How can something that’s free or almost free be top grossing? The answer is simple: Upgrades, add ons, and back-end purchases. These companies sell “other stuff” via “in app purchases”–additional tools, levels, or other capabilities–and enough people buy on the back end that they can afford to give away their product on the front end.
It’s the “freemium” business model and while the term is relatively new, the concept is as old as marketing itself. “Sampling,” as it is traditionally referred to, is a proven way to sell everything from toothpaste (coupons and trial size) to automobiles (free test drives) to Tempura chicken in the food court (a sample on a toothpick).
Even attorneys use it (free consultations).
The idea is simple: give people a taste and they’ll want the whole meal. The free sample allows the consumer to overcome doubt and indecision, to experience the product or service on a small scale, with no cost or obligation, before making the decision to buy. The more you give away, the more you sell.
How can you apply this to marketing your services?
If you’re not now offering free consultations, I suggest you consider doing so. Many attorneys resist this, claiming their time is too valuable, they don’t want to give away their expertise because that’s all they have to sell, and while these may be brilliant attorneys. . .
they’re not very good at math.
If you invest an hour of your time in a free consultation and get a $10,000 paying client as a result, I don’t know, that seems like a pretty good trade off to me. I know you say there are only so many hours in a day and you can’t equate giving away a game app with giving away legal services, but actually, you can.
It doesn’t matter whether you’re a six-year old with a lemonade stand or a partner in a 1,000 lawyer firm, the formula is the same:
- How much did you spend to get the business, and
- How much did you generate in revenue?
The difference, minus fixed costs, is profit.
And, since legal services are generally high ticket and high margin, attorneys are actually better suited to using sampling in their marketing. We can afford to spend more to acquire a new client since we earn so much more.
So, let’s take things a bit further. If free consultations work, how about free services? Could you offer a free or highly discounted service on the front end, knowing you will more than make up the difference on the back end?
Yes you can.
Which brings me back to the app store.
Recently, I’ve noticed a spate of new apps by lawyers, mostly personal injury firms. They explain what to do in case of an accident and provide a place to record information, take photos, etc., and they are free. The lesson isn’t that iPhone apps are a viable way to bring in clients, although they may well be, it’s that if you can’t or won’t give away a sample of your services, give away information.
Free information in any form–reports, tip sheets, checklists, booklets, audios, and iPhone apps–can do much of what a free consultation or free service can do–give prospective clients a taste of what you can do for them.
If you want more clients, give samples.
Update: After posting this, I saw this article discussing app pricing strategies, in case you’re thinking in that direction. Interesting reading even if you’re not.