What you need to know about price psychology to stop giving your content away for free

Learn the most common mistakes people make when pricing their products online. Your audience will appreciate that you took the time to understand how they think and what they want from you.
Written by
Emily Khasidy
September 19, 2022
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We don’t believe in "Give your best content away for free" 

We don't think so, and here's why you shouldn't either

The internet has been changing places over the past few years. As a result, more and more people are seeking strategies to monetize their material online, however, it might be difficult. Monetize your message is a comprehensive system that helps you create a platform from which you can create, market, and sell online courses and information products on the internet.

Free content is an effective marketing tactic to get attention. However, this short-term strategy could hinder your long-term goals if not executed properly. To succeed in today's market, you must approach your content and value distribution with intention and careful planning. To do this, you must understand consumer psychology and the functionality behind the platforms on which you are sharing or promoting your content. 

Haphazardly giving away valuable content without considering how the evolution of that content will convert to business resources (income) instead of business deficits (time/service demand) could end up costing your business instead of building it. 

Who Started the Lie that we should give away content for free

Over 6 billion pieces of information pop up when you type "give my content away for free into google." Someone started saying that you can easily attract more audience, more clicks, and more conversions by giving away your free content. It has spiraled into an echo chamber of disastrous advice. The problem is that many people still give their content away for free because they don't know any better. The echo chamber has convinced them that this is what they should do, so they do it.

It's a fundamental economic principle that prices fall when supply exceeds demand for a good or service. When demand exceeds supply, prices rise. It's the law of supply and demand. When more FREE content is available than people want to consume, the possible price you could charge for that content falls. We've seen this happen with books and music, and now we're seeing it happen with digital content.

Somewhere along the line, the competitive landscape became crowded during the emergence of social media and the proliferation of using social media to echo your knowledge or service offering. As a result, justifying your product or service pricing becomes more challenging when your competitors offer an endless supply of similar content at lower prices.

The problem is that the race to the bottom on price often results in a loss of quality. When everyone is trying to offer the same thing for less and less, eventually, there is no one left who can offer a quality product or service at a fair price. Not to mention the labor-intensive process of producing more and more content and formatting it for each platform.

The Risk of Content Freeloaders in Same Price Cognition

If you give away your best content for free, your audience will get used to getting it for free. It's a simple concept: if they can get all of your valuable information without paying anything, they will be less likely to pay for additional (and often more expensive) content that's only available behind a monetary transaction. As you gain organic growth from an audience of information freeloaders in your own business, they will require increased time, energy, and costs to keep a non-profitable audience engaged. 

Furthermore, if you are gathering this audience on platforms such as Instagram, Tiktok, or YouTube - the robust behavioral and demographic data they provide you on your audience can be misleading. Avoid making critical business decisions based on the demographic information of an audience that may never convert for you. Focus instead of crafting your product and service offering that caters to your converting clients and customers. Ultimately if you are a business and service provider utilizing social media platforms to grow your business, you want to be cautious not to overestimate the value that a large audience or following could provide. 

In short - an audience of freebie-seekers can stunt the growth of your business, and you're much better off focusing your time and resources on building an engaged group of people who are interested in what you offer.

But how do you price your product and have confidence that it will sell, given many of your competitors will continue to offer their content and knowledge for free? Discounts make sale prices look different from original prices, so add visual distinctions to sales prices. Again, understanding the psychology behind your audience, customer, and consumer will help you lead the way.

The Psychology Behind Price and Consumption

When making instrumental decisions for your product or service offering and your business, relying entirely on your intuition or instinct is not necessary. Human psychology is a highly complex and sometimes illogical science. Still, if business owners can take the time to understand some of the basic concepts at play, they can use this to their advantage when making strategic decisions.

Cost can effectively drive the consumption of a product. The sunk-cost effect is the psychological principle that people are more likely to consume a product if they know its cost. In other words, consumers feel compelled to use products they've paid for to avoid feeling like they wasted their money.

Increased consumption equals greater sales. We feel that gaining customers to consume items they've already bought is one of the first steps in forming long-term connections with them. Customers' usage of paid-for goods, for example, in a given year, has been shown to influence whether or not they will reorder the item the following year.

Loss aversion is real psychology that impacts your audience and customers. Loss aversion is the feeling humans experience when they lose something they own or may have access to. This phenomenon was first identified in the 1970s by Kahneman and Tversky, two cognitive psychologists. The idea is that losses and disadvantages have a more significant impact on decision-making than gains and advantages.

You may often see social media littered with buy now deadlines, short windows of time to register, or only time-related offerings. However, the notion of making something scarce, unavailable, or with a limited shelf life creates a sense of urgency that can get people to take action. Loss aversion theory has been used extensively in marketing, and it's not hard to see why. If you can create a situation where people feel like they may lose something, they are more likely to act.

Too many options can lead to decision paralysis!

The paradox of choice can cause consumer paralysis. The paradox of choice is that people often have a more challenging time making decisions when they have too many options. When you're considering what to buy and seeing 20 different brands of the same product, all vying for your attention, it can be tough to decide. They may end up feeling overwhelmed and either not make a decision.

Imagine this now, from your audience's perspective. As a follower, their feed is possibly full of content, products, and services similar to yours. So everyone is pushing out valuable content in hopes of being seen, noticed, and then chosen by a consumer.

Doing away with free content isn't feasible - but you can leverage the decoy effect to your benefit! The decoy effect is a cognitive bias that leads people to make irrational decisions based on introducing a comparable third option, the decoy.

For example, imagine you are a coach and your audience interested in being coached, considering your free content or private sessions. Your Instagram content is free, informative, and helpful. Your private sessions are uninterrupted and tailored to your specific needs and goals. Which do you think they will choose? Hard to say. Now, imagine you introduce a third option. A mid-priced, premium content membership. Now your audience can choose between free content, mid-price membership, and premium-priced private sessions. Depending on the individual's unique needs, it will be clear to them which of the three options provides the most value - and which is considered inferior. This is also sometimes referred to as the “asymmetric dominance effect.”

You can continue to post content alongside your competitors and fellow content creators - but that doesn't mean that the content needs to be fresh constantly. Instead, leverage exposure theory and unpredictable social media algorithms to your benefit to get maximum impact from the content you decide to give away for free. Exposure theory is a psychological principle that posits that the more we are exposed to something, the more likely we are to develop a preference for it.

Comparative pricing. Placing expensive next to standard comparative pricing may be tagged as the most effective psychological pricing strategy. Buy one, get one free. This is a pricing strategy in which customers pay the full price for one product or service to get another for free. The psychological strategy at work here is, simply, greed.

If you can get your content in front of people's faces enough times, they're more likely to develop a taste for it - and eventually, become paying customers. The key is not to bombard people with too much content at once, or you risk turning them off completely. Instead, release your content in small doses and make sure each piece is high-quality. Then, you can choose one powerful thought, notion, or action statement and recreate that content in many visual designs, styles, and mediums.

As consumers, we know exposure theory works. We see the same digital display ads for one brand or product follow us around the internet for weeks until we finally give in.

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Master the Art of Free Content Marketing

If you can master the art of free content marketing, you'll be well on your way to building a successful business. Pricing all of your content for free is a quick way to devalue your product and service offering. While being thoughtful and intentional about what range you offer for free, how often, and the composition of that content can help bolster the value of your paid offerings. Many businesses need to adopt different pricing strategies and have to offer twice as many people the online training and necessary knowledge to pick up the right price points in order to get the valuables of their own choice.

Subflow Makes it Easy to Monetize Your Content

Subflow makes it easy to monetize your content. We eliminate the time and effort required for creating, managing, and distributing content by providing an intuitive platform that allows you to communicate with new customers and push your content in one place.

By leveraging the direct and personalized nature of SMS, you are taking your conversation with your audience off a platform that is often noisy and difficult to stand out. In addition, by controlling the distribution of your content, both free and paid, you can create a more intimate experience for your audience and offer them value that they are willing to pay to receive.

In partnership with Stripe, Subflow automatically collects subscription payments and deposits them into your bank account, making the membership administrative process worry-free.

Subflow allows you to create an unlimited number of text membership products with a total number of subscribers. You can focus first on capturing your audience on a crowded platform, delivering them a sample of your potential value via a free SMS membership, and then converting them into a high-value paying SMS membership. Sign up today, and you can begin testing which Subflow SMS features would be best for managing your audience and delivering the most successful content-to-conversion SMS journey. 

Start by creating your SMS membership today!
Try Subflow out risk-free for 30 days. Build a membership your audience loves or your money back.