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Price TagsWhen starting a business online, one of the toughest questions entrepreneurs face is, “what should I charge?”  It is so difficult today because no matter where you turn someone is offering a similar product or service for less or free.  So how do we compete with free and still be profitable?

“Back in the day,” entrepreneurs only had to worry about what the guy down the street was charging.  It was a bigger world then and you’d physically have to walk down the street to compare prices, and therefore the race to the bottom not as fierce.  But with the Internet, we have access to the competition at our fingertips, and more and more of the competition are just giving stuff away.  So again, how do we decide on prices and compete with free?

FREE IS NOT THE ENEMY

First, we have to stop seeing free as the enemy.  In many cases it is unfortunate, but however you look at it, free stuff is inevitable in the online marketplace.  If it is inevitable then, you have a choice to either adapt and change with the times or struggle to keep your doors open.  Mind you that I’m not saying ‘everything’ should free, but entrepreneurs need to be aware of it, recognize it as a tool, and incorporate it into their strategy.

DON’T BE FOOLED: FREE HAS A PRICE
Free Costs Time

Free Costs Time

In reality, Free is not free.  Free comes with its own price.  The price of free however, is measured by the span of our attention, in time.  I’m not spending dollars and cents every time I log into my Mint account or read an article from Hubspot, but I am spending my precious time.  It’s ironic, but in reality our TIME is much more valuable than money.  Time is a finite resource.  Time is what you spend every moment you’re logged into that free service.

The new question then, isn’t how do I compete with free, but how do I use Free and monetize the ‘time’ of our audience?

HOW TO USE FREE

Seth Godin, master marketer, writes high-quality articles everyday on his blog.  Doesn’t charge anyone to read it, even though he probably could.  But he still manages to sell thousands of copies of his book, ‘Small is the New Big‘ at $26 apiece, which…is merely a collection of some of these same Free articles.  Mint.com provides an incredibly valuable personal finance tool for millions of people, but doesn’t charge a cent to its users.  It does however make money on advertising and connecting its users to credit card offers and such. Hubspot.com is an awesome Internet marketing business that offers tons of free tools, info and articles to their audience.  This draws in prospects, and they then convert these prospects into clients.

SEEK BALANCE

Again, I am not saying that you shouldn’t charge people for your service and give everything away for free.  But unfortunately the online consumer expects a lot from businesses these days.  If you keep everything behind lock and key, it will hurt your business.

What you need is a balance of both.  Offer some free advice, blog about your topic, connect with your community, and show your target audience that you know what you’re talking about and can provide value to them.  This builds trust and loyalty.  As with the examples above, by balancing the scales of what you charge for with what you give away, you can create a natural draw on your audience and monetize their time.

LESSON LEARNED: Free does not come without cost and is therefore not FREE.  Free costs time to produce, and also to consume.

Update: This article by Chris Anderson, entitled “Free! Why $0.00 Is the Future of Business” is an awesome resource for those that may be interested in ‘Freeconomics’…enjoy.

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Does your company have a story to tell?  If yes, are you taking full advantage of that story to build your brand?

Federale with Leather Briefcase

Federale with Saddleback Briefcase

I recently put “Be a Good Story Teller” on my list of ideas for this blog.  It was a topic that I felt I wanted to address because it was something that I hadn’t heard much discussion on.  So what does telling good stories have to do with building a successful brand?

We should have all figured out by now that the purpose of branding is to capture attention, engage interest and leave a memorable message with the recipient.  The more refined and well crafted the brand marketing, the more clear and understood the message will be received by the targeted market.  This in turn, will result in more sales, traffic, etc.

Coincidently a good story must contain these same elements, “to capture attention, engage interest and leave a memorable message.”  If your business has a story to tell then by all means use it.  Incorporate your company story into your business the same way you do with branding.

7 Reasons Why Story Telling is Good for Business.

  1. Everyone likes a good story.
  2. Stories show personality.
  3. Stories have the ability capture and hold our attention.  (We’re all a bunch of ADD’ers)
  4. Stories build brand loyalty, by creating an emotional connection between business and customer.
  5. Stories are easier to remember than facts, and being memorable is the objective in branding.
  6. Stories are unique, and…
  7. People like to share stories.

“They’ll fight over it when you’re dead.”

The Saddleback Leather Company

The Saddleback Leather Company

There is really no better way to show the value of a good story, than to look at a perfect example of a company that has an amazing story and has used it to build its brand.

I was introduced to the Saddleback Leather Company’s story from the SAMBA Blog (article by Jon Dale, They’ll fight over it when you’re dead) and it inspired me to share the value behind good storytelling.  Dave Munson, the president and founder of the Saddleback Leather Company invites his site visitors in and shares the unique story behind the company’s founding.  Even their prominent Call to Action on the homepage draws you into the story of the brand more than the products themselves.

Now following Saddleback’s example, let’s examine how we can tell a good story.

How to Tell a Good Story:

  • Be Yourself: The personality of your brand will in many ways match the personality of the entrepreneurs who build them.  From the tight-laced professional to the fun-loving hipster, our businesses and brands tend to reflect their owners.  So embrace the your uniqueness and what it brings to the table.
  • Be Interesting: Remember, just like branding, telling your story must capture attention, engage interest, and leave a memorable message. Be descriptive, use pictures, and paint the picture of your amazing product or services journey.  Where did it start?  Who was involved? What did you struggle with?  How did you overcome challenges?
  • Be Honest: Fairy tales are great, but if you lie to your customers they will find out and it will ruin any work that you put into it.
  • Be Proactive: Don’t stop creating your story.  How do you want your business and life to be remembered?  Be adventurous and bring your brand with you.
  • Involve Your Customers: Just like the Saddleback Company created a photo contest for its customers and received responses from Africa to Antarctica, involve your happy customers and everyone wins.  You build brand loyalty and advocates for you company and your customers get to be a part of the story.

I’ll admit that not all businesses will have a compelling story to tell, and therefore should not try to make one up. However if your business has a good story then by all means tell it and use it to sell your brand.

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