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When Something Online is Free

Copyright 2005 Sharon Housley

What are consumer expectations when something is free?
Realistically, consumers subconsciously assume free means
free, and while that might be the initial intent rarely is
it the case.

What Exactly Does Free Mean?
Very few things these days are free in the real sense of
the word. There are very few free items that do not have
any strings attached.

Why do Companies Offer Things for Free?
Companies or individuals may promote a free offer or
service for any number of reasons. From branding to ad
revenue, companies often use "free" to attract attention or
interest. As a consumer, it is important to realize what
"free" might really mean.

Reasons Things Are Free:

Linking
Companies may offer something in exchange for a link back
to their website. As the web becomes increasingly more
competitive, linking can effect more than just search
engine placement, and providing a product, service or
information free of charge in exchange for a link can be a
good business decision. Often, publishers will create
articles like this one and make it available for
syndication, with the stipulation being that the author
resource box that follows the article remain intact,
providing links back to the author's website. Bottom line,
authors often make content available for syndication in
exchange for links back to their websites, which they
benefit from.

Ad Revenue
Some companies provide a product or service free of charge
and generate money from advertising. Perhaps they sell
banner advertising on their website. A free product draws
web traffic so that the number of visitors seeing the
advertisement increases. The more visitors a site attracts,
typically the more revenue generated from the ad space.
Perhaps a software application is free of charge, but has
embedded advertisements. When ads are clicked, the software
developer earns a percentage of the revenue paid for
serving the advertisement.

Goodwill Branding / Public Relations
On occasion, companies will provide a product, service or
information free of charge. If the offering is extremely
magnanimous or socially sensitive, they will often receive
significant press exposure, generating free publicity for
their brand. Pepsi Cola sponsors a number of athletic
events and generates enormous amounts of brand loyalty and
positive PR with their target audience.

Contact Information
Sometimes companies or individuals will provide something
free in exchange for contact information. Ebooks are often
provided free of charge if you provide an email address.
The contact information may be sold at a later time or be
used to market related products. It is important to check
website privacy policies to determine how personal
information can be used.

Exposure
Companies will often provide a light version to gain
attention for fee-based products or services. This often
allows potential customers to see a product's or services
potential. The hope is that providing something free will
generate both brand loyalty and interest in fee-based
options or services.

The Problem with Free
If a business or individual is truly providing something
for free, there is a cost involved. Whether time, resources
or services are consumed to provide the free item or
service there is an expense involved. If the cost is at any
point greater than the benefit or perceived benefit of
offering the free item or service, the business or
individual will likely review options to better balance the
cost-to-benefit ratio.

They may:

Discontinue support
Companies or individuals that provide a free product may
continue to provide the item free of charge but discontinue
the support. If the item is something like software, the
expense has already occurred. By providing the item without
technical support or customer service they can reduce their
staffing costs. The only ongoing expense to provide the
item free of charge would be ongoing hosting costs, which
are usually relatively small. If the item is critical to a
business or individual's operations, the value of the item
will be lost if technical support or customer support is no
longer available.

Abandon
Businesses may simply discontinue offering the free item or
service without notice.

Compensation
Individuals or companies may begin requesting donations,
compensation, volunteers or a benefit listed above in order
to continue to provide the item or service free of charge.

Cut Corners
Often free items are of reduced or inferior quality.
Cost-conscious businesses or individuals often try to
minimize the expense associated with free items and will
use less expensive materials for free items.

There is value to "free" just be sure that you know what it
is. Next time something is offered for free, evaluate the
quid pro quo and determine what you are giving in return,
because very little is ever really free.

------------------------------

Sharon Housley manages marketing for FeedForAll
http://www.feedforall.com software for creating, editing,
publishing RSS feeds and podcasts. In addition Sharon
manages marketing for NotePage http://www.notepage.net a
wireless text messaging software company.

More articles by Sharon Housley - http://www.submityourarticle.com/articles/Sharon-Housley-146/

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