AP 0026: Why Do You Give Stuff Away for Free When Other People Charge?

AskPat 26 Episode Transcript

Pat Flynn: Hey, what's up everybody? Pat Flynn here, and welcome to Episode 26 of AskPat. I'm here to help answer your online business questions daily. Five days a week. And today I want to mention a resource which is actually a presentation that I did at New Media Expo couple years ago.

This is all about the power of using “free” in your business and why you should be using some component of “free” in your business to make more business. You can check out that presentation at AskPat.com/poweroffree. One word.

And that, of course, has to do with today's question from Jerry. So let's get to today's question from Jerry right now.

Jerry: Pat, tell me . . . I understand why you do not charge. I'm just confused why there's so many out there that do charge and do basically the same thing or same set of things that you're doing. I'm confused. I get this. I believe in it. I think you're very, very sincere. I respect your success. I really just don't get what . . . you know, why you give it away and you know what that theory is. And who . . . does it pay to purchase the information, learn it fast, streamline it? Or learn it the hard way like most have? I'd be interested in your comments, thanks.

Pat Flynn: Jerry, thank you so much for your question. And to answer your question, I want to tell you a story about how I got started in my online business, which directly influenced my business model that I've adopted and that I share and that I teach and that I use today, which is the business model of giving it all away for free.

Give it all away. All of it. Hold nothing back. Because it will pay you back in return. It will reward you. However, you must also, while giving away a ton of value, giving it all away for free, also give people an opportunity in some way to pay you back. I think that's where a lot of people fail with this “free” thing. That they're either taking my lead or they, you know, they know the power of free, because free just gets people to move. It gets people to do things that they wouldn't normally do if they had to pay. Which is why I love free. It's a great way to introduce yourself to somebody or to provide value. But a lot of people fail because they are giving it all away for free, but they're not giving people an opportunity or opportunities or a method or just ways to pay them back in return. And you . . . you mean, you're providing value, you deserve to get paid for that as well. And I'm going to share some ways that I'm able to do that. But I love this business model because it's a win for everybody. Right? I'm giving away stuff for free and I'm feeling good with helping people. And because it's free people share it, and then I become an authority or a thought leader, and people will go out of their way to find an opportunity to pay me back.

And the way this started was actually from my first online business. This is where I learned about this business model and why I continue with it today. Because what happened was . . . actually in 2007, I wanted to pass this exam. It was a really, really, really, difficult exam in the architecture industry. Well, to help me pass this exam, I created a blog to help me keep track of my notes because I knew a blog was a great way to organize things like that. So for about a year to a year and a half, I actually put content on this site every single day and studied from it during my lunch hour, after work, things like that. And in March of 2008, I passed this exam, and then I just let the site sit there. It had been up for a year. It had done its job for me, I passed the exam, I got promoted in my position, and things were going great.

Well, mid-year, I learned that I was going to get laid off, which at the time was . . . I mean that was probably the lowest point of my life at that moment. But that's when I sort of looked for other opportunities, and when I discovered this whole online business, internet marketing thing, and I had learned that if you have a website and you're providing value and you can get traffic to it, you can potentially turn that into a business. And so I had this website for this LEED exam, and the first thing I did was put an analytical tool on the site to see, you know, just to get ready for any sort of traffic that was coming to the site, or see if there was any at all. And what actually happened was that next day when that data populated, I saw that thousands of people around the world, thirty plus different countries, were already visiting my site to help them pass this exam. And when I looked deeper into the analytics, I saw that not only thousands of people were coming to my site, but people were posting links to my site on forums, on blogs. People were talking about me. They were sharing about . . . sharing the site as a resource to help their own colleagues. So by giving away all this information for free, I had built a massive audience. I had gained a ton of traffic because all this information was freely accessible.

So again, why do I give it away? Well, one reason is because I know that I can reach more people that way. I can affect more lives. And the more lives that you can affect, the more reward will come your way. Again, you have to give people an opportunity to do that, but I'll get to that in just a second. But again, giving it away for free, I was able to reach more people to then share the site or use my information to help them pass the exam. Which is great.

Well, in late 2008, I published a study guide to help people pass this exam. It was a really, actually very, very tough challenge for me to get over the fact that, “Well why would people want to buy stuff from me if I was already giving everything away for free on the site?” It was a huge challenge for me. But I found out, after making about eight thousand dollars that first month in October of 2008, that people will pay for convenience. People didn't want to sit on the website and flip page to page, and it wasn't always linear. People would much rather pay a convenience fee to buy this ebook. That's why people pay for courses and things like that. Because it's all that information in one place that they can get. It's convenient. Even though, when you really think about it, anything that we want to learn or anything that we want to do . . . I mean we could, if we wanted to, find all that information for free, online, on YouTube or just Google searches. You could. But to have it there in one place, convenient, you go there and you learn it, and you do whatever it is you need to do to make it happen, people will pay for that. So that was a big lesson for me is people will pay for convenience.

So think about what you can do in your business to make things more convenient. Even though you might be sharing the same information or selling the same information that you have on your website, people will pay for it because it's convenient. Darren Rowse from ProBlogger.net, he wrote a thirty-one day blog series called “Thirty-One Days to Build a Better Blog.” It was completely free. He had built that by blogging for thirty-one days. Every day for thirty-one days he would post a different exercise. And what did he do? He compiled all of those blog posts into a book that eventually sold. And he did really well. I don't know the exact numbers, but I know he sold that book because I was an affiliate for that book. And I had affiliate sales for it. So I know it did really well. So even though people could get that information for free on the site, it was much easier and more convenient for people to get it from his book. Something that he sold on the front-end of his site, right there, easy to consume. One PDF file, or perhaps even . . . I think it was even a physical book too, which is cool. So you can try different mediums of giving that information away.

So that's the first part of this whole “give it away for free” thing. The second part, and the coolest part about this and why I do it this way now, is that first month when I had made about eight thousand dollars, 30 to 35 percent of those sales came from people who had already passed the exam. They didn't even need the ebook. Well, why did they buy it? Well, I got dozens of e-mails that month saying just like this. It said, “Pat, I don't need this ebook, but I bought it from you because you had already helped me pass the exam, and I felt like I needed to pay you back in return for what you've done for me.” You see, when you help people, they will want to pay you back. It's just The Law of Reciprocity. Right? I remember going to Starbucks one time . . . I do this every once in awhile. I go to Starbucks, and I'll say to the person behind me, you know, “Can I just buy your coffee?” And I just do that randomly just to see what people's reactions are, and this makes me feel good. And this one time this guy was like, “Oh my gosh, like, this is the nicest thing that anyone has ever done for me today. I mean I just needed this, cause I was having a bad day. What can I do for you? Is it . . . can I do anything for you? Just tell me, anything, I will do it for you.” Like, this guy was like really trying to find a way to pay me back for just this really quick, kind gesture that I did, which was to buy his coffee for him at Starbucks.

You see, people . . . I mean, think about it. If people . . . if somebody gave you something, you would want to give somebody something back in return. It's not always something monetary. It could be anything. So online, a lot of times when you give something away for free, when you provide all this value, again, which also helps you get seen by more people and build authority, people are going to want to pay you back, and it's not always monetary. Sometimes it's . . . they share you or your resource. Or they have advice for you, or they have something else that they could offer you. You know, pro bono, for example. But a lot of times it is monetary. Not just by purchasing your products, which, if you have products, people will go out of their way to buy them if you've helped them in some way. But sometimes it's . . . like for me through affiliate commissions. So I've actually gotten emails from people saying, “Pat, I'm interested in buying this product, I don't . . . do you have an affiliate link for this? I want to make sure you get paid for it.” Like how, how crazy is that? How awesome is that?

And if you can provide value and really help people and change people's lives, which you can do more if you give a lot of stuff away for free, you know, good things are going to happen. And you know another reason why I give it all away for free is because, especially in the space that I'm in, in internet marketing and online business, like you said Jerry, people are charging for this information. So one thing I like to do, and everybody should do, is just see what everyone else in your niche is doing, and do the complete opposite. That's why I don't sell on my email list. That's why I am transparent and share my income reports. That's why I give it all away and tell people when I have an affiliate link, because people will go out of the way to go through those, and that's how I've been able to make a decent, wonderful living over the past few years. And it's just . . . it feels good. Right? I can sleep at night knowing that I'm providing value and also getting paid for it. I mean it's the best business model, ever. And with the tools that are available to us today, we are more able to more than every in history be able to help people.

Again, your earnings are a byproduct of how well you serve your audience. So understand who your audience is, what their needs are, what their pains are, what their issues are, and provide them a solution. And do it for free. And if you do that and also give people an opportunity to pay you back through, maybe, more convenient products, or a course, or perhaps just one-on-one coaching, people will take you up on it.

So Jerry, I hope that answers your question. I hope that sheds a little bit of light on why I do what I do and how it works. And you know, I really recommend . . . because there's a lot of interesting psychology that goes along with using free as well, if you check out that presentation as AskPat.com/poweroffree, you'll hear me go through a lot of those case studies and psychological things that are happening. And also a lot of real life examples of people giving it all away for free who are making a lot more money in return, in all different niches, including the pizza niche, which probably sparked your curiosity there. But you can just check it out: AskPat.com/poweroffree.

Jerry, thank you so much for your question today. An AskPat t-shirt will be sent your way very soon. And if you, the listener, have a question that you'd like answered here on AskPat, potentially featured on the show, you can go to AskPat.com. Thank you again so much for listening in. You know a lot of you have said you've made AskPat a part of your day, and that just makes me so happy. So I'll always keep providing this information to you for free.

So as always, I want to end with a quote here. A quote from Anne Frank. She says, “No one has ever become poor by giving.”

Thanks again for listening. I'll see you in the next episode.