[Re-Release] Free vs. Paid Product: Which One Works Better?

When you're giving away bonuses, it's easy to believe you don't need to give away your best product or service. The best information always needs to be sold—so you can earn a decent living. And yet, this podcast episode takes an opposite stance. You need to put your best stuff out in front—free. Yes, give away the goodies, no matter whether you're in info-products or content marketing; services or running a workshop. Giving away outstanding content is the magic behind what attracts—and keeps clients.

--------------------
Resources
To access this audio + transcript: http://www.psychotactics.com/100

Email me at: [email protected]

Twitter/Facebook: seandsouza

Magic? Yes, magic: http://www.psychotactics.com/magic
--------------------

In this episode Sean talks about

Part 1: The Concept of Consumption
Part 2: Why Package Your Free Content
Part 3: Why You Must Feel Pain
Right click here and 'save as' to download this episode to your computer.

Useful Resources

5000bc: Where smart people come together to help each other honestly
Goodies: How to design a visual "yes-yes" pricing grid for all your products
The Brain Audit: Why clients buy and why they don't

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

The Transcript

"This transcript hasn't been checked for typos, so you may well find some. If you do, let us know and we'll be sure to fix them."

What are the three benchmarks that you need to create this magic?

Many years ago when I started my cartooning career, I used to get all kinds of jobs. What I really loved was the plum jobs, the jobs where you had this fabulous stuff that you could do and used to get paid really well. I would spend hours and days and weeks doing those kinds of jobs. Then you had the recurring jobs. These were tiny cartooning assignments which didn't pay very well, so I'd just work very quickly through them because well, they weren't paying that much anyway. One day, my neighbor, who happened to be an art director of Elle Magazine, he stopped in and said, "Sean, why are you doing such a bad job with these cartoons? Why is it that this work looks so shoddy?"

Of course I said, "Well, they don't pay much." He said, "I don't really know how much they pay when I look at your work in the newspaper. I only look at the work and I say, 'This work is shoddy. This work is sloppy. As a reader, I'm not supposed to know how much you get paid. I only see the end result.'" This is true for us as well. In today's world, where we're giving away free stuff, we look at the stuff we're giving away and we think, "Wait, we need to put in all our efforts into creating great products and great services. But if it's going to be free, then we need to pull back about it. We can't put in all the effort into free." My art director friend would tell you, "I don't see it that way. It cannot be shoddy. It cannot be sloppy."

That's what we're going to cover today. We're going to cover how you need to make your free product as valuable or even more valuable than your paid product.
What are the three benchmarks that you need to create this magic?

Part 1: The Concept of Consumption

The first thing that we're going to cover today is the concept of consumption. The second thing is how it needs to have that unhurried look, that unhurried texture, that unhurried feeling. Finally, we need to feel pain, real pain. Let's cover these three topics. Let's start off with the first topic, and that is one of consumption.

In case you didn't already know it, Netflix has been monitoring your behavior for a very long time. Netflix is big time into consumption. The reason for that is very simple. The more they get you to come back and watch serials and movies, the more likely you are to renew your subscription month after month, year after year. For ages, the television industry has suggested that the pilot episode is the most critical of them all. If someone watches the pilot episode, they're going to watch all the rest, or at least that's how the philosophy went until we ran into Netflix.

Netflix started pinpointing the episodes for each show season in which 70% of all users went on to complete the entire series. Here's what they found. When they looked at Breaking Bad, the hook was not episode number one; it was episode number two. When they looked at the prison comedy, Orange is the New Black, they found that episode number three was the one that made the difference.

In some cases, it was episode number eight that made the difference; in some, four; in some, three; in some, five. What they found, however, was that people wanted to get to the end, and that if they got them to binge watch, they would watch all of them one after the other. What does this tell us about our clients? What does this tell us about our reports and our newsletters? It tells us that people are a lot more willing to give us a chance than we think, if we can get them to the end. This is why consumption becomes so critical.

When you look at all of those signups, you know those little boxes that say just give me your name and your email address, and let's do this quickly. Well, that's not how people really behave. When you do the study, people behave differently. They want to consume stuff. They want to spend more time at your site. They want to read a little more before they commit. When you're creating a product, maybe it's just a report, maybe it's an article, a series of articles, maybe it's a webinar or a podcast, people will take their time. They will give you more than one chance. It's not like you need to have a sloppy first time, but it's not like you have to convince them either. Because they take their time.

What you have the ensure is that they get from point A to point C at the very least. You have to get them through the stages. This is what we do with the Headline Report. When you get 2 Psychotactics and you subscribe to the newsletter, you get a headline report. It shows you how to write headlines, just taking three easy steps. But there is no hurry. You go through the introduction. It gives you the philosophy. Then it takes you to step one, and you're able to create a headline, and then step two, and you'll be able to create another headline, and step three and the third type of headline.

In under ten minutes, you can create headlines just reading the report, but it gets you to the end. When you get to the end, you already have this superpower. You have this ability to write headlines, to figure out which headlines are missing those components. It's complete. What's happened there is it has been designed for consumption. It has been designed to make sure that the client gets that superpower, that ability to do something.

When you look at a lot of the webinars online or the podcasts, a lot of the stuff is based on information. It is more and more and more information, but not stuff that you can directly apply. This is what we have to work at, because we're not in the entertainment business like Netflix. Their goal is to make sure that you get to the end of the episode, of the next episode, and then right to the end of the series. They're totally in the entertainment business, and we are in the information business, but we need to make sure that we're not just giving information but we're giving that client a superpower. We're giving them the ability to write headlines. We're giving them the ability to do something specific at the end of it. We need to start off with the end in mind. That's probably what Netflix is doing anyway. They're going, "What is the end point of this series?"

That end point is then creating all of the series back to back so that you get hooked. You need to ask yourself that question as well. When you're creating a report, when you're creating an article, when you are doing anything that you're giving away free, the shoddiness comes from the fact that you were just going to give away information, more information. In reality, if you think about it from a perspective of when they finish this, what superpower will they have, that changes everything doesn't it? That makes your client more likely to binge read, binge listen, binge watch, whatever it is that you're going to throw. Then the free becomes more important than the product itself because they haven't paid for anything and they've got this value which they just didn't expect.

Consumption comes in very quickly and consumption becomes more critical than attraction and conversion, which gets bandied about all over the internet. You need to know how to attract. You need to know how to convert. Once you've gone through that, the third stage, consumption, that's the most critical of all. You can start off with your free product or your report, or just about anything, as long as you know what is the end in mind and how will it help the customer get to that end and have the superpower.

That brings us to the end of this first section. Let's go to the second section.

Part 2: Why Package Your Free Content

Let's explore why your free product content needs to look very unhurried, and yet, very unpackaged. On Fridays, something very strange happens at our café. The usual baristas disappear and someone else takes their place. Now it bugs me when baristas get changed on Friday, because you're starting to settle in, you're starting to relax a bit, and then your whole routine has changed because of this change in barista.

Anyway, this new barista, she's making the coffee and she places it in front of us. She goes away and the café is reasonably quiet, almost too quiet for a Friday. She comes over and she's asks for my opinion. She's says, "How did you find the coffee?" Of course I'm the wrong person to ask for an opinion because I will give it. She's standing there for about 20 minutes listening to what I have to say, because I'm telling her how I evaluate the coffee. The way I evaluate coffee is I look at the barista themselves and I look at how they're dressed. Maybe this is just me, but every time I see an untidy-looking barista, I get bad coffee.

The first thing I'm looking for is how tidy does the barista look. Then the second thing I'm looking for is how tidy does my cup of coffee look. Is there art on it or is it just coffee in a cup? Before I've even tasted the coffee, I have a pretty good idea whether the coffee is going to be good or bad. Then of course there are variables; that can be humidity, the temperature of the milk. There are so many variables in the coffee, but at the very core I'm looking for this unhurried professional cofee that comes out in the midst of a deadline. This is what your client is looking for as well. They're looking for this report, this article, this information that is unhurried. They know that you're busy, but they don't care. They're the clients. They want this product or this service to look professional long before they open it.

Packaging becomes very critical, and packaging needs to look unhurried. It needs to look like someone has spent a little time despite the deadline. You see this a lot in Japan. I have mentioned this before on the podcast, that Japan is probably the best place in the world to buy pretty much anything. You can go to the smallest store and ask for food, and you've seen how sushi and sashimi has been packaged. It's always very cleanly packaged. There's this design element around it. You can go and buy some sweets. You can go and buy a little pendant. You can buy pretty much anything in Japan and you get packaging. You get this look of unhurriedness.

When you have this product, whether it be a webinar or a podcast, you need to feel that packaging. What sets off that packaging? For instance, in this podcast. The story that starts up right at the beginning, that tells you that some amount of research has gone into the whole Netflix story. The fact that there are three points that we're going to cover, that tells you that's a very clear outline. This is like the barista. You've not really listened to the episode yet, but you get this feeling. You get this feeling that there is a logic and there is work put into this, and it's unhurried.

That is what is critical, because it sets you up for the rest of the binge listening or the binge reading or the binge experiencing. You can tell the difference between a great presenter and a crappy presenter. You can tell the difference between a good writer and a bad writer. There's always this factor of unhurriedness. We need to get the client to feel this packaging long before they get to the meat of the content.

Netflix, their research has shown exactly that: that clients are willing to go the distance before they decide this is really good or this is really crappy. We will walk into cafes and look at the barista, and either stay or walk out. It's based on this factor of unhurriedness. How do they present themselves? How do they present their coffee? It's the same thing for your product. You cover your introduction, your structure. That needs to be very clear before I get into the meat of the matter. That's what you really need to work on.

That's what makes the difference between a free product and a paid product. It needs to look like a paid product. It needs to look like something you paid a lot of money for, and yet you got it free. Now you don't have to spend months and years working on this free product, but make it tidy. This takes us to the third part, which is the pain that you must feel when you're giving away your free product.

Part 3: Why You Must Feel Pain

As you know, I like to cook Indian food. Two dishes that make me very happy are butter chicken and a dal. A dal is a lentil, by the way. If you were to ask me to give away the butter chicken or the dal, I would hesitate. Now I like them both as much, but I like one better than the other. Well, not really, but here's the thing. I still would hesitate to give away the chicken, the butter chicken. That's the kind of dilemma that you're dealing with. You're dealing with a situation where you've got this really good stuff and you're not really that keen on giving it away.

You think maybe it would be a good idea to give away something that is not quite so salable. Because when you look at what you've done, you've spent a lot of time and effort, and somehow it seems like a shame to just give it away. You've got to feel that pain. You really have to feel that pain, because when you feel that pain, that's when you know that the client is going to feel wow, this is amazing. It's almost too easy to give away something that is not quite up to that standard. You know the standard. It doesn't matter where you are in life, you know your standard and you know what's possible, and you know your best. When you're giving away your best, you feel that pain.

I remember the time I went and met a friend of mine. He is a world-class watercolorist. He had just finished a workshop in Auckland. Of course we met, we had a beer, etc. After that, he gave me one of his sketches. He just pulled it out from his bag and he gave it to me. What did I do with the sketch? I look at it, I said thank you, I took it home. Do you think it was his best sketch, his best watercolor? Of course not. It was just something that he was doing, just a rough sketch. It stayed around the office for a while, and then it went under the bed. Then I don't even know where it is anymore.

Now, even if he were listening to this podcast, he would not know that I'm referring to him, because I know quite a few watercolorists. If you're a watercolorist and you gave me a painting, there's a pretty good chance that I don't know where it is right now because it wasn't your best. This is the whole point. When you give away stuff, give away the best stuff, or at least part of the best stuff.

Now we sell a course called the Pre-Sell Course. This teaches you how we sell our courses, how we sell our workshops, how we sell our products. We sell our products faster than pretty much anyone on the internet. Courses that cost $3,000, in 20 minutes the course is full. No strategic alliances, no ads, no joint ventures, no nothing. How do we do it in 20 minutes? The Pre-Sell Course shows you that. It's not cheap; it's almost $400. But we wanted the audience, our members, our subscribers, to understand how powerful this course was. What we did was we sliced it up into about a fifth of the course and gave it away. You know someone wrote back to me and said, "You know, I didn't buy the rest of the course, but just using that one-fifth, I was able to launch a product very successfully."

Are you thinking what I'm thinking right now? We're giving away stuff that is so powerful that the client might not even need to come back for some more, but they will come back. That's what we've found consistently. We've found that when we give away stuff which is useful, that is consumable, that is powerful, the client comes back. Because that's what happens in real life when you give away a sample.

Something that's amazingly tasty, it's not like the diner goes away and just doesn't come back. We've found time and time again, and this isn't the Pre-Sell Course by the way … There's a whole section on sampling. It talks about how sampling increases sales by 200, 300, 400%. It's incredible. I didn't think that sampling could do that, but it does it. There are statistics to prove it. But if the sample itself is not so powerful, not so outstanding, why is the client going to buy a product or service from you in the future?

Summary

This brings us to the end of this podcast. We covered three things. The first thing was the factor of consumption. You need to get the client from one point the other. Interestingly, as we saw in Netflix, it doesn't matter. You don't have to speed up the process. You don't have to get people to sign up right away. They read, you know? They read a little bit. They read the introduction. They look at how it's constructed. That takes us to the second one, which is your packaging needs to be great and unhurried. It's like every time we go to the café, we look at the barista and we say, "How are they? Are they neat? How's the coffee presented? Is it perfect?" That's how you know you've got a great coffee. That's how you know you've got a great product.

Finally, you have to feel that pain when you're giving away your product. If you don't feel that pain, it's like giving away the dal instead of the butter chicken. It's not that the dal is bad; it's just that the butter chicken, well, you would rather be eating it yourself, right?

What is the one thing that you can do today?
The one thing that you can do today is to look at whatever you're giving away and see is it built for consumption. Can they go from A to B to C and then have that superpower? If no, then you're just giving information. We don't need more information. We're done with information. Just give me some skill that I can sort out in the next ten minutes, or 15 minutes, or 20 minutes, whatever, but quickly.

We're done with this podcast episode. I store all my podcast ideas in Evernote, so if you've got some ideas, some questions you want to ask me, send them to [email protected], or on Twitter @Sean D'Souza, and Facebook at Sean D'Souza. If you'd like to join us at 5000bc.com, then please do so. It's a place where introverts gather, and we talk and we discuss, and there's a huge amount of information. I'm there 17,000 times a day answering questions, writing articles in response to your questions. It's a cool place to be.

Still Reading? Now that you understand why free products need to be better than paid products or services, do you know how to price your products? Here is a detailed visual "yes-yes" pricing grid, to help you—Dartboard Pricing: Yes and Yes Grid. You'll see how to construct the pricing grid (it's easy), and then you can adapt the concept on your own slides, pricing sheets, or website. And yes, increase your prices! (http://www.psychotactics.com/cb)