and you decide to undercut my by giving away your addition book. Now everyone is flocking to you and you are selling your subtraction book at 3$ and with the added revenues you are buying more of the googleadwords and I am struggling to catch up.

So I arm up in response. I give away “NUclear secrets of Subtraction” and your adwords are left in the dust. So this process continues. And just like a nuclear arms race its not tenable forever. Soon enough there is a diminishing returns that we reach.

We might just stop after multiplication because division is all we have left to sell. On the other hand you might just forge ahead and invent fire, and since we know you can sell a book on fire, you can give away our division book too! Leaving me in the dust.

The reality is though that in any given market there is a cost to innovating. If the cost of innovating is insurmountable or the costs of production are cumulative it lends itself to a status quo of the free line.

So truly the freeline moves up to a point.

And although generally speaking the rules of thumb of give , give and then figure out what else you can give are great for your spirit, your pocket book and your prospects… ultimately it heads towards a limit in each market. That’s why you’ll never see cars given away. In a highly competitive niche of infoproducts category just keep sharing. I hope that was helpful!

Thanks, Yaro for your product and the interesting blog posts.

I think one of the reasons some people feel they have to give something away for free on the Internet to “convince your customers that you are worth buying from” is because the Internet has such a high percentage of crappy products and scam artists trying to rip people off.

Two of my products have been on the Internet (through constant improvements) since 1998. They continue to sell consistently well today. I give nothing away free – not even any of those crappy “free bonuses” the schlockmeister IM “gurus” insist you “have” to give away.

P.S. Beware of absolutes like “You have no choice – move the free line or your business will ultimately fail.” Every so-called rule has many exceptions…

The point is that you don’t have a choice.

You must convince your customers that you are worth buying from. In order to do that you will need to provide them with some up front value free of charge.

In the past you would have to mail them 57 catalogs over the course of 3 years or put television commercials on every major network in town to convince them that you were a trustworthy business… that model is dead.

Now… instead of direct mail or other traditional advertising mediums — your time and money is better spent developing top-notch content that is helpful to your target market to establish the trust that used to be built through brand brainwashing.

You have no choice — move the free line or your business will ultimately fail.

1. If you give away what you had previously been charging for, how do you make any money?

2. If I have developed new, innovative products that cost me time and money to create that no one else is offering, why should I give it away?

3. My business philosophy has always been, “if it’s worth marketing, it’s worth charging for”.

4. Let’s face it, most of what’s available on the Internet for “free” is either (a) junk; (b) a come-on for something that costs money; or (c) both (a) & (b).

5. One way or another, you always pay for what you get.

The more you “gurus” give away the better it becomes for us consumers … thanks!

Hope the whole industry follows suit and continues to “move the free line” .

All the best for 2009

All you do by constantly giving people free stuff is condition them NOT to buy. They will expect everything for free. This has been proven beyond question in Direct Marketing.