Ray worked with B-2-B and Consumer clients throughout the world ... including USA, Canada, Mexico, Asia, the South Pacific, Europe, the Middle-East, Central & South America, Africa.

This website is a compilation of Ray's 10 years on the Web.

 
The Works of Marketing with Ray INDEX

July 9, 2002• Volume 2 Issue 5

How Much is "Free" Costing?

There's been a wealth of material written about the Web.

Some has been hype. Some pure public relations, with little to no real value. Some pure nonsense. And some to get a response ... more or less an open focus group, to see what the marketplace will say and do. We're in that phase now with the "No More Free Lunch" approach to marketing.

Through the spring and now into summer there has been considerable discussion about the cost of providing "free" information via the web. And what some companies are doing about it. Bottom line there is a change afoot. Much of what was once "free" in the world's largest library now has a fee attached to it. And many more sites will charge - beginning soon.

I agree with this approach. I think there should be a charge for good, useable material. Let's turn it around, and ask why should a newspaper or magazine on the web be free ... when you shell out good money to buy a copy on the newsstand? Ditto research - you pay a sum to get a document ... why should there no charge just because it is more convenient to you online? "Yes", I think there should be a charge.

You may say I can read newspapers, magazines and more "free" in my local library. Yet, that's like saying education is "free". It is only free because you pay taxes to support the service. So there is a charge - it's in your tax bill.

Still, why pay for web based services? Because there is "No Free Lunch". Just because material is posted on the web does not automatically make it free. I've never understood that philosophy. Which, by the way, will not fly as a long term business or marketing strategy. And, as a direction itself, is not one that leads to profits.

Sure, I understand "show & tell marketing" is a strong offer. Has been, is and shall always be when the word "free"is in the title. You may recall a few E-zine issues back I talked about launching an Automatic Teller Machine network. It was the mid '70's ... and "yes", we actually paid people to try this funny new box that spit out money. That approach worked to build a market. Which today is "standard", and expected. When was the last time you went into your bank - when you had a choice of an ATM?

I'm penning this article on a Sunday. Today I paid a $2. fee to get into my ATM account. Why? Because it was 40+ miles to my bank, and it was closed anyway ... it's Sunday. Plus, another bank was closer. So, I chose to pay a fee rather than drive the distance. It's called use of time. Convenience. Customer service. Do I like paying? Of course not. Do I understand - absolutely!

Initially, to pull an audience in, giving away the store over the World Wide Web was a good move. Yet today, with over half the working population on computers, and something around 60% active both at home and in the office, marketing, advertising, merchandising and sales promotion can begin making offers that require a commitment from the customer. And in so doing, collect a little cash, too.

We in direct marketing certainly understand a smaller targeted market, vs mass. "Why talk to everyone when you only want to talk to someone" is a favorite quote from friend Drayton Bird of the United Kingdom. As usual, Drayton is right.

How does this philosophy apply to fees and the web? Well, if you are truly interested in a topic, a subject, a position, you're much more likely to be willing to pay to learn more. What many firms are doing is offering a selection of their wares "free". The base content is available to you. When you need more, or want it deep, the real stuff, the total picture, the complete story - then there is a charge.

One of my favorite E-zine messages is from Today's Useless Facts. A tongue in cheek list, including dialogue from readers about various "facts". The base list comes every couple of days - and is free. When you decide you'd like to subscribe for the premium version it's $4.95 for 3 months service. The web site (Premium Version Of Useless Facts Daily - http://www.uselessfacts.net/premium/) allows you to enjoy more for a very small charge.

My favorite E-card place is Blue Mountain - now part of the American Greeting family (http://www.bluemountain.com/). Originally Blue Mountain was a free site. Within the last year they went to $11.95 a year for their full collection of card offerings. With a smaller selection of basic cards being available at no charge.

"Yes", there was an uproar. They lost 30% of their audience almost immediately. And in return signed on 500,000 subscribers within 3 months (including me the first day I knew about it). It looks like there will be 3 million paid by the end of 2002. My math's not very good - yet, that appears to be a good hunk of change.

The Wall Street Journal did an in-depth article on pay vs free. And reminded me of the cable television business. I recall talking to one of the key players from CBS in the late '60's, who was trying to sell a paid television service. It went no where. The market did not understand the value of paying for something that for nearly two decades they had received for the price of a TV set and a tad of electricity. Basically, free.

Well, where is cable today? Where has it been since sometime in the 1980's? Cable and satellite and other services are in our homes, the hotel room, sports bar and restaurant, the casino - darn near everywhere. There is a rare middle-income and up household without some sort of television service for which they pay a monthly fee.

Bingo. The World Wide Web is headed that way, too.

Another example outside "E"; OnStar is the subscriber service offered through General Motors on selected models of their automobiles. OnStar is a satellite / mapping /emergency ++ service which helps drivers be safe, get to where they're going, and more.

OnStar users get their first year free. The package comes with the GM car they buy. Beginning with year two they have a selection of 3 different packages that range in price from $17. to $70. a month. As an example, the premium package includes prepaid cellular minutes .

So, as cable television played with the marketplace until they were ready to buy, OnStar is doing the same. In fact, they are following the WWW model; giving it away free to build a loyal customer base. And then charge a reasonable fee. In the last 3 years the OnStar paid base has grown from 200,000 to 2 million.

You know I ride a real bike - I ride a Harley-Davidson. The Harley Owners Group is a membership organization. You may ride a Harley and not be a member of HOG. Yet, to encourage membership, your first year is free when you buy a new bike from any Harley dealer - anywhere in the world. After that there's a yearly fee.

Well, HOG is now the largest motorcycle membership organization on earth. Something close to 600,000 members. The same philosophy - give it away to show benefits and value. Charge to keep the true-blue members.

So, the World Wide Web is going to cost you something. Big deal! It's worth it.

What's Next?
... from Monday, December 17, 2001 B.C.

I'm ready to share this "new" concept with you.

And I'm ready to do it today. To book an hour or two or three to give you this different, interesting, meaningful, warm and true action presentation. To your club. Your company. Your organization. Your association. Any group you have.

A true and "live" message. It shares putting things in perspective. i.e., first things first. You know, like many of us (including me!) don't do. At home or the office.

This presentation is about how each of us, in our business lives and personal lives, will get more out of life when we re-arrange our thinking. When our actions mirror what we know we should do. Many think one way - act another. This set is about how to do what we know we should - and do it every time.

Interested? E-mail me ... Ray@RayJutkins.com and let's make it happen. Look forward to hearing from you. Soon.

The Telephone is NOT "Out to Lunch"!

At least not in the USA.

As a business tool, for both consumer marketers and those in B-2-B, the telephone is a major source of communication. To get and take orders. Find and qualify leads, too. In my estimation, that isn't going to change anytime soon.

Even with the flood of negative legislation, do not call lists and gobs of bad press, thousands of transactions totaling billions take place over the telephone.

Three clients I've worked with this year would each be out of business without the telephone. Yes, they each have major web sites. Two sell product online. They all use direct mail promotions to customers and prospects. With a FaxBack option for response. All three use print advertising to get new business. Two find trade shows in their industry productive.

Yet, take away the telephone and they die. Flat out go away!

Why? Because customers expect to have questions answered, orders taken, issues addressed via phone. Possibly confirmed by E-mail or mail. Most business is still done voice-to-voice. If not face-to-face, we still like a "live" person to talk with. The telephone is the perfect answer. Even with other communication options.

During the late spring the American Teleservices Association reported this from a survey;

  • 41% of all Americans have initiated a buying process via the phone.
  • to compare, 45% have ordered over the web.

(My guess is, if these people are anything like me, they are the same. As I've done both. Many times.)

The same research reports . . .

  • women buy over the phone at a 45% rate, men @37%
  • 43% of women buy online - men at 45%

Geography does make a difference;

  • in the west 51% prefer the Internet - 34% the telephone
  • in the northwest 55% prefer the phone, 47% over the net

The web is growing in popularity. More people are turning to it to do business. Still, telephone purchases remained almost the same in the years 2000 and 2001.

Sure looks like the telephone will be around for a while.

Anonymous

This week's words from Anonymous are right-on.

There appears to be a large group who like to "just do" - with no consideration of what that really means. Who it might affect, is the timing right, how much it costs - does it matter. Anonymous addresses the issue this way;

"Learn the rules so you know how to break them properly."
an Anonymous Buddhist proverb

If it's true rules are made to be broken (I think they are!), then you most certainly must know what you're breaking. As just maybe you don't want that to happen!

"Quotes with Direction" has been a part of my web site collection from day one. If you like quotes visit the archives ... www.rayjutkins.com/quotes/. There's a new batch up every 4 weeks.

 

A Baker's Dozen -
The 13 Prime Direct Marketing Numbers

Direct marketing is a numbers business.

Most often we think of the back-end, the results, when we think DM and numbers.

This Baker's Dozen Collection is about the creative process. And how to "think" your writing. So it will be read. So it will be understood. So you will get a higher result - a larger and more profitable back-end.

Every so often we hear "news" reading is down. Fewer people reading - those reading doing it less. I find this . . .

For the rest of this Baker's Dozen story, and the 13 numbers ... Click http://www.rayjutkins.com/baker/baker15.htm.

Magic Marketing Minutes

Each week I'll share with you a different direct mail marketing tip.

If you're not using direct mail, maybe you should!

No matter, many of these ideas work for other media, too. Read, and give 'em a try. If you are making direct mail a part of your marketing - EnJoy!

What Happens to Your Admail?

What do most people do when they look at their mail? All of their mail? Not just Admail, but all of their mail? Research indicates this is what happens:

1. They open it immediately. It's important. It's urgent. It's interesting. Something about it gets their attention immediately and they open it at once.

2. Or, they put it in the stack to read nights and weekends. It's interesting but it's not important. It can wait. And how many of us are caught up with our night and weekend reading stack?

or 3. They route it to somebody else. They circulate it to another. They pass it on. It's not for them - it's for somebody else. And this happens both at home as well as in the office.

4. They round file it. They toss it. They trash it. The waste basket. The bin. They throw it away.

And, what's most interesting is that one of these 4 actions: to read it, or stack it, or route it, or toss it takes place in just 2 or 3 seconds per piece of mail.

What does this say to you? It says your Admail better be good ... it better be interesting!

For more marketing tips, visit http://www.rayjutkins.com/mmm/.

The Works of Marketing with Ray INDEX

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