Re: Grateful Dead Marketing

[dcr@xxxxxxxxxxxx (Dan C. Rinnert)]

M. Simon,msimon@tefbbs.com writes:
>I think the only way FORTH will succeed is to give it all away.
>
>We need more free stuff. 

Based on my own experiences, I'm not so sure.  I run a local community
network in Greater Cincinnati.  We offer free eMail, free participation in
discussion forums, file downloads, etc.  No registration or setup fees. 
Free, free, free.

Result?

Local people still flock to AOL to pay them $21.95 per month to do basically
the same stuff.

I think there's a problem with the perceived value.  That is, if you charge
for something, people have a tendency to think that it must be worth it. 
And, if you give away something for free, it must be worthless.

On another list I'm on, several months ago a person mentioned that his
company lost an account, because his price was *TOO LOW*.  The lost client
told them that if they were offering such a low price, they must not be
putting as much effort into it as the company they went with who had a bid
almost twice as high.

Look at how many people will purchase a namebrand product at a premium price
because they think it must be worth more than a generic product at a lower
price.  Sometimes it is, sometimes it isn't; but people will have a tendency
to think that the more expensive product is "better".

It's true that Linux has done well with the free model, but not as well as
commercial operating systems.  How many more Linux users do you think there
would be today if, five years ago, there was a "Microsoft Linux" or "IBM
Linux"?  I would think that more people would have purchased the M$ Linux
system than would have downloaded the free Linux systems.

I think the best route would be to offer it at a fair and competitive price,
rather than for free.  A fair price gets questions like, "Do you take
American Express?" while FREE gets questions like, "What's the catch?"

Dan
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