Question

Topic: Strategy

"give It Away Sample" Or "no Buy-no Sample"

Posted by Anonymous on 6/16/2005 at 11:02 PM ET 500 Points
I need quantifiable information on the difference between websites (like this one)that give you a taste of content to get your membership or business or product buy

vs.

The type that show you nothing/very little of relevant content or product to get users to join or purchase to receive further information. What I am wondering is: which tactic is better for the bottom-line or more effective? Any numbers or info on retention of consumers based on these different business models?

I suppose it is the free relevant information theory showing industry knowledge and earning trust versus the gimme you dollar first and then I'll get your value theory?

What do you think?
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RESPONSES

  • Posted by Chris Blackman on 6/16/2005 at 11:27 PM Member
    What aspect are you studying, the user uptake, or overall business case?

    As I understand it Marketing Profs has a pretty large subscriber base (100k plus) for the free-level version, and I guess around the 15k mark for Premium members.

    Remember the free members don't get access to the premium content, and you could easily justify the Premium menbership fees based on what you'd save on book purchases alone.

    However the free members DO receive all the e-mail and website advertising which is included in the opt-in newsletter products. So the free-member headcount still has value to MarketingProfs, in terms of eyeballs for sale to advertisers.

    I guess it depends what you're selling.

    If it's a business info site you can create value by building a community.

    I think MarketingProfs probably has the best and most active community of its type anywhere in the world. Not a bad model to emulate. Then your main selling efforts are directed towards communicating the EXTRA value in the membership upgrade.

    Hope this helps.

    ChrisB
  • Posted by adammjw on 6/17/2005 at 4:42 AM Member
    Hi,

    I think both jonman and ASVP/ ChrisB are right.I do not believe there are clear documented numbers for or against one of these options.
    I would say that depending on the nature of your business offerings carrying unlimited white papers and/ or selected material could serve pretty well to invite people to upgrade to higher class- premium content.
    Then depending how good,enticing and thought-provoking your free content is the number of Premium paying members increases or not.Naturally enough the premium content must be worth the money.Then and only then can you find out what is your conversion rate.

    Rgds

    Adam
  • Posted by Billd724 on 6/17/2005 at 4:52 AM Accepted
    Hi Ms.!

    I'm not sure if there's a ready source of quantifiable information on this question you've posed. But I can offer a qualitative (i.e. IMHO) answer.

    Think about how a copywriter presents a 'case' for action. First, you focus on the problem . . . to demonstrate that you're in the world of your reader, listener, etc. then . . . after 'framing' the issues of PAIN that your audience has in a credible fashion, you present a benefit-focused offering that promises to reduce or eliminate those PAINS. Finally, you wrap up with a 'call to action' in hopes of getting some of your audience to respond and make you profit-able. Right?

    OK, on the merit of simply addressing the issues . . . by demonstrating a legitimate understanding of your audience's worldview and offering an appropriate solution to address those PAINS, you have to ask . .. would that be sufficient to get action or, a sale?

    Well, in the bell-shaped curve, the majority of your audience probably wouldn't move on that alone, IMHO.

    Why? Because merely demonstrating an understanding of the problem and 'promising' you have a solution . . . won't be enough for most people.

    Some, alas a smaller percentage, may say, "Dang, you seem to know what I'm up against, so I'll give you credit and take a shot at what you're offering". But that would be a distinct minority. not a majority of your audience. In this case, a 'sampling' would significantly increase your audience's confidence in your promises and likely increase the rate of response.

    OK, same situation . . . same insightful worldview and beneficial promises . . . but no 'sampling of da goods' . . . How would you be able to get as good if not a better rate of response? Simple. Use a 'name' whose brand is so credible that, even absent a sampling of the offering, the audience is 'sold' based on past experience or history with that provider or brand.

    Jay Abraham is one of those people. Dan Kennedy is another. The list of personalities with a demonstrated ability to deliver the 'goods' is a long one. But each one has built a 'trust me I won't _______ you' factor with their audience that enables them to get as good a response as a lesser known source might get but, with a sampling of the offer being included.

    I guess, if you ain't got the 'brand credibility', then you need to include a sampling so it -- the direct experience of the offer -- can 'sell itself'.

    If you do have the kind of reputation a great brand offers, then you may be able to rely more on your past history of success and less on the need to 'prove' your offering by a sampling in the moment.

    Don't know if this helps you with the quantative side of the answer, but qualitatively, I can attest to the validity of what I say. And remember, even the apostle Thomas was a doubter once! ;-)

    Have a great day. Hope this has been of some help to you.

    Bill
  • Posted by michael on 6/17/2005 at 10:36 AM Member
    Probably the best study on this would be one you could do your self. If you've identified several of each kind of websites (Free vs pay) you could contact the webmaster and ask if they started one way or another and then switched.

    The nice thing is that it's not too difficult to find webmaster contact info. Using surveymonkey or something like that might even be a better way.

    Don't forget to sell the results and make lots of money!

    Michael
  • Posted by Peter (henna gaijin) on 6/17/2005 at 4:06 PM Member
    Can "The type that show you nothing/very little of relevant content or product to get users to join or purchase to receive further information" really exist?

    If someone does not know what they are going to get, they will not sign up. MP does this by providing a free area, reserving the best articles for the paid-only area, and then teasing the non-paying folks with what is included there.

    But sites that contain information which they don't allow you to get for free generally will provide information for free anyway. How so, you ask? Demos. You aren't called a free member or basic member, but a trial customer. But the process really isn't all that different. The trial customer is given teaser information to get them to join the paid area. Think offline magazines - they will usually give you a few free issues to try the magazine in the hopes that you become a subscriber.

    This needs to happen, as no one will be willing to pay for something they don't know about. And I think that the sites which provide a free area and a paid area usually have lower subscription fees than the sites that provide just a paid area. This could be because the information is more proprietary in the paid only sites (so higher value)? Or maybe that they have to charge higher prices to offset the higher sales costs of this method? Probably both... But if the non-free sites charge more, then they will have a harder time convincing people to use it, hence the greater need for providing info on what they do (the demos).

    But, Chris mentioned above about the alternate revenue stream (advertisement). A trial customer system wouldn't allow for this (well, in the magazine case it would somewhat- but a subscription to a site like Lexis/Nexus or similar wouldn't). So best to consider all possible cash flow options in deciding this.
  • Posted by mgoodman on 6/20/2005 at 12:18 AM Member
    It all depends on your business model. How much of your revenue is from advertising versus subscriptions? What kind of conversion rate do you need to hit your numbers? What are the economics each way?

    This shouldn't be a difficult problem to model. Create the model, plug in some assumptions and see what looks best for you. Looking at someone else's success could lead you to the wrong conclusion.

  • Posted by mgoodman on 6/20/2005 at 12:18 AM Member
    It all depends on your business model. How much of your revenue is from advertising versus subscriptions? What kind of conversion rate do you need to hit your numbers? What are the economics each way?

    This shouldn't be a difficult problem to model. Create the model, plug in some assumptions and see what looks best for you. Looking at someone else's success could lead you to the wrong conclusion.

  • Posted by Mushfique Manzoor on 6/20/2005 at 4:00 AM Accepted
    hi there

    i agree with the experts' comments. i have been searching the web (google) to find out any relevant site on getting such informations and found none.

    IMHO, the sites like MP allows surfers to join and become a basic member by just putting a valid email address and allow them to participate as well as access to general articles. inticement to become premium member is done thru' keeping the Cream articles for Premium members. the trick is basically simple. those are basic member can always see the quality of the product they are getting FREE and have an indea what the paid materials can be.

    the revenue source of Mp is 2 way. from Premium Members and from Advertisers. i am sure Shelley and others at MP have done a Cost-Benefit calculation before they implemented this model.

    on the other hand, then again, there are sites, who gives everything free, all you have to do is sign-up with email address. and the products you get are also good quality( example is www.sequentlearning.com).

    their revenue source is advertisers only(aparently). and they obviously have done Cost-Benefit calculations before implemeting the model.

    so, like micheal said, which ever model you choose, it depends on your business' Revenue-Expense calculation. and also depends on the "preceived" quality of your products/services. Unless the prospective consumers percieve your products/service to be worth paying, then no matter how much/low you charge they wont buy.

    hope this helps.

    cheers!!
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