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The Unbearably High Price of ‘Free’

Using the word ‘free’ in your marketing is a quick way to get attention, but it’s also a double-edged sword that has tripped up a lot of businesses.

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Using the word ‘free’ in your marketing is a quick way to get attention, but it’s also a double-edged sword that has tripped up a lot of businesses.

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June 13, 2021 5 min read

Opinions expressed by Entrepreneur contributors are their own.

One of the most powerful words in the English language is the term “free.” Do any of these phrases sound familiar?

  • “Buy one get one free.”
  • “Get a free gift with purchase, valued at $499.”
  • “Get a free eye examination.”
  • “Try our membership for FREE.”
  • “Get FREE delivery”

It seems like just about every company uses some kind of “free offer” in their marketing. So why is the term “free” used so liberally?

Because, frankly, it works — by appealing to our basic human emotion of greed.

The word “free” has appeared in more advertisements than there are grains of sand on a beach. And it goes way back to the genesis of advertising when giving free samples was the best (and only) new way to get customers. So what makes “free” work so well?”

Free gets attention. It makes people feel like they are getting a great deal. On a subconscious level, it works in reverse, too — you feel like you’re missing out if you don’t take advantage of something for free.

But using the word “free” in your marketing can be a double-edged sword, especially if you don’t use it correctly.

Related content: The 5 Triggers of Psychological Pricing

Is there a wrong way to use the term “free” in your marketing?

Absolutely. There are thousands of ways that using the term “free” in your marketing can trip you up, reduce your product or service value, and do irreparable damage to your brand.

Let me give you a real example. One of our clients was in the business of producing extremely high-end Italian-made leather shoes and bags for men. Their most famous pair of boots retailed for $3,500. Their most popular bag, a messenger-style laptop bag, retailed for $950. The company’s previous marketing agency advised them that the best way to double their boot sales would be to offer the messenger bag for free.

As far as irresistible offers go, that’s a pretty good one, and it did in fact, increase sales of the boots — in the short term. But it was a strategic disaster in the long term because now they had conditioned their clients to expect the messenger bag for free.

In other words, by offering it for free, they had completely devalued that product (remember it was the company’s top-selling bag.) Even worse, by offering something of high perceived value for free, they had also damaged their own luxury brand. Why would people ever pay full price again?

The good news is that people have a short attention span, and with the right strategic pivot and messaging, you can erase the damage of using “free.” But it takes time.

The same dangers apply when you start using discounts in your business. If you discount your products, why would people ever pay full price? They just wait for them to go on sale. When our Italian client came to us, they had a branding and sales disaster on their hands through no fault of their own. Fortunately, we were able to get them out of their pickle by repositioning their products and reinventing their brand — a move that resulted in them being purchased eighteen months later by a competitor.

Moral of the story: Using a free offer can be a slippery slope and must be used sparingly and carefully.

Related: The Price Is Right: How to Price Your Product for Long-Term Success

Before using “free” in your business, ask yourself:

  • Does this have a real value that we depend on for revenue?
  • By offering this item or service for free, will this adversely impact another related service or product (for example, if you offer the first consult for free, and expect to be paid for all future consults)?
  • Why are we considering offering something for free? What else could we offer that would help us achieve the same result?
  • What if it’s not your business using “free”, but your competitors?

    Now, if you’re on the other side of the fence and your competitor is offering something for free that you are charging for, it’s time to put your marketing into high gear.

    Just because there is no money exchanged doesn’t mean that it’s not paid for in other ways — for example, in lost time, huge frustration or poor quality.

    Think of the experience and quality of “free” healthcare versus a private plan. Draw these analogies in your marketing to establish your value in the minds of your clients.

    “Free” is still a mighty word used to grab attention in marketing. But handle with extreme caution, and don’t be lured into using it to stimulate short-term sales at the expense of long-term growth.

    Related: 3 Lessons About Setting Your Price Learned From a Vegas Prostitute

    It seems like just about every company uses some kind of “free offer” in their marketing. So why is the term “free” used so liberally?

    Source: http://feedproxy.google.com/~r/entrepreneur/latest/~3/-ft2fOOD5wI/372155

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    Entrepreneur

    How Success Happened for Josh Harris, Co-Founder of Apollo Global Management and Co-Founder of Harris Blitzer Sports & Entertainment

    Harris has a knack for building and growing forward-thinking ventures.

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    Harris has a knack for building and growing forward-thinking ventures.

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    Stay informed and join our daily newsletter now!

    July 13, 2021 5 min read

    Opinions expressed by Entrepreneur contributors are their own.

    Josh Harris has a short resume. For nearly his entire professional career, he has held only one job, sitting at the helm of Apollo Global Management.

    Since co-founding Apollo in 1990, Harris has spent the last 31 years building and shaping what has become a leading alternatives asset manager. But even with 15 offices globally and over $460 billion in assets under management, Harris has found time to pursue passions outside of the financial industry. With an eye for uncovering potential value, the investor maintains a robust family investment office, is an active philanthropist through family foundation Harris Philanthropies, and has successfully launched a premier sports and entertainment platform, Harris Blitzer Sports & Entertainment, which has grown to include the Philadelphia 76ers, New Jersey Devils and Prudential Center in Newark New Jersey.

    Related: Check out recent guests Josh Harris and Thomas Tull on the How Success Happens podcast

    Harris credits wrestling for unlocking his internal drive. After participating in wrestling at summer camp at a young age, he was hooked. The intensity of the sport and raw physical strength it demanded was motivating and compelling to his innate competitive spirit. But he quickly learned that without preparation — a healthy diet, cross-training and time on the mat — you get physically dominated. Once a struggling student, wrestling helped Harris turn his academics around and earned him acceptance to the University of Pennsylvania — and a coveted spot on the wrestling team there.

    It was at Penn where Harris first got a taste of finance. An introductory economics class ignited a similar spark within him, compelling him to go to the fast-paced world of Wall Street. He transferred to Wharton and dove headfirst into finance.

    “I was allured by [the idea of] helping companies grow,” Harris says. “I was a sponge for knowledge and wanted to learn everything I could … from the best people.”

    The decision was made. He bought his first suit and headed to Wall Street.

    “This is what I would recommend to [anyone just starting their career]: Treat your life like an investment,” Harris says. “Do something you are passionate about … look at the upsides, the downsides. What is your competitive advantage? … Really look at it analytically.”

    Harris used that same lens when faced with an even bigger decision, several years into his career. After cutting his teeth at Drexel Burnham Lambert and attending Harvard Business School, Harris accepted a position at Blackstone. A few weeks in, he got a call from former colleagues Marc Rowan and Leon Black, asking him to join a new firm, the fledgling Apollo. Harris had worked only weeks at Blackstone — and used his signing bonus to pay off his student loans — but he was enticed by an opportunity to build with people whom he knew.

    Fast forward thirty years, Apollo has become the second-largest alternatives and largest alternative credit manager in the world. Harris has been the architect of some of the firm’s most successful deals, including the historic LyondellBasell transaction, one of the most profitable deals in PE history.

    In 2011, Harris applied skills from his day job to a new venture — joining forces with David Blitzer to purchase the Philadelphia 76ers from Comcast in a corporate carveout. One of the most rewarding aspects of owning sports teams, Harris says, has been serving as a steward of the city.

    “[Sports teams] are public assets…you take on a real obligation to help the communities where you are playing,” he adds.

    Related: Check Out These Top Sports Podcasts

    Giving back to the communities where HBSE operates — namely Philadelphia, Camden and Newark — is of top priority for Harris. In our conversation, it was clear how deeply he believes in the power of sports to change lives, just as wrestling had changed the trajectory of his life. Through his many charitable endeavors with HBSE and Harris Philanthropies, Harris is focused on creating opportunities for kids to experience sports who might not otherwise be able to, providing access to sports programming and pairing it with academic resources and other support. More broadly, Harris Philanthropies is focused on catalytic giving and creating equitable opportunities in the communities where the Foundation has a deep connection.

    In the past year, however, Covid-19 was front and center, requiring the Foundation to adjust their strategy to address needs brought on by the pandemic. We [immediately] had to pivot [our strategy] and lead,” says Harris, who through HBSE and Harris Philanthropies, set to work distributing food, medical supplies, frontline equipment, laptops and other resources to local communities.

    Now Harris is starting a new chapter, returning to his entrepreneurial roots. Having recently announced that he’ll be stepping back from his day-to-day role at Apollo, Harris is excited about continuing to expand HBSE, as well as his multi-asset class investing business and diving deeper into social impact. But he hasn’t lost touch of what has driven him throughout his career — building and investing in success.

    Related: Let us Help Your Brand Create Its Own Podcast

    Related: Check out recent guests Josh Harris and Thomas Tull on the How Success Happens podcast

    Source: http://feedproxy.google.com/~r/entrepreneur/latest/~3/j7fh3NY-vQE/374991

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    Virgin Galactic Cleared by FAA For Passenger Space Travel

    Will billionaire and founder Richard Branson beat Jeff Bezos to space?

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    June 25, 2021 2 min read

    Opinions expressed by Entrepreneur contributors are their own.

    Richard Branson’s Virgin Galactic, in a statement, announced the FAA has upgraded its existing license to include passenger flights.

    The company also says the approval is the first of its kind. Shares jumped 12% in premarket trading.

    The journey, however, has been somewhat bumpy, Engadget reports. In December 2020, the company’s test flight ended in a motor ignition failure. In February of this year, Virgin Galactic delayed its tourism flights until 2022 saying more “technical checks” were needed.

    Related: Virgin Galactic’s VSS Unity Completes Human Spaceflight

    The company then had to complete dozens of verification and validation requirements to clear the final two steps for the FAA’s approval. CEO Michael Colglazier says the crewed test flight on May 22 was a success:

    “We’re incredibly pleased with the results of our most recent test flight… [which] performed flawlessly, and the results demonstrate the safety and elegance of our flight system. [We’re confident] as we proceed toward our first fully crewed test flight this summer.”

    Related: Elon Musk’s SpaceX signs alliance with Google Cloud to offer satellite internet with Starlink

    The company, which began working on its mission to space in 2004, says it’s preparing for the remaining three test flights.

    Unconfirmed reports also suggest Virgin Galactic is working to send Branson on a suborbital flight during the July 4 weekend, according to Business Insider. That’s two weeks before Jeff Bezos is scheduled to board his Blue Origin’s New Shepard for space on July 20.

    Related: Blue Origin Is Challenging SpaceX’s Artemis Lander Contract From NASA

    Source: http://feedproxy.google.com/~r/entrepreneur/latest/~3/MOGXdxbDu3A/375771

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    10 Deals for $20 That You Won’t Find on Amazon

    After all, Amazon doesn’t have everything.

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    After all, Amazon doesn’t have everything.

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    June 21, 2021 4 min read

    Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

    Despite diversifying its options over the past few years, Amazon doesn’t have everything. One of its biggest shortcomings is its lack of educational resources. If you’re looking for a more substantive purchase, consider investing in your own professional development. We’ve rounded up a collection of courses you won’t find on Amazon and, for a limited time, they’re all just $20.

    The Professional Microsoft Excel Certification Training Bundle

    The Professional Microsoft Excel Certification Training Bundle

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    Microsoft Excel is the world’s most ubiquitous office software, used in just about every industry. You may think you know Excel, but after this eight-course bundle from Excel Maven, you’ll understand just how little you knew. You’ll cover advanced formulas, data visualization, PivotTables, and much more.

    Get The Professional Microsoft Excel Certification Training Bundle for $20 (reg. $1,600) for a limited time.

    The Fundamentals of Real Estate Investment Bundle

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    The real estate industry is booming, for both commercial and retail investors alike. In this five-course bundle, you’ll learn how to think like a professional real estate investor. You’ll explore pre-investing practices, wholesale deals, and much more.

    Get The Fundamentals of Real Estate Investment Bundle for $20 (reg. $1,000) for a limited time.

    The Google Analytics Master Class Bundle

    The Google Analytics Master Class Bundle

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    Google Analytics is one of the best tools for businesses to understand their web traffic. In this bundle, you’ll learn how to use GA to draw better insights from your traffic data and institute changes to make your webpages as strong as they can be.

    Get The Google Analytics Master Class Bundle for $20 (reg. $995) for a limited time.

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    The Ultimate Financial Accounting & CPA Certification Training Bundle

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    Every business owner should have at least a functional financial skill-set. In this bundle, you’ll learn how to be the accountant for your business with the same education a Certified Professional Accountant (CPA) would get.

    Get The Ultimate Financial Accounting & CPA Certification Training Bundle for $20 (reg. $1,592) for a limited time.

    The Ultimate Candlestick Trading & Analysis Masterclass Bundle

    The Ultimate Candlestick Trading & Analysis Masterclass Bundle

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    Earn some extra money in the stock market by learning the trading techniques employed by the pros. This technical analysis bundle will teach you how to analyze candlestick patterns and use data to make more informed investment decisions.

    Get The Ultimate Candlestick Trading & Analysis Masterclass Bundle for $20 (reg. $1,000) for a limited time.

    The Premium 2021 Project & Quality Management Certification Bundle

    The Premium 2021 Project & Quality Management Certification Bundle

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    After a lengthy pandemic that hurt many small businesses, it’s important to hit the ground running in this hot economy with more efficient and productive processes in place. This bundle will introduce you to a range of project management methodologies, from Agile to PMP, to help you institute positive changes in your business.

    Get The Premium 2021 Project & Quality Management Certification Bundle for $20 (reg. $4,400) for a limited time.

    The 2021 Complete All-in-One Adobe Creative Cloud Suite Certification Course Bundle

    The 2021 Complete All-in-One Adobe Creative Cloud Suite Certification Course Bundle

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    Got a creative streak? Indulge it! This extensive bundle covers the entire Adobe Creative Cloud, teaching you how to edit photos with Photoshop, become a graphic designer with Illustrator and XD, edit videos with Premiere Pro, and much more.

    Get The 2021 Complete All-in-One Adobe Creative Cloud Suite Certification Course Bundle for $20 (reg. $2,400) for a limited time.

    The Complete Mobile & App Development Bundle

    The Complete Mobile & App Development Bundle

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    Got a brilliant app idea? Learn how to bring it to life with this nine-course bundle. You’ll get an introduction to building apps for iOS 14 using Swift 5, learn how to build apps for Android 11, get up to speed on Java programming fundamentals, and more.

    Get The Complete Mobile & App Development Bundle for $20 (reg. $1,791) for a limited time.

    The Create Your Own T-Shirt Side Business Bundle

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    You know a great T-shirt idea when you see (or say) one. If you have a tendency to say “that should be on a T-shirt” after saying something out loud, you might just want to start a T-shirt side business. This extensive bundle will teach you everything you need to know, from printing shirts to packaging.

    Get The Create Your Own T-Shirt Side Business Bundle for $20 (reg. $1,393) for a limited time.

    The Cryptocurrency with Ethereum & Solidity Blockchain Developer Bundle

    The Cryptocurrency with Ethereum & Solidity Blockchain Developer Bundle

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    Take a deep dive into one of today’s most exciting, innovative technologies. Across six courses, you’ll learn how to build web apps that run on a blockchain using Solidity, launch an Initial Coin Offering (ICO), and even build a decentralized exchange.

    Get The Cryptocurrency with Ethereum & Solidity Blockchain Developer Bundle for $20 (reg. $1,200) for a limited time.

    Prices subject to change.

    Get The Professional Microsoft Excel Certification Training Bundle for $20 (reg. $1,600) for a limited time.

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