How to Convert Free Traffic Into Paying Customers

Oftentimes, when I talk to people about internet marketing, if they’re listening, they quickly come to a sudden realization.  “It seems like you’re giving away a lot of stuff for free.”

It’s true.  The internet has created a culture of free.  On the web, craftsmen demonstrate how to perform tasks that they would normally charge for.  Accountants and lawyers dole out advice that once upon a time they billed for.  Software makers give away their products.  Writers publish their writing publicly, without even the modest advances that they would get in print.  Artists post their work for all to see, free of charge.

“If you’re giving everything away for free, how do you make any money?”  That’s a question that a lot of people have struggled with on the web.

There seems to be two main approaches to dealing with “free.”  The first is to reject the notion of free altogether.  If you create something of value, you should be compensated for it.  While I agree with that argument, notionally, in the long run, it’s doomed to failure.  The internet has created this culture of free, and like it or not, it’s going to continue.  There will always be a group that’s doing exactly what you’re doing, but for free. That group will get bigger, and if you’re the only guy in the field who’s charging, how good do you think your chances of surviving in the long run are?

The alternative is to embrace “free” and find ways to still make money while doing so.

The Freemium Model

The Freemium model – popularized by Chris Anderson, the founder and editor of Wired magazine – is possibly the most popular business model among web start-ups.  The idea is simple.  You offer a product or service for free, but you also offer a premium version of that same product or service for a fee. On the web, you find feature charts on any website where you can download an application.  The feature chart outlines what features come with the free package, and then shows you the additional features you get when you purchase the basic package.  Then more features you get by buying the Plus package.  Finally, even more features you get purchasing Gold package.

The freenium model has been shown to work when the right balance is struck between what to offer for free, and what to charge for.  If you lock too much up behind a pay wall, then you’ll never get the traffic necessary to start rolling.  If you give too much away, all your resources will be devoted to creating free products, and you’ll be bleeding money.

The Other Kind of Free

The alternative is to offer a substantial amount of content for free, but then to offer a different, but related product for sale.  Content sites will often do this by selling merchandise.  This can also be viewed as the “expert” model, because it often involves creating a reputation for yourself as an expert by giving away advice, and then creating products that you can sell based on the strength of your reputation as an expert.

In order for this free model to work, there are a few key points to recall.

First, recall that “free” is a numbers game.  Never will 100% of your website’s visitors (who mainly come for the free stuff) buy your products.  Instead, the idea is you reach a wide audience with your free content, and a certain percentage of those will be interned in purchasing from you. The goal is to convert as many visitors into paying customers as possible.

Second, remember that even those that aren’t buying from you, are still valuable.  The people who don’t buy, may still lead others to your enterprise. These secondary connections can be more valuable than if the visitor had just purchased from you and gone on his merry way.

Third, despite talking about doing stuff for “free,” recall that what you’re doing is still marketing. You’ll need tight copy that reminds your readers/fans/followers/tribespeople what the benefit is to them of purchasing your product.

Finally, if you’re going to follow this tactic, be sure to make it clear from the outset that you’re going to be selling something.  The most important thing you have is the trust relationship between you and your visitors. Part of trust is transparency and honesty. If you have visitors that are used to getting free stuff and you suddenly hit them with heavy-handed sales pitches out of left field, they’ll annoyed, frustrated, and abandon you.

The “Thank You” economy

As far as I know, Gary Vee is the one who coined the term the “Thank You” economy.  Gary for years has created and hosted a web TV show, 5 days a week, reviewing wines.  He also answers every e-mail he receives, and spends hours every day actively interacting with his hundreds of thousands of twitter followers.  He does all this for no charge.

Gary coined the “Thank You Economy” to explain what he gets out of it.  Gary accepts that what he’s doing is free, and that the vast majority of the people who watch his show, or read his blog, or take advantage of his wine recommendations will never give him any money.  However, there is that portion of his followers, his fans, his tribe, that will thank him for all he’s done, and when he does a paid product, they will thank him by purchasing it.

Gary proved the effectiveness of this method when his first book came out late last year and became a best-seller (Amazon affiliate link) as soon as it went on the market.

Thank you.