When entering a new market, working for free allows you to perfect your service without risk. It's the fastest way to gather social proof (testimonials) and build personal conviction, which are crucial for selling effectively later, giving you 'wiggle room' if the product is still rough.
Prepared tackled the slow GovTech market by providing its initial product for free. This strategy bypassed cumbersome procurement, built a large user base, and established the credibility needed to overcome the authority of entrenched, larger competitors.
James Ashford modeled his marketing on celebrity chefs who share recipes freely yet still have packed restaurants. He taught accountants exactly how to improve their pricing without his software, building trust so that when they wanted an easier solution, GoProposal was the only choice.
Hormozi's first million outside his gyms came from a 'free' offer where he paid for marketing and worked for free, keeping only the initial cash from new customers he acquired for gym owners. This demonstrates that 'free' can be a highly profitable acquisition model, not just a loss leader.
Despite their power, premium offers are a poor starting point for new ventures without established credibility. Use free or discounted 'foot-in-the-door' offers to prove your value and build a reputation, then transition to a premium model. This approach de-risks customer acquisition when you're an unknown entity.
A 'free' or 'pay-what-you-want' offer creates enough goodwill to ask tough, confrontational questions upfront. This allows businesses to filter for genuinely committed long-term customers, turning a lead generation tool into a qualification test.
To land its first skeptical customers like Drada, Merge offered its platform for free for two months without a contract. This de-risked the decision for the customer and allowed Merge to prove its product's value and the team's responsiveness before asking for a financial commitment.
Don't hoard your best material. Turn content that paying clients receive into free lead magnets. Prospects aren't paying for information, which is commoditized; they are paying for the applied insight and implementation of your ideas. This generosity builds trust and attracts more high-quality prospects.
Instead of pitching a future product, identify an enterprise champion's urgent, blocked project. Deliver the solution manually as a service first (e.g., a PDF report). This validates demand, generates revenue, and is a common path in enterprise software.
Counterintuitively, sharing your best knowledge for free builds immense trust and authority. This strategy proves your expertise and makes potential clients eager to purchase your paid implementation services, overcoming skepticism in a crowded market.
The primary barrier for new businesses is a lack of proof. It's more efficient to offer your service for free to 10 clients in exchange for testimonials. This social proof dramatically shortens the sales cycle and builds momentum for acquiring the first real paying customers.