I need to rant about something…

We live in the greatest time in history for having access to tools and information.

It’s astonishing how many incredible tools and services are available to us right at our fingertips, many of which are completely FREE.

Yet instead of being grateful, many people have become totally selfish and entitled…

Which is why I believe that FREE IS BAD FOR BUSINESS!

Let’s look at the example of Evernote, a software company with over 100 million users.

I’m a big fan of Evernote and I use it every single day.

How about you? Do you use Evernote? Let me know in the comments at the bottom of this post.

So a few months ago Evernote made an announcement and people were FURIOUS about it.

Evernote announced that they were changing their pricing model (and in a very nominal way, I must add).

They announced that their Basic plan, which traditionally was free, would remain free…

However, users on the Basic plan would now only be able to sync their Evernote account to TWO devices at a time.

HOW DARE THEY, RIGHT!?

Seriously, people lost their minds.

For context, the upgraded plan costs less than 4 bucks a month, and Evernote’s most expensive plan is less than 8 bucks a month.

Now, normal, everyday users getting upset is one thing; for every change that a big company announces, there will always be naysayers.

But the fact that many of the people who were upset were business owners themselves, absolutely blows my mind.

How do you think Evernote affords to serve over 100 million people? Many of whom are using the service for FREE.

They’ve got to generate revenue from SOMEWHERE!

So the issue here isn’t that Evernote switched their pricing model, which they had every right to do.

The issue here is ENTITLEMENT.

Why do we think we should get everything for free?

Who does that really serve?

Here’s what I really think, and I would love your thoughts on this.

 

free-is-bad

 

Free is bad for business. And there are three reasons why:

 

1) Support.

If you are offering a widely used product or service, you need to dedicate a lot of time and resources to supporting your user base.

I learned this in a big way while running my software company WishList member.

We had tens of thousands of customers. It took a TONNE of support.

Offering great support to all of your customers isn’t cheap and it isn’t easy, but it’s definitely necessary.

 

2) Development.

If people are using a company’s product, it’s in their best interest that the company continues to invest in developing and improving that product.

This ensures a great user experience over a long period of time, and lets the product adapt to the changing demands of the market.

This type of ongoing development is a huge financial investment.

If a company is giving the product away for free, where does this money come from?

 

3) Focus.

If you’re giving your product away for free and you are funding the support and development of that product, both of which are essential, the money still has to come from somewhere.

So you would need to invest your time and energy pursuing funding or other monetization methods, both of which distract you from your main objective of supporting your customers and developing the product to fit their needs.

 

So yeah, free is bad for business.

Every business needs to generate revenue, and if that money isn’t coming from the product itself, it must be sourced from somewhere else.

And like I said, that takes the focus away from the product itself, which is bad for both the business and the end user.

If you are a business owner, I want you to remember this.

The big lesson that all of us should take from this is:

 

BE THE CUSTOMER YOU WANT TO ATTRACT

 

be-the-customer-you-want-to-attract

 

If you don’t want whiny customers, don’t be a whiny customer.

If you want to attract high-quality customers, be a high-quality customer.

It is crazy the hypocrisy displayed by some business owners…

People who sell coaching but have never hired a coach.

Or they sell courses but would never buy one. Or they sell memberships but would never join one.

You get it.

Let me repeat: BE THE CUSTOMER YOU WANT TO ATTRACT.

When you have this mentality, it changes a lot of things.

At the end of the day, I am happy to pay Evernote for their highest priced plan. Because I use Evernote every single day.

For me, the value of Evernote far exceeds what I’m paying.

And I want to pay them to support their business because I hope the product they are offering will be around for years and years to come.

And that’s what I hope my customers think, too.

I hope that if my customers like what I provide and want to see more of it in the future, they will continue to invest to support the development of what I’m offering so that I can continue to serve them for years to come.

Those are the kind of customers I want to serve, so that’s the kind of customer I choose to be.

When a business is paid for their product directly, they can focus all of their energies on supporting and developing their product, to continue serving their customers.

In this scenario, everybody wins.


 

  • Thanks for this great post, Stu. I found it useful for two reasons – first, I’m a paying Evernote customer and totally agree with your comments. I use it daily and will gladly pay what I consider to be a VERY reasonable fee for the benefits that it provides. Second, my business has been offering free benefits to customers for years that other businesses charge for, but we’re headed towards having to adjust our pricing due to rising costs. I’m planning on using elements of this blog post when we communicate this to our customers.

  • I concur that a pay for model can provide for better focus on the actual product at hand. On the other hand, time to scale, scaling plateaus and market lifecycle curves might well trashcan a great business before it can even make a pass around the track. I also concur with the entitlement issue, but it works both ways. Ie, the outfit that started out with a free model in order to reach efficiencies of scale, may well feel entitled for payment, now that have “made it”.. but their customer base might have put in a great deal of effort along the way too. Changing the model opens the door to competition, often times leaving the now pay2play entity in shambles.

  • Patience Phillips

    Reminds me of Robert Kiyosaki talking about his $200 board game worth $15. He sold it for $200 because he knew the people who bought it for that price would use it wisely and gain the most knowledge from it this way.

    I learned this lesson providing LOL or learn out loud help to others. Individuals I called, ‘clients’. I hoped to gain some social proof with. What I found is some undervalued me, don’t come to meetings prepared, show on time or at all, whine, complain, or don’t do the calls to action, etc. Not everyone, but some. The worst is the person who believes them self smarter yet haven’t figured out how to create a business from their efforts after many years.

    After a while, when I felt I experienced the areas that helped me fine tune social awareness with coaching. Finding out what works, doesn’t, etc. I decided since everyone was asking me the same questions and what I was sharing works, heck I’m using my own knowledge, it’s time to start a blog. Release some books I have content for, online courses, etc. now that I get the marketing and see what I am capable of.

    I do have a few ‘free’ folks still. Why? The value we agreed to providing one another is worth the effort. I’ll get free help in areas that aren’t my expertise with launching a series of children’s books. Plus, social proof with dedicated action oriented people who believe in the information that is helping them expand their efforts and business. For us, this is a win win.

    The rest can read the blog and act on the information and calls to action or not. Buy the books, and handle the content or not. What I know for certain is as soon as I started valuing myself at $1,000 an hour I made a whole new set of choices. One’s that don’t include being underrated by others any longer. This was my fault all along.

    The blog will be launched January 2017. I’m on social media as Patience Phillips @writerslifeblog. As a teacher I was considered an expert in helping students make the best choices. Opting out of poor ones virtually every time. Parents, teachers, all the way up to corporate asked me to help children, families, and schools. Now, as I matured in understanding marketing, I help people leverage value in their message. Creating success and a whole lot of happiness for themselves and those they serve.

    Gone are the days of free. Well, sort of. Lead generators can offer value. Other than this … I’m growing into $1,000 plus an hour. It’s a start 🙂

  • Good points here.

    Do you differentiate free products from free trials? I am re-considering some aspects of my business and considering to offer more free trials with the goal of securing more good paid business. There is the expectation that it is a limited time free offer that would then evolve into a paid engagement, so perhaps setting this expectation at the outset is the difference. Though I guess I may run the risk of wasting time with tire kickers.

    • Ruth Grunstra

      As feedback to you, I appreciate when companies offer free trials. I am willing to pay for services and I research a lot, but it’s a huge risk to commit to an expensive product. Money back guarantees are also the way to go.

  • Nailed it! High-five! 🙂 A sense of entitlement really is a mind boggling phenomena!

  • Timely Stu. Thanks. Making some choices about my business model going forward, and this adds to my consideration. For me, I am noticing I need to really get clear on what I WANT to get paid for — and more and more, I am realizing I want to get paid for writing and introducing people to ideas and concepts (which is what I used to do for free to generate leads for the hand-holding business I got paid for). But, I do not want to get paid for the hand-holding anymore. I want to get paid for the writing and introductions. A shift in business models, or in what I call my use of the Entrepreneurial Archetypes model I created. So, must give some thought re how best to make that shift wisely. I think a low-cost membership site in which I share everything I used to give away for free as well as what I used to sell at fairly high price points, could be the answer. In consideration …

  • Nancy Fox

    Stu, what I loved about your piece is the spotlight on entitlement! Which goes back to integrity – or lack of it — that has been rampant recently.
    A couple of years ago, I wrote a piece on my blog and on Linked entitled I’m Not Giving It Away For Free – And Neither Should You. It went rather viral – which surprised me. But here’s the thing – it went viral because readers wanted to learn how THEY could stop giving it away for free. Yes, definitely important. But your focus is on how to be the people we want to attract into our businesses. Therefore we should be willing to pay a fair amount for great product and service – and stop whining about how unfair it is.
    Business people especially should understand, appreciate, and embrace paying for great products and services.

    I think a sub quote here is “Stop Whining, Start Appreciating.”

    Thanks Stu!

    • David Rutledge

      Thanks Nancy – Sometime back I read a book ” No, You Can’t Pick My Brain” Adrienne Graham. People do feel entitled to a many things including what is in your brain

      • Nancy Fox

        David Rutledge – so funny you mentioned! I just was writing a blog post about that very topic!:))
        Entitlement is the problem.

      • Christy Dawn

        That is a pet peeve of mine too. “Friends” are always wanting to “take me to lunch to pick my brain” about their marketing strategy and new business ideas. If we’re best buddies, sure. But someone I see a few times a year at Chamber luncheons? Here’s my card. Let’s set up an official (billable) appointment. And, never fails, it’s ALWAYS people who wouldn’t want to give their service away for free!

  • I get this, and fight it every day — my clients have access to loads of free info, so how dare I charge so much? Thanks for writing so insightfully about this.

    And, did you know there is a black cat hiding in the mouth of the shark in your graphic?

    • Tammy

      Wow. You have very detailed eyes :0 Good job!

  • Carrie A Groff

    This is a nice wake-up call article! I must admit I was a bit perturbed when Evernote made that change, but then realized that as a business owner who uses Evernote fairly often, it only makes sense to pay for it. It is a business expense anyway and if it helps me stay organized then it’s worth the money. I love your saying “Be the customer you want to attract.” Thanks for this!

  • Gail Nelson

    Spot-on. I keep seeing the entitlement attitude everywhere – it’s disheartening to say the least because I know that people are becoming selfish as a direct result of “free” this or “free that” and they expect the same level of service they would receive if they paid for the service. It’s illogical at the very least, and self-destructive in the end because their “favorite” products and services are no longer available because not enough people wanted to support it.

  • Iva Vlasimsky

    I totally agree. We live in the time with a lot of clutter and noise, where the desperate race for customers imposed the “free model” across all sectors. And in the long run it cannot be good to any of us. Because it leads to low quality in the end. This reminds me of one John Oliver TV show about journalism, where he correctly concluded that the news quality is rapidly dropping because everyone nowadays expects a completely free information. No one wants to buy newspapers anymore or pay for subscriptions, and that consequently kills investigative and objective jounalism. I believe the same goes for any product quality. A free service maybe can be of high standard, but only for a limited period of time. The reasons are very well explained in this blog. Great post, Stu!

  • Well said. If people don’t pay, they don’t pay attention.

    I have a business I love and sometimes (because I enjoy what I do when I’m doing it) my customers forget that this is my livelihood. Could be because they do not like their j-o-b…

    P.S. I love EVERNOTE too.

  • Eiji Morishita

    Thank you Stu! Entitlement is a big disease where I believe it’s actually tougher to satisfy a free customer than one who takes personal responsibility and invests in a product or coaching. I use Evernote and love your view that you want to support them financially so they stick around for years to come. Btw truly enjoyed your talk yesterday at LaunchCon. Hope to see you today.

  • sharon34

    I love and pay for Evernote, esp since I can store important documents there EASILY.

  • Dave McG

    Love this, I wrote a similar article a few months back from a slightly different angle, I think businesses waste so much time on free tools. paid tools are most often better and faster, especially when you, looks at tools that are core to business, I met a social media marketer who instead of using a paid version of hootsuite just set up like 8 Free accounts… so much time wasted to save $8. Bravo Stu, great article.

  • Katrina May

    I love Everything in this article. It all boils down to integrity and character. It begs the question for me to ask of myself “what type of customers are you?” Thank you for this.

  • Henry Mittelman

    Stu, you hit the nail on the head! I am a bit “old school”. In the 60’s, 70’s, 80’s and 90’s there was never an expectation that you could get anything of real value for FREE. The Internet initially changed that as good, high quality FREE content became the norm. Unfortunately, too much of a good thing…becomes a bad thing! For those of us in the high-end professional services space, we have a saying…when you pay peanuts, you get monkeys! High quality products and services demand high fees because they change lives, deliver results, and are proven to work. FREE products and services might provide for some slight change or improvement, but if you’re looking for something to really move the needle, FREE is not going to get you there. It’s my belief that over time, the online customer will come to understand the difference. The other interesting thing I have learned over many years coaching CEO’s, business owners, and entrepreneurs is that the less your customer is willing to pay, the bigger pain in the — they are. Clients spending $25,000-$100,000 a year are the easiest people in the world to work with. They see the value of your product or service, understand that you are going to solve their problem, and are more than happy to pay whatever you ask for. If you are a true problem solver, price is a non-issue. On the other hand, people who are looking to pay you $3000 a year in the hope that you will turn their business around (and they expect it in 90 days) will drive you nuts.

  • KirbyFx

    The real issue isn’t “free”. Nothing is free. The real problems are VC-funded companies that sell their products below cost to buy a market or buy market share. This means that all the traditional businesses in the space – the business that actually have to receive fair value for their services – get punished.(Just like regional stores and Walmart.)

    The entitlement aspect is really societal / generational, and not about free, or even the VCs. We’ve just raised a generation of whiny, entitled brats. Some of it is bad parenting, some of it is bad politics, and the rest comes from the media – the greatest force of evil on the planet today, far exceeding ISIS, who would be a nothing if it were not for the fact that they are media darlings. (By definition, “terror” relies on messages carried by 3rd parties. If you don’t know about it, you’re not afraid of it.)

    It won’t all go away tomorrow, but if we survive, the problem will correct itself as the government gets it on to figure out that there is no more money to hand out, and everyone will just need to buckle down and earn whatever they get.

    I know how to raise a fruit and vegetable garden, and how to keep the end-of-season items in my basement. Do you?

  • Shari Czar

    Totally agree Stu. Sometimes it is easy to forget that our time has value and so do the things we bring to others. Other times we know it but resist asking others to recognize it. Once you start for free it’s hard to shift that customers mindset in the world of feeling entitled….thanks Stu!

  • Ruth Grunstra

    I totally agree: Be the customer you want to attract! And that would include reminding everyone they need to be very sure they are offering high quality service and content and a money back guarantee! Personally I like the idea of a free trial of the full product, which obviously would not work with a client-based service. Gives potential paying customer a chance to test run the product. I’m a member of Platform University and only joined because I followed Michael Hyatt, and many others, for a long while and he offered what I wanted, in a quality I appreciated. His free stuff convinced me.

    That said, I’ve waded through so much free material that is of such low quality, I would never turn over money to see what their paid services offer. So you’re absolutely right, ‘free’ hurt them. They may have great content in their paid subscription but I feel like their crappy quality free content helped me dodge a bullet.

  • Kim Albee

    As the owner of a software company, I totally agree! Love the post!

  • Deborah

    This is great considering I am just starting out and it is difficult to figure out how to charge for my services when, working for a non-profit organization, we didn’t charge clients. I think you can end up giving away the farm if one isn’t careful. The agency I worked for closed at the end of January because, not only did we provides services to our clients, we also had to find the funds, apply and hope to get the funds to operate. And the frustrating thing is, many in the general public think that because we were a NON-PROFIT that we shouldn’t get paid!
    All I know is that I have learned, and continue to learn, in order to be able to continue to work and support the families of seniors. All this learning is value that others are seeking. I get the same number of hours in a day as anyone else. I choose to use my time, knowledge and skills to help others only now I need to ask them if it is valuable enough for them to pay for it. I need to value me. Thanks for this insightful blog.

  • Paul Bonk

    Nice post! I believe setting expectations upfront is crucial. I will say free plus shipping does work as a lead gen tactic.

    Cheers

  • I feel very strongly about “free” shoots, free write-ups and features. And all this time we were taught never to do anything we’re good at, for free.

  • Leza Danly

    I absolutely agree with you, Stu… and YES I use Evernote and don’t know what I’d do without it and I am happy to pay. In the last few years I think I’ve fallen into the trap of giving away too much, and I’m seeing similar kinds of entitlement out there. And I am also seeing people who are grateful for what we share during our launches or our list-nurturing content… but it can be challenging to find authentic boundaries. In our space, it can be an occupational hazard to over-give, so I love that you are shining a light here. We’ve created a culture in the transformation space where we are training people to expect LOTS of our time and resources for free…

  • Laura Frisbie, M.Ed.

    I prefer to pay and then get high quality user INSTRUCTIONS and support. Really can’t imagine complaining about paying for something I use. Great photo.

  • Love this – be the customer you want to attract – indeed! Free is for when you are starting out, but when you can pay you should pay. Because that keeps them in business and in turn makes your life easier and you enjoy your business. We need to have a business arena where everyone is supporting each other because all of us winning is better than just one of us winning. Thanks for sharing your insights Stu, I think you’re going to be quoted quite a lot.

  • I so agree. The idea of “free” is a slippery slope. “Free” food, “free” education and even “free” customer service is impossible. Somebody is paying. So let’s be honest about products and services that are useful to us and then be willing to pay. Great post!

  • Donovan Dreyer

    I just checked to see I am at 6295 notes on Evernote. I do pay now for Evernote.

    I am now on my 5th year with Marcus Straub as my coach. Why would I ever want to make my team of support smaller again???

    I have also added a second coach multiple times. Why? I am on a mission as a social innovator and entrepreneur. Helping teens launch is an absolute must. The “old dogs” have to learn new tricks to help kids launch into Real World 2.0. I work with parents and school counselors discover the paradigm shift underway that you and your contemporaries are bringing about.

    Paying for coaches speeds up the process. Learning the framework helps me avoid reinventing the wheel of modern business and marketing.

    I like your model Stu. You do things for free WHEN you get money to do it. Building schools in Africa can’t be done for free. Some of the most philanthropic-minded folks are broke. This doesn’t work!

    The entitlement is a major issue as the pendulum from the post Great Depression days has reached an extreme. I have seen it worsen over the last 16 years in my work with teens. It has prompted me to stand stronger for developing teen spirit again. Entitlement leads to apathy. We need to fan flames and get kids hungry to collaborate in the paradigm shift that needs to pick up steam so we resolve the major social issues we confront today.

    You can text TEENTEAM to 33444 to be a part of this mission and see what Iam doing to serve teens, families and schools.

    Thanks for getting ME fired up Stu!
    ?

  • I work in the Catholic market where everyone expects to get products and services for free. One of my constant rants is that if we expect good quality Catholic resources we had better be willing to support the creators and distributors of those resources by paying for them. This market has a huge problem with entitlement. So I very much agree with your points. I also happily pay for Evernote premium.

    On the other hand, as a small business owner I am also very conscious that I can easily be “nickeled and dimed” to death. There is so much functionality necessary to run business online effectively, and it’s hard when you have to pay for every single thing. So I do take advantage of free products and services where I can, and really appreciate being able to save my bottom line even a little. I try very hard not to adopt an entitlement attitude. But I can’t stay in business if I don’t control my spending.

  • williedillo

    We value things in direct proportion to the price we paid for it.

  • Bjørn

    According to this logic the mistake that Evernote made was giving away so much for free in the first place. Sure, they have every right to change their pricing structure. But I think the reaction from many users is understandable because Evernote didn’t appropriately set expectations when they first brought these users on board. Had they started with only paid accounts, that would be fine (although obviously they’d have grown much slower). Had they started with a time-limited free trial, that would also be fine. They could even have made the changes they did if it had been very clear from the outset that “the deal you’re signing up to is free now, but may only be available to paid members in the future”. That would have been fine too. But as things went, it seems that the options range from either, at best, they messed up their business planning by giving away so much for free that it was unsustainable (which would show incompetence) to, at worst, they were using “drug dealer” tactics of getting people hooked and then starting to charge when they would no longer go back (which would show a huge lack of integrity). Either of these would reasonably lead users to be disgruntled. So I don’t think it’s just entitlement (which doubtless IS a big issue) – that would be primarily reflected by people expecting a pay-only product for free when they first sign up. In the Evernote case, it’s also about expectations not appropriately being set and the “promise” people were initially offered being broken.

  • Karen Kessler

    Completely agree.

    ‘Free’ now tells people that the product/services had zero value. For those I train and mentor, the rule is – never use the word Free! Anything that you decide to offer without a monetary charge is either a ‘gift’ or provided ‘complimentary’ … And the value, if the person was charged, is clearly shown.

    We experience gratitude and appreciation instead of entitlement.

    Thanks Stu!

    • Jay Fenichel

      That depends on how it’s used… Stu himself uses a very informative FREE product launch sequence to entice people into his service. There is a lot of power in free. It’ helps you flush out and separate those ideal customers.

  • Hattie

    Completely agree! i know personally that, by and large, I tend to value things more when I pay for them!

  • The iPhone with free games and $0.99 apps that should cost $20 have really spoiled people. The masses feel entitled to GETTING everything for free, but want to be PAID top dollar for what they do. I have no trouble getting paid, and I have no trouble paying for what I get. I was thrown off when Evernote changed the pricing, but it is an awesome tool, so I took out the credit card and started paying. You know what? It’s still an awesome tool at $4 / month !!!

  • Sylvie Sylvie

    Oh man I couldn’t agree with this more.

    I feel like an entire book needs to be written about entitlement, personal responsibility (or lack thereof), etc

    Thanks for this post, Stu

  • Hi Stu. I agree on the entitlement thinking. I remember when people first realised that Facebook would no longer show the posts on their Facebook pages organically, and that they would need to pay for ads – they were similarly outraged: “How dare they stop giving us all this free exposure for our business [that we have had for a while – and benefited from without layout out a cent], they’re a big business, they can afford it – we’re small, we can’t afford to buy ads.” So many consumers have been trained into that entitlements mentality. It will take some undoing. I think ‘free is bad’ is too general a statement – but I get what you’re saying.

  • Matilde Zayas

    I think that everything that say FREE is bad because, there is a motive behind it.

  • Bill Quinn

    Thanks Stu, I have two clients that charge the highest prices for their work, however they chose to give the highest service. What we have found is that customers that race to get the cheapest price gets the cheapest service. We have a consumer mindset culture I feel brought on by the large retailers and the automotive OEMs that make price the only option for buying, with quality no where in the equations. Many business owner are notorious for squeezing their vendors for the lowest price possible. I worked for a large international retailer that stopped purchasing their hugh orders from suppliers they had many years of relationships for the lowest price option and I always wondered what happened to those suppliers and their staff. I have affiliates that worked or have worked for large suppliers to the automotive sector who are told buy their customers to price their products and/or service at no more than a 3.5% net profit margin. Wonder why we continue to have massive vehicle recalls. Forgive me for my rant!!! We have a race to the bottom mindset, seeking free stuff and ever cheaper prices.

    “There is hardly anything in the world that some man can’t make a little worse and sell a little cheaper, and people who consider price only are this man’s lawful prey” John Rushkin

  • Excellent thoughts Stu! I was initially afraid to charge, so offered tons of free stuff. However I am learning and gradually charging for my services – it’s working!

  • Paul Conrad

    The cost of “Free” isn’t cheap. First, you offfer free products to bring about awareness of your brand, then attempt to raise the price only to have backlash.

    Not only are you losing money on the front end by not charging for a product, you also lose money on the other ends.

  • Nancy Luckey

    I just want to say thank you to all those who have provided free training. Without the help of such generous people, I would not know what I know now about having an online business. After nearly 50 years of working, I found myself in a position that I had to retire. My husband had a stroke, necessitating my need to retire to be his caretaker. Then, trying to find a job for which I was qualified, I found it difficult to find employment. A gray haired woman in her late sixties is, let’s admit it, not a prime candidate for employers, regardless of the years of excellent service, valuable experience gained, and passion to serve others.

    Then, I heard about online businesses. it seemed to be the most practical way to still use my skills and areas of expertise, to serve others, while earning extra income to remove some of the financial pressure I have experienced, after my husband passed away, and I had retired as the executive director of a non-profit organization. I was amazed by the quality people that are dedicated to helping others go forward in this field.

    I am deeply grateful for so many who have helped me. When I am earning money, when my business is up and running, I will not hesitate to support others as I continue in the learning and application process. I do believe a laborer is worthy of his hire, and should be paid. Just know, those of you who have provided free materials, you are providing many, I’m sure, with a needed service. I for one am extremely grateful for all who have helped me in a challenging time in my life. I have never felt entitled, but so appreciative. And I will be looking to support those people in the future with their efforts.

    • Kaja Paulos

      Nancy, thank you so much for your perspective, it’s refreshing! Also, I applaud your initiative and ability to adjust at that stage. I hope I would be able to mirror that one day

  • J.P.

    Totally agree!

  • Cheryl McLaughlin

    Couldn’t agree more. I’ve used (and have paid for) Evernote for years. It is my online brain that saves me so much time. Glad you’re addressing this Stu.

  • GiuliaRuna

    I agree. I was a CPA decades ago. And free IS bad for BUSINESS. Yes, businesses MUST charge for their services. No business can survive by giving all their products away. On the other hand, I am so grateful for the generous creative geniuses who do share their work for free, at least at first. All of us have had down times in our lives when we could not afford the product that lifts us off the bottom. So, a profound thank you. And, Evernote: take care of yourselves and charge what you need to charge.

  • James Spanke

    I agree. I sell value, and if people don’t see the value, or I fail to show them the value, I simply tell them I’m sorry, but we don’t seem to be a good fit. I value my time and knowledge and I like to work with people who appreciate what I have to offer. I’ve found that people don’t like the “take away”, and most come around with their thinking. But for those that don’t, I don’t want to work with them anyway.

  • Ipse

    The expectation of “free” is just another form of greed. Somebody always ends up paying the price and that price could be quality, business continuity or sharing your personal information. Facebook is free because they own every photo that you upload. That’s a hefty price for free

  • Claire Elisabeth Elliott

    I see what you’re saying, but I think it is great business to provide great value for free to everyone. Many people aren’t business owners, themselves, and don’t have a lot of money. They depend on free resources to learn how to make money… and we should want to encourage that. What a wonderful world it would be if every business was competing to provide as much value for free as is possible in this world of ours. Free for everyone, not just successful business owners.

  • You are absolutely right, Stu!
    I am launching a new community based service very soon and will have a members fee from day one. I want committed customers and are ready to cut down on volume to give priority to cash flow. My strategy is to have high value content that I think the segment would love before I launch and to over deliver on the expectations the first three months. There will be a short test periode for free.

  • What you mean I can’t build a business on handouts ? It’s my right and choice to be generous. No ones right to demand my time and talent for free. Thanks Stu. I too love Evernote pro. It’s my second brain away from my brain. ?

  • Zaza Lechat

    Love it!

  • Jennifer Schmidt

    Yes, I use Evernote just about everyday. I just bought my subscription last night. The fee is very small. The benefit is very great. When you undercharge for your product or service you don’t attract quality customers or clients!

  • It seems you’ve left out a few pieces of the puzzle here.

    It is so easy to spit out the word entitlement and use it to criticize others, or a whole society.
    One is the psychology behind ‘free’. Free entices people, they sign on and psychologically get used to it. So that is their fault? They need to be prepared properly before hand before any increases. Ask Netflix.

    Free is the bane word of the totally ‘for profit’ mindsets, a mindset where the addiction to making more and more money actually becomes a mental illness, although it is not recognized as such. That itself is an entitlement attitude.

    Maybe someone is more financially fortunate than others, but for many people $8 a month here, $6 a month there, another new fee attached to their bill, that starts to add up.
    Not saying someone hasn’t worked hard for their money, but many people work hard and smart, and still are struggling.

    One excuse is that of course we have to pay rent, that is an entitlement attitude by the landlord, one has to make a profit on their property right? It becomes a viscous circle.

    There is a much bigger picture than your commentary, which is correct, if you only stay within that narrow framework of thinking.

    There are many, many people struggling financially right now.

    I’m for making a profit, but how much does one, a company, need before facing a backlash, and then complain about ungrateful entitlement mindsets.

    How about the psychology of enticing people to overpay, Apple, NIke….
    Many internet marketers have a course that they have already made their money back on and more, but just up the price anyway, using psychological tactics.. scarcity, time…
    This article is an example of the use of mental rationalization behind that, development is the word I think you used. Same as the pharmaceutical companies, Monsanto, etc.

    And no I am not suggesting you, your businesses are Monsanto minded, you need to create your own benchmarks.

    There are ways to ‘give back’, free is a way, not the answer.
    There will always be ‘tire kickers’ and ‘freeloaders’, just as there will always be people who appreciate free, and hopefully become loyal customers if their financial situation improves, and you offer the right product or info.
    How much is goodwill worth?
    Just find the right balance
    Be the person you want to attract.
    Service takes on many forms.

    • Paul Moses

      Yeah, it is a larger issue. And marketing to what the customer wants, making things quicker and more convenient, etc., have all contributed to the entitlement issue. The people I serve all have the same problem, but they don’t all have the same capacity to invest financially in the solution. How to make things fair (where each gets what s/he needs) and equal (where each invests financially an amount that values the help) is a difficult thing to accomplish. I follow the biblical example of the “tithe” and let my clients pay according to a sort of sliding investment scale. Anything I offer that is free, really is free. And none of this “The value of this offer is XXXX, but today only, for the first 10 people who take action, you will get it for XX. The discount from $997 down to $67 for today only seems ludicrous. We develop marketing strategies to persuade or coax ideal clients into saying “Yes” to themselves. We “sell them what they want and then give them what they need.” But do these approaches backfire and contribute to an entitlement attitude among people searching for help?

      • KeithCollyer

        That “today only discount” thing is one of my pet peeves. Especially when the seller talks about you getting something of “value” $XXX. No, you are getting something of PRICE $XXX, I’ll decide the value, thank you. I see this with a lot of people where they “give away” stuff as part of a package that you can’t get any other way in any case. Really annoys me. I’ve been put off from signing up for stuff that looks pretty good otherwise because of this.

    • KeithCollyer

      There is the irony in that a lot of the people who complain will be accessing Evernote on an Apple device. And they will never have asked themselves which would cost them more to replace? Ipad fails, get a new one and re-sync (you did back up, didn’t you?). Evernote fails and WHAM, all that irreplaceable info gone

  • “When a business is paid for their product directly, they can focus all of their energies on supporting and developing their product, to continue serving their customers.

    In this scenario, everybody wins.”

    In so much agreement with you.

    We’re not charities, whether we have employees to pay or food to put on the table…we’re in business to attract customers, provide solutions and of course make money from the sale of services and/or training.

    In some cases, provide massive value too of course 😉

    The entitlement mindset is becoming rife online.

    It’s high time online businesses (particularly ‘IM’ vendors) stop feeding the whole ‘rechurned nonsnese for 2 bucks’ mindset machine.

    Businesses need to be businesses or they end up doing themselves and their customers wrong.

  • Great post Stu. I am amazed by what people expect for free. When some get a product for free, like Facebook, they complain because there are too many ads in their feeds.

    I am an accountant, professor and consultant. It is amazing what people will ask and expect me to do for free. I am a recovering people pleaser and used to do what I could. The bad part is the lack of appreciation of your work when done for free. I have since stopped doing it and say I have time at a certain date and I will give you a proposal. If they really want help they do it, otherwise I don’t have to feel guilty.

    Oh and I happily pay for Evernote. I value my time and Evernote (and things like Nozbe, Word, Excel, Quickbooks, etc) make me way more money than I pay. Small price to pay for efficiency.

  • Tim

    Here is a self test of proving to yourself that you don’t just think you “are the kind of customer you want to serve”.

    My hot water heater died last week. I got 3 quotes and told each vendor I was doing so. One vendor came to my home for a “free estimate”. I life the free in home estimate but, In the end he was $150 more expensive. I went with the low cost provider.

    Now here is the test …the guy who gave me the free estimate was very proffesional and a good guy. His time is of value. He drove from some location to my location in van with his logo. The van needs gas, insurance, tires ect. Real cost to do business with no gain. I insisted on paying him for his time and expertice. “How much for the free estimate I asked”? ….”its free” he responded confused. Here is $30 bucks for you time.

    The proof that you ARE the kind of customer you want to serve…. is how you treat and value those who serve you.

    Word

  • Tim

    P.S …

    We have “not become” selfish and entitled. We just are. I expect it.

    Change happens when we admit it and then do something about it.

    TME

  • Stu, I totally agree with you. I’m a huge Evernote user and am happy to pay for their highest level because I know they will use it to make a better product.

    I wrote a post this year about how to choose the right apps, and one of my criteria is being willing to pay for a product you believe in. You become vested in the success of the company and they become vested in your success. It’s a win-win!

  • Mikhail Gorodnichev

    Thanks Stu. I fully support your opinion on free.

  • Tim Storey

    I’m liking this discussion and the point about the directness of paying, rather than relying on complicated or confused indirect arrangements. Entitlement…great point, not because a sense of entitlement is “bad”, but because it just doesn’t work out very well it seems. Thanks for the post.

  • Hi Stu:

    My friend Sallie Goetch has a saying, that the biggest jump is from charging nothing (free) to charging even one cent. Te barrier of having to pay for a service, no matter how small that cost is, will prevent many people from ever using a product or service. Even if that service could help them boost productivity or generate revenue.

    The people who want to only use free products have a name, freeloaders.

    There is nothing inherently wrong with free tiers. It is a good way to increase market share or raise awareness of a product. When people need an expanded service tier, they move up to the paid version.

    It’s important for us to value the services we provide, and make sure they are sustainable. Support for free products also costs money. Freemium models should have a clear path to sustainable revenue from the paying customers. Free products are unsustainable without some sort of revenue strategy, and consumers should always be aware of that.

  • Maïlys Biscarlet

    Hi all. I agree. I am happy to pay when I get some value. It makes me feel good, it’s natural. It’s a give and take and it is my way to say thank you.
    But because on the internet there are a lot of people pretending they all are the best of the world, I love free trials. It takes out the hassle of checking for reviews… 😉

  • Sharon Rubinshtein

    I couldn’t agree with you more. well said.

  • Rick

    I think a blanket statement that free is bad for business is too extreme. Free has its place. If a company is having a hard time monetizing because they put out their stuff for free, they are not using free properly. Free is all about marketing, not monetizing. What I mean is that the cost of the free stuff (there is always a cost) needs to be part of the marketing budget. Use it for micro commitments and reciprocity. Don’t give away free ‘junk’, give away something that has value. Otherwise there is no reciprocity. But don’t give away too much. Don’t give away so much it threatens your business survival. That’s not a good business plan. If you are struggling against competition that is giving away free stuff, focus on creating a USP that makes you unique. If you cannot do that you may need to pivot and look for a new angle or even a new business. Without a unique strategic position (same as unique selling proposition) that cuts through the competition (free or not), you will struggle.

    • Jay Fenichel

      Exactly…. Facebook… Totally free to the end user. Once they had the market, they started monetizing with pay per click ads. They didn’t just start suddenly charging the end user who was not accustomed to that payment structure.

  • Tammy

    I’m just now getting ready to start my marketing business.I have never been a fan of FREE. It seems like a good way to attract people but I have to ask myself what kind of people. Are they the following that will stay with you or are they the ones that will always ask for a refund after they purchase one of your products? That brings me to another issue about refunds. Maybe that would be another good topic for you Stu 🙂

  • ProCoach

    I agree, free is all people seem to want from me. I don’t provide free services for what I have to offer and no one should. I have specific fees I charge for Cybersecruity expertise and coaching.

  • Amen Stu. I agree wholeheatedly. 100%. The truth is what you dont invest in you dont get much out. That is why people on paid courses actually do the work vs the freebies that get 100’s of free ebooks by sigining up to different newsletters and end up not reading or applying them.

  • While I get your overall point, I think the title is a bit misleading and you hit on the real issue later – “The issue here is ENTITLEMENT.”

    This is a big issue going beyond this context, but that – and the lack of understanding of economics many have – is really the issue, not that something is free at the point of consumption. Nothing is free – there is always a cost, with the question being how that cost is paid. If the customer doesn’t pay at the point of consumption, they pay in other ways, whether it’s with their information/data, having a very limited feature set, having to set up/customize it more for it to be useful to them, or in some contexts, with their tax dollars.

  • Carsten Korch

    Unfortunately, the internet today offers so many great things for free that many get insulted, when asked to pay a minimum to ensure the existence of these products they love and the companies inventing and providing us with these amazing tools, not to mention the people working at these companies.

  • This position on pricing reminds me of the pharmaceutical companies and their Research and Development expense. The price of each pill reflects the huge expense of developing and testing each drug, even though pills themselves are not expensive to actually create.
    As business owners, we can lose track of the big picture of what our actual costs are to do business, especially when we sell Service Products like coaching.
    Ask yourself: how much am I actually getting paid per hour of work?

  • Jay Fenichel

    Someone like me who is trying to build a mailing list… Unfortunately, you have to give some stuff away for free. It’s the current market state, and like you said.”entitlement” mentality of the internet generation. My free content (and I give away a ton each week) is designed with very little structure. The end user also does not have control or a choice of the content I release. But it still delivers value. My hopes are that a certain percentage who are more serious move to the paid platform and generally they do. You are always gonna have “looky loos” that will take your content and never pay you no matter what. Unfortunately they also want great support for nothing.

    My modeled is based after something like Dropbox. I enjoyed the free service for a while, but after seeing the value and realizing the need for more space, I happily moved to their paid tier.

  • Dr. Bill Manduca

    Stu,

    Your article brings out one of the issues at the root of a global problem today. We see it in first-world countries competing for greater market share. Ironically, we also see it undermining economic growth in developing nations. Much of the aid we send is in the form of relief that makes it next to impossible to start a for-profit entrepreneurial
    venture and sustain economic development.

    Free products and services have the potential for a whole host of unintended results. They can devalue other products or services in a market and undermines a business’ ability to preserve margins. It also creates an attitude of dependency that breeds passivity. This is to me the greatest argument against bigger government and why free enterprise over socialism is the basis for strong economies.

    Giving products and services away is selling on price and not value, especially for professional services like coaching and consulting. Many times a “zero price” means a business is trying to distinguish itself in a competitive market that does not have many unique selling propositions. Eventually, when you sell mainly on price, the offering becomes an undervalued commodity and the business becomes more vulnerable to market conditions outside its control (translated recession).

    One antidote to entitlement is to include psychological triggers such as scarcity and urgency in a product’s offer to keep its value high in the customers’ eyes. Another cure is to make sure that any free introductory give-away does not devalue the main product offering. The goal of an “ethical bribe” should be to provide “hidden” value that increases the customer’s
    feelings that they know, like, and trust the person making the offer. I want clients to think they are privileged to get my free stuff because it displays such high value and raises the expectation that other products provide expertise to solves other problems.

    Well that’s my story and I am sticking to it!

    Dr. Bill Manduca, MBA, DSL
    The Vantage Point Group, LLC
    http://www.thevantagepointgroupllc.com

  • Love this. So true. Be the customer you want to attract. That translates into so many other areas of life (Want to be forgiven, forgive others. Want people to be generous with you, be generous with others.)

  • This article has helped me on many levels, thanks Stu!

  • Glenn

    Thanks for this article. I totally agree with you. There’s no place for a business to cater to people who will never be paying customers. This era of entitlement is everywhere and I can’t help but wonder if it has anything to do with those participation trophies we all got growing up 😉 The free plan should have been so much more limited from the very beginning.
    However, here’s my dilemma with evernote. I’m already paying $69 for Office 365 which comes with word, excel, powerpoint and onenote and a bunch of other apps which I don’t use (my daughters do), plus 1 TB of space. This is the same price as evernote premium is now. I was an evernote plus user for the past 2 years, but I just cancelled. I just don’t think there should have been a raise in price. They are pricing themselves out of the market. On top of that, I can share documents with my 2 daughters easily now. If I needed to do that with evernote, I’m looking at spending at least $140…and my daughters need office applications like word, powerpoint which evernote doesn’t offer. I just don’t see how they justify $69 and $35 for their plans.

  • Sarah Haykel

    Great Stu Love, Sarah 🙂

  • I happily pay for Evernote. Also also subscribe to CoSchedule and Fizzle.co. With our new membership site UEvangelize.org we are learning to reinterpret customers who complain about membership fees as simply not part of our target market.

    Your post hits home! Thanks Stu.

  • Tasha

    Love it! I agree. 😀

  • Not sure I agree.

  • Kathy Gambrell

    This is only partly true. If someone provides a service, then there should be SUPPORT. Companies that provide cloud applications hide behind no phone support, online support “tickets” or only contact with tech support via social media to avoid actually talking to customers. If there’s no real support, then no, I am not going to pay you for software or an application that may or may not work. I just took 25 clients out of cloud platform because when it crashed, the only response from them was an answering machine message that said everyone was in a meeting and no one could answer our call. We couldn’t retrieve client data or meet deadlines. So why would we want to pay for that?

  • Carla Gadyt

    I am a Law of Attraction & Personal Empowerment Coach and work with high end clients – clients that pay the value I deliver and are committed to work with me. I don’t have “free” stuff online, but I do offer a 1 hour complimentary call (discovery call) and I also have many written articles and videos talking about the things I coach and giving helpful tips and ideas to people. This is how I feel comfortable sharing my knowledge “for free” without being actually free, but it is a way to help people. I wouldn’t feel comfortable doing free webinars or offering free coaching or doing discounts. Yes you need to be the client you wish to attract. Great article! 🙂

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