Thursday, November 22, 2012

How Giving Things Away For FREE Can Make You MONEY

It might seem counter-productive to give things away for free if you are looking to make any kind of money--but business can be a lot like a game of chess, you have to look a few moves ahead. As writers, our skills and productivity vary greatly, but for the sake of this scenario let us assume that a person has the GREATEST possible CONTENT imaginable. That would be wonderful, right? Yes...but how do people get ahold of it? We have to remember that so often writing is an art form that isn't judged until after the reader possesses it. So the question becomes how do you get the reader to possess it?

Sure one can advertise it both through free and paid methods (although most authors starting out want to avoid paying a lot of money for advertising, especially since most don't have a good deal of cash to burn.) If you have been reading this blog up until now you probably already see the value of putting up blog posts, content on a website, audio files on places like podcast alley or itunes, or videos up on YouTube as a way to draw people in by giving them some content for free. There is nothing like giving a little bit of free content to getting people enticed enough to want to see more of what you have. However, sometimes going one step further can be a great benefit.

Companies often run contests or giveaway sweepstakes to acquire new customers. Authors in the 21st century using tools like social networking, YouTube and other popular websites have had similar success with this type of strategy. This goes beyond posting free poems or short stories or essays because the idea of these giveaways is to give away a product for free that the winners otherwise would have had to PAY for. Something like a book, a CD, or other such media that would normally cost a few dollars or more.


Take Betty as an example, a fiction writer I have seen who promotes her work predominantly by herself through the use of her website. She writes romance stories which obviously have a big appeal. She is a short story writer for the most part who puts new stories on her website/blog every week and two or three times a year comes out with a new short story collection containing some of the stories that the readers have seen as well as some material exclusive to the books. The catch is that many of the characters that the audience has become familiar with through the free media are featured in these books and so a good number of her readers buy the books either in print form or digital form to read more about the characters they love.

Every time Betty is about to come out with a new book she takes the opportunity to advertise a giveaway of a few signed print copies that she mails to the winners. She posts the news of the giveaway on her blog, to her email list and in social networking groups, on Goodreads and other places with traffic including YouTube. The prospective entries give their email in exchange for a shot at the prize. At the end of the contest she does a random drawing using a free online randomizer and picks the winners. An email is sent to everyone who entered whether they won or lost listing the winners and thanking them for entering.

There are two major benefits to this email she sends out after the contest,

One: people who lost are given a link to where they can buy the book if they are interested. Two: She gives the entrants a chance to join her regular email list. Most of them want to.

A typical contest of this type yields Betty 100-200 new emails for her list each time she does it. It generates hype for her new book by making it seem desirable, it grows her list and it gets other people talking about it. Sure she takes a small bite of a few dollars for each book she is giving away--but the back end of these types of free giveaways yields gains of several times the loss on a bad day. For the 5 copies she normally gives away she generates an additional 40-50 sales she wouldn't have gotten before. Now you might wonder if an additional 40 or 50 sales is worth the effort of the giveaway (which isn't really that much effort at all) but look at the long term math.

Say Betty comes out with 3 books a year--she does a giveaway each time and generates roughly 150 new emails and 40 new sales each giveaway. In a year that is 450 new emails and 120 sales. However, lets say that of those 120, half of them really like what they bought and want to stay on as customers. If you figure 20 of the new customers from the first giveaway buy the next two books that year and 20 of the 40 new sales from the second give away buy the third book that's another 60 sales on top of the 120. So 180 new sales generated in just the first year. This isn't including the 450 new email sign-ups that she can advertise her new books to. If only 1 in 4 or so wants to buy any of her books, that would still be another 113 people on top of the 180. That's 293 new sales generated this year by the giveaways--just three of them. Sound worth it yet?

If not, remember that this is all just in the FIRST YEAR. Those customers that got hooked will keep coming back, year after year after year to get her new material. And this is just from ONE PROMOTIONAL EFFORT. This could be why Betty has been in business since 2007 and sold somewhere in the neighborhood of 19,000 copies of her romance fiction series last I heard, possibly more. (This is her full time living now, and she just started the website in her free time while in college.)

When properly positioned, a few dollars loss for giveaway copies is like an investment--it yields much better results later on. In addition, it has another wonderful side-effect.

Betty gives personalized notes to all the winners and when the winners receive her books, they feel a personal connection to this author. It makes them far more likely to keep checking back with her and take interest in her past books and any books she has coming out in the future.

Giveaways; they cost you once, but can benefit you for a lifetime.

2 comments:

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  2. I agree with giving away free stuff can benefit you in the long run. The impact it creates is significant.

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