While the concept of FREE is not taboo, is the word, especially as it relates to promoting on twitter and other marketing collateral?

My company is approximately 1-2 weeks away from launching a major upgrade to our site. The new upgrade contains many valuable features for entrepreneurs and small businesses, however the new features just happen to be FREE.

As we strategize our marketing efforts, we are truly torn with how to promote that these features are offered at no cost, without devaluing their worth.

1) Is it better to keep the word free out of the headlines of our promotional materials and marketing efforts...perhaps making it more prominent in the body of the copy.

2) Should we proudly promote that these new features are free, especially as they have been created for an audience that is often cash strapped?

3) Does the word Free immediately make you wonder "what's the catch?"

4) Do you have any creative ideas for promoting a FREE service while maintaining the value of the offering?

The book Predictably Irrational has a great section that highlights just how powerful the word "free" can be.

Example 1: Amazon.com decided to introduce free shipping in all locations except France, where the shipping would cost about $0.20 per order. You might think 20 cents shouldn't make a difference, but it did. Sales shot up in all locations except France. Amazon later introduced free shipping there as well and sales rose just as they had in other places.

Example 2: Dan Ariely, the author of Predictably Irrational, conducted an experiment where his researchers first sold people a choice of 2 chocolates: one known to be of excellent quality (I think a Lindt chocolate) and a Hershey's Kiss (worth considerably less). When the prices were set at $0.15 and $0.01 respectively, the majority of people chose the more expensive chocolate, realizing that they were saving about the $0.55. Yet when the experiment was repeated with the price being dropped by 1 penny (now $0.14 and free respectively) the majority of people opted for the free Hershey's Kiss.

The bottom line: free is a very powerful proposition. However, there are some important thoughts around giving your core service away for free as opposed to something else associated with your service. You can note that Amazon didn't give books away for free - they gave away shipping.

I think some of the best examples of how "free" can be used effectively are infomercial that get people excited about (silly) products they probably don’t need. In these examples the seller establishes a high value - say $199 and then they start throwing "free" things on top of that … next they start discounting … until at the end of the show you can buy a product you don’t need for "3 easy payments of $19.99".

Some of the tricks being used in this scenario are:

• unnaturally happy people promoting the product
• a very supportive audience
• setting (imprinting) a high price marker in viewers' minds (e.g. "valued at $199")
• adding (apparently) huge value-added incentives "for free"; and
• discounting the initial imprinted price (so that the final purchase seems so obvious viewers feel like they will loose out if they don't act immediately.)

What can we all learn from this? I think the most important thing is that rather than starting with free, establish a value for the product and then offer incentives to reduce it's price, even if you will eventually offer it for free in either the short (3 month trial) or long term.

Lots of good comments, will just add two things:

• Be careful in emailing. "Free" gets flagged in emails, especially when all in caps and with exclamation marks, and can get your messages headed to the junk folder.
• Points above about explaining what the catch is, or isn't are really good. We offer a free trial and say "no credit card required, no obligation" just to make sure nobody thinks there's a hidden catch.

Best of luck!

Love this discussion! We're dealing with the same challenge having created a free bookkeeping application. Users question "the catch"

I wouldn't keep it out of headlines and I don't think there is a downside therein; the media validates the context and communicates it moreso as news than a promotion

Yes, I'd proudly promote being free BUT don't make it promotional. It's a feature of the business, not the sales pitch. Outright.com automates bookkeeping; the free web service imports income and expenses and prepares you for taxes. VS Outright.com is free bookkeeping....

What are you concerned about with your fourth consideration?

You've certainly heard that sex sells, but you know what sells even better? FREE! That little, four-letter word is a huge draw for everyone. It doesn't matter if "buy one get one" appears before it or "after rebate" is right after it. Our minds our wired to FREE. When we see that word, we want it... and, depending on how big the catch is, we rationalize the hell out of it in order to get it.

But keep in mind... this whole process takes fractions of a second, so if you want people to sign up for the free accounts (with the hope of upselling them later), make sure it's clear somewhere what the catch is. Whether it's only a free trial or if you are going to try to upsell them on services.

The short answer: I think, you care too much about the wrong question.

Now, the long answer: Promoting something as "free" certainly is a powerful tool. This is because any of the two reasons apply:

• The offer removes monetary costs (ie. what people think it costs).
• The offer removes cognitive costs (ie. the problem to make a decision).

But many people have certain rules of thumb for decision making which run counter to a free offer. Examples are: "You get what you pay for! ", "If it sounds too good to be true, it usually is! ", etc. A free offer contradicts these rules of thumb, thus it will create cognitive dissonance.

To prevent cognitive dissonance, people change the one piece in the equation that is most easy to change: the evaluation of your product. They either devalue your product because it's free. Or they revalue your product because it costs more than "usual".

Just recently, some statistics about iPhone app market showed these two effects rather clearly: Higher Price, Better Ratings. Don’t Discount Your App At Launch. However, this does not necessarily apply!

For people also use context information when making judgements. Think promotional give-aways in super markets: Most people accept these free offers without devaluating the products. Everybody knows there's a reason for these free offers. Nobody's asks "Where's the catch?"

So, what are relevant context informations? Some examples:

• The supplier has an incentive to make a free offer.
• The offer is restricted (either in time or space or to a certain group of people).
• It's a web site.

The last one currently applies to you. Let's face it: People are used to use web sites for free. It's not a big deal. They are also used to get SaaS updates for free. It's not a big deal, either.

So, the chances that your product is devaluated is rather low. At the same time, the chances that the promotion will create a sort of Slashdot effect, is low, too. Of course, it's also a matter of presentation: If your copy screams "FREE! FREE! FREE!", people may still get suspicious.

So, I'd say, promote these new features as best as you can. Mention 'free' if you'd like to but I wouldn't if I were you.

For if we're talking about the office thingy you linked in your profile, you have other problems. You need to solve the chick-egg problem, because that's probably the more important objection of your target audience: Is there sufficient demand/supply or will I just waste my time?

Your page may be one of the thousand fun pages created by bored web designers. That would waste my time. But nothing indicates, you're not! The little dog image is easy to overlook during a quick scan, for it looks like a company logo. There's no pricing page, so you don't seem to be interested in making money. Thus, you're also unlikely to promote the page appropriately.

If you'd promote your new features as free, you may sound desperate. I would want to prevent such impression at all costs if I were you.

Additionally, your FAQ says there's no fee for posting a space, but it says nothing about fees for searching or finding a space. That's highly suspicious! Taken all together people may really wonder, where's the catch? But not because of your new feature roll-out.

Hope this helps.

I'm not going to add extra theory on why free works, everything written here is good. Just don't blast it everywhere in capitals or you will look cheap! The most important thing when doing free is to figure out how you will still turn a profit! I've seen all too many people give out free stuff saying they will figure out the profit later or just put ads everywhere. Neither of these strategies really work anymore. If you are going to upsell, what will you upsell? Why? When? Is it ready? For how much? What % of users will realistically convert? Is that practical for you?

If you cannot answer that do not do free!