How Does “Free” Impact Your Business?

by Jay Deragon on 02/11/2008

How Does Free Impact Business?The internet is free. The tools are free. Content is free. Social networks are free and users have gained the freedom of expression and connectivity without constraint for free.The only factors of user and producer cost is time, attention and trust.

The “free” model doesn’t fit well with traditional business models and mindsets. People have a hard time figuring out how to convert “free” to earnings. Most everyone considers the social web as a primary point of distribution for advertising and view advertising as the only means for converting free to earnings.

This paradox boggles the minds of many and most conclude that the social web does not contribute to earnings thus lets not spend lots of time, attention and resource engaging in all this “social activity”. Sound familiar?

Most Businesses Currently Provide Numerous “Things” for Free:

  1. Customer support is free although a bad experience may cost plenty.
  2. Slick & expensive marketing materials are free although over hyped promises may cost plenty.
  3. Communicating is free although many types of communications cost plenty.
  4. IT support, internal and external, is free although unresolved problems may cost plenty.
  5. Mediums that provide interaction with customers and suppliers are free although most are poorly designed and cost plenty.

There are a number of other “free” things that business builds into a product or service offering and the cost of “free” is built into the overhead to run the business. However, the cost of poorly designed “free things” and the subsequent impact on relationships, i.e. customers, suppliers and markets, is rarely measured or itemized on financial statements or shareholder reports.

The gurus of industry have always proclaimed the value of good relationships with customers, suppliers and markets yet the organizational designs and collective actions tend to but up barriers and create consistently poor experiences that alienate relationships with customers, suppliers, employees and entire markets.

Lets talk about two real time examples. Previously we had written a post about a very poor experience with Verizon’s customer support system which is touted as “free”. Just last week we spent over eight hours on the phone with our bank, Bank of America, trying to tract down a transaction.

After dealing with numerous phone prompts to get through numerous instructions we ended up being passed around to nine, count them, nine different people and to make matters worse none of these people could provide an answer as to where the payment went.

To fuel the frustration further every time we were put on hold the automated messages kept repeating “Your business is important to us and we value our relationships. Please stay on the line until our customer service representative can assist you. The next customer service representative will be available in NINE MINUTES!”.

In between this repeated message was “Have you tried our free online banking service? Bank of America provides its customers with free online banking to serve all your personal and professional needs“.

To further aggravate this situation none of the real people we talked to were allowed to give us their full name, direct phone number or email address. Go figure, just how important or valued is my relationship? Actions speak louder than words but words spread on the social web can indeed create actions.

Will This “Free” Message Be Copied and Create Influence?

Kevin Kelly writes: “The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free.

There are a number of qualities that can’t be copied. Consider “trust.” Trust cannot be copied. You can’t purchase it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, you’ll always prefer to deal with someone you can trust. So trust is an intangible that has increasing value in a copy saturated world”.

This blog has received 180,000 pages views since Jan.1 by over 30,000 “connected users”. Those users have second degree connections of over 3 million people. The social web magnifies peoples experience with business, good and bad. Bad experiences can be remedied by simply following the basics of creating good relationships. However, the very systemic design of many businesses are not friendly to establishing and maintaining good relations rather the “relationship experiences” are anti-social to say the least. Most people who read this post will relate and pass the message on, one to one to millions.

The social web is indeed free but the cost can be very high to those businesses that don’t understand the power of free. How good or bad you are at “free” could influence how much you “earn”.

What say you?

{ 1 comment }

Mark Kerrigan February 11, 2008 at 6:10 am

Spot on again, Jay! How important can we feel when we remain on hold for 15 minutes without speaking to an actual person rather than a machine? Businesses think that just because they say we’re important to them, we are. If we truly were as important as the recorded messages are intended to make us feel, wouldn’t they hire more people to take calls. The bottom line doesn’t permit them to have an extra five Customer Service Executives at any given hour! That’s what they need. Take whatever number of CAE/call-takers they have on staff at any given time and add, at minimum, five.
Depending on the complexity of the typical call the Customer Service personnel takes, it could become quite expensive to the business. But what is the cost to build better relationships with your most important assets? To quote Visa, “Priceless.”
How ’bout it?

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