Seth Godin recently posted the difference between monopolistic businesses and those which actually appreciate their customers.
If you think about buying more marketing but have holes in the conversion process eventually you are going to get priced out of the market. Sure free samples may be a cost, but it is probably some of the cheapest marketing available, because free samples help you build trust and increase conversion rates by associating your brand with the product your customers want while they are actively looking for it - in a sense it is like an enhanced feature rich version of search. If giving away a sample costs $20 and samples lead to a 10% conversion rate, how does that compare to buying clicks at $2 each and ending up with a 1% conversion rate? If you do the math both of those will lead to a $200 cost per action, but one of them requires you to deal with far fewer people, and will be far more scalable, because any market is limited in size.
Popular bloggers that use their blogs to sell a book (maybe like me) sell many books or ebooks because their blogs keep the attention of potential clients and posts act as free samples. The beautiful thing about selling or giving away information is that there is an unlimited number of new things you can do or say, and an even larger number of ways to restate old thoughts or repackage old ideas. I still have at least a half dozen projects I really want to do soon, and rather than waiting on what to do there is always something I could be doing.
Getting people to pay attention is a cost. People not only convert better when given free samples, but free samples give people something to talk about and link at. If you are trying to build a brand from scratch and sell information then making piracy easy might be the difference between a successful business model and a failed brand that never got much exposure.
Branding and search relevancy are both largely about building mindshare. If you have no free samples, and expect people to take the plunge buying from an unknown source, you are going to need a rather compelling offer or a lot of hype to make many sales. Or you can take the desperate act of trying to win out on pricing, but in most cases that does not make for a sustainable long-term business model. Plus if you build significant trust you not only lower your marketing costs, but you can also increase your prices and expand your margins.
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