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The Road to Perdition is Free in B2B

But anyone who gives their core proposition away for nothing in B2B deserves to be cast out into the wilderness.

 

No matter how tempting, giving away your products and services free is not the path to paradise for the B2B Market. I’m not talking about a free “demo” to give you a great chance to up sell or some data capture disguised as free information and advice, but offering your core business for free, even for a short period of time.

 

For one thing, such offers demonstrate an ignorance of how businesses actually work. There is no such thing as ‘try me free’ for a business. The time spent having a conversation with you about the offer will cost the customer money. There’s also the costs of getting their people trained/aware of the new product/service; the implentation costs which could include downtime, risk, documentation changes, process and compliance checks and so on.

 

There’s also the cost of the personal risk the buyer is taking by accepting your kind offer. If the project goes less than perfectly, having been reliant on a special offer from a vendor is unlikely to go down well at board level.

 

In business, if something has no price, it’s perceived as having no value. Business people know business. They know no one can afford to give things away for free for ever. So they’ll either suspect hidden charges, much bigger costs to come or the risk of being left to clean up after a bankrupt supplier.

 

Giving things away free hints at worthlessness and desperation. If your products are so good why do you have to give them away? As one CEO wisely said to me, “We’re looking for better than free”. He meant that he was looking for suppliers to add much more to his business than he was paying them. If you’re charging nothing, you’ll signal that you’re adding nothing.  Business Economics 1.01 tells is that any price must be less than the total value you bring to your customers, otherwise you have no sale.

 

Even if the switching costs are low, the likelihood is that all the value in the market will be sucked out as free offers become the norm and customers spin from one free deal to another. 

 

And of course once a “free” trial is over, there’s the near impossible task of getting someone to pay for something that was free.

 

The best things in life may be free, but you should keep it to B2C!