When free is just another word for nothing left to lose
| Category: Marketing Strategy | Date: 2002-10-02 |
Amulet Development Corp. (www.amuletc.com) launched its own web service eCriteria (www.ecriteria.net) an affordable and time efficient database design/publishing resource for beta testing in mid 1999.
At this time the economy was still thriving and IT investing was still on the cusp of the highest success. This service would meet the demands of database development with a much greater efficiency and durability than previous responses. We also found that by adding this service we were also better able to manage and organize our additional programming services and business development goals. We were very optimistic with regard to our Marketing and Public Relations surrounding this one of kind service.
We decided to offer our service in two forms both a free Basic Service and a low fee based Premium Service, this was and still is a popular strategy for new eBusinesses striving to make an impact in new territory.
What we ultimately discovered after nearly two years of persistent in house CRM was that nearly 70 percent of our customers opted for the non-fee based services though it meant less features and significant space limitations. We even expanded to include the much larger Enterprise version, which also included an impressive amount of technology upgrades for a competitively low rate of $39.95 a month. This lowered our ratio of paying vs. non- paying memberships by less than 10 percent.
Though we received much applause and press for our service, the free offering, and we did increase interest by broadening our services to accommodate larger businesses / enterprises we still experienced a loss on our programming investments because our free service was far more appealing than having to pay even a very low fee.
This is where idealism marketing ceases to be an effective strategy. Finally, in order to preserve the idea that was right for IT evolutions, that being the now popular web service. We had to abandon the free aspect of our basic service with a small but helpful $4.95 service charge, while we have kept our free 30-day trial to encourage new interest.
The lesson here is to know when to cut back on incentives. It’s great to be able to encourage business by means of generosity, however, its important to realize the difference between being popular and sustaining business objectives. In most cases, giving back is a way to show your customers that their loyalty is appreciated. On the other hand, it is equally important to secure this loyalty first.
Now, we have lost some business as a result of this turn around, however, with every new paying member we have secured an investment in the future of our endeavors. Old lessons of wise investing, still apply in today’s eBusiness marketing.
About the author.
ecriteria@hotmail.com
http://www.ecriteria.net
At this time the economy was still thriving and IT investing was still on the cusp of the highest success. This service would meet the demands of database development with a much greater efficiency and durability than previous responses. We also found that by adding this service we were also better able to manage and organize our additional programming services and business development goals. We were very optimistic with regard to our Marketing and Public Relations surrounding this one of kind service.
We decided to offer our service in two forms both a free Basic Service and a low fee based Premium Service, this was and still is a popular strategy for new eBusinesses striving to make an impact in new territory.
What we ultimately discovered after nearly two years of persistent in house CRM was that nearly 70 percent of our customers opted for the non-fee based services though it meant less features and significant space limitations. We even expanded to include the much larger Enterprise version, which also included an impressive amount of technology upgrades for a competitively low rate of $39.95 a month. This lowered our ratio of paying vs. non- paying memberships by less than 10 percent.
Though we received much applause and press for our service, the free offering, and we did increase interest by broadening our services to accommodate larger businesses / enterprises we still experienced a loss on our programming investments because our free service was far more appealing than having to pay even a very low fee.
This is where idealism marketing ceases to be an effective strategy. Finally, in order to preserve the idea that was right for IT evolutions, that being the now popular web service. We had to abandon the free aspect of our basic service with a small but helpful $4.95 service charge, while we have kept our free 30-day trial to encourage new interest.
The lesson here is to know when to cut back on incentives. It’s great to be able to encourage business by means of generosity, however, its important to realize the difference between being popular and sustaining business objectives. In most cases, giving back is a way to show your customers that their loyalty is appreciated. On the other hand, it is equally important to secure this loyalty first.
Now, we have lost some business as a result of this turn around, however, with every new paying member we have secured an investment in the future of our endeavors. Old lessons of wise investing, still apply in today’s eBusiness marketing.
About the author.
ecriteria@hotmail.com
http://www.ecriteria.net
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