On Being Paid to Try Out Products

Deb Owen asked the following question on my last post:

What’s your take on Seth Godin’s position that ”˜free’ will eventually morph into providers paying people to take something to try?

I decided to answer the question here rather than in the comments because I wanted to point out the post she’s referencing and give the context for the discussion. In the conclusion to Too Much Free, Seth says

As the market for free gets more crowded, we’ll see more and more people promoting their free products, stuff that people used to have pay for. A complete shift from ”˜you will pay’ to ‘it is free’ to  ”˜I will pay for ads to alert you it’s free’ to ultimately, ‘I will pay you to try it’.

My first take on it is that we’re already partway there, since providers pay sneezers to try stuff, betting that those sneezers will get others to try it. The online survey industry that’s running rampant is also paying people to try something, but they’re doing so because they’re taking that information to figure out how to sell their products more effectively to people they haven’t paid to try them. I guess the next extension is that providers would pay us to try a teaser or freemium version of their product, betting that it’s so good that we’ll buy the full version of the product.

Of course, when compared to how much money businesses are throwing away already on advertising that’s just not working, it may be more effective to pay potential customers directly while offering the same product rather than sinking money into advertising. After all, if paying you $3 to try this product means that you’re 95% likely to buy another one of my products for $19.95, then that may be a better bet than spending thousands, a few pennies at a time, to get a .1% conversion rate. It’s a numbers game at that point, but I think the idea deserves some exploration.

What’s interesting about this that we’ll be reverting back to 20th Century “free” as opposed to 21st Century “free,” since there will be much higher financial costs to acquire customers like it was when our economy was more heavily based on material products. There’s at least one positive upshot of this: as soon as it costs marketers a lot to do their thing, they’ll be more likely to a) not yell at us all the time, since yelling will cost them resources in addition to whatever they’d normally pay on marketing and promotion and b) work to ensure that they have remarkable products that deliver because, otherwise, they’re paying doubly for wasted time and resources. Business that continue to over-market and under-deliver won’t make it very long, and the ones left will be delivering superior products that deliver.

If you had to pay someone to try your product, what would you do differently?

(Thanks, Deb!)

Comments

  1. says

    Thanks Charlie.

    Where I see it going is – marketers paying people – not to get them to try the product out. But marketers paying money to involve folks further.

    Example: Zappos. They famously give a choice to all their employees when their training session is over: if you quit now – you get $2,000.

    Thats a very tempting offer: earning $2,000 without doing any work – just for quitting. But employees who don’t take up the offer become more loyal to Zappos. Its like a greed barrier they cross.

    I think what Zappos does with employees – a few marketers may end up doing too. Pay their clients to leave them. Because it makes the clients who don’t leave even more loyal.

    Ankesh Kotharis last blog post..4 Stages of Marriage (Or 4 Stages of Job Life Cycle)

  2. says

    I like where you’re going with this Charlie.

    To your final point, I agree that the over-promise/under-deliver companies will begin fading away. Not only as a function of the changing landscape in marketing, but thanks to the economy as well. People (and companies) being tighter with their money means they expect more for what they spend. I’m seeing evidence of this now as companies who have lived on the ‘under-deliver’ model for years now don’t know how to readjust. They don’t understand why it’s not working anymore. (These are often the same companies that thought building relationships and utilizing social media was an idiotic concept a few years ago. They just aren’t able to see the way things are moving for some reason.)

    I also like Ankesh’s point about Zappos and creating loyalty by passing a greed barrier. That’s an interesting concept when applied to clients. I’m going to have to give that one some thought. ;-)

    Thanks guys!
    All the best!
    deb

  3. says

    As the cost to acquire a customer goes up, and we get smarter about keeping customers (so customer lifetime value also goes up) it could absolutely make sense to pay people to try stuff.

    Whether it would work psychologically is another question, though. It’s kind of like paying someone to date you. :) I can see a prospect wondering “how good could it be if they’ll *pay* me to try it.”

    I think some of the telecom companies have paid prospects to switch. (Followed up, of course, with the same crappy service that virtually all telecoms have, thus throwing the money away.)

    Sonia Simones last blog post..What I Love About My Job

  4. says

    As the marketplace for all kinds of products keeps getting more and more crowded, companies have to figure out some way of standing out. More and more companies are starting to jump on the incentivized consumerism bandwagon, and some have figured out that it’s just better to straight up pay their customers to use the product. All things being equal people have this tendency to take the money. I’m involved in an program that does exactly that, so I’m trying to stay on top of the trend.

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