The big secret of undertaking a successful trial for a brand – CHARGE FOR IT!
At Tech2Brand my main aim is to help start-ups to get work with a brand – sounds simple, if only that was the case!
Getting in front of a Marketing Manager is one thing, but getting them to agree to work with you is another.
One key question that comes up before a final ‘yes’ is confirmed is ‘how much would it cost?’ With the future smell of success and a credible case study in mind, more and more start-ups still seem to be adopting the ‘free trial’ strategy. The rationale being that a free trial will get you a valuable ‘foot in the door’ and will hopefully (if the trial proves successful) lead to a longer term ‘paid’ arrangement in the future.
Does this rationale stack up? In theory YES, but unfortunately, in reality NO. In my previous life as a Brand Director, of all of the ‘start-ups’ (or agencies for that matter) that we worked with long term, none of these relationships actually started with a free trial. In fact, the ‘free trial’ cases never proceeded anywhere after the trial finished – scary, but true.
So why was this? Here are 6 reasons you should name a price and not go free:
- Firstly, you shouldn’t feel guilty about charging for your product from day 1, it shows confidence in yourself and your product – brands do respect this (honestly)
- Brands don’t expect a free trial. They expect a good price (like everyone does), but they aren’t looking for ‘freebies’. If you offer your services for free, they (brands) will gratefully accept and in turn, they will hide their surprise very well. However, it isn’t expected and therefore, it isn’t needed.
- A free trial can damage the perception of your product and yourself. A Marketing Manager may feel that as the tech is free, it isn’t that special (not really cutting edge) and therefore, it doesn’t feel like a serious investment for the future. Also, a free trial offer could be perceived as a ‘desperate’ move to get business (if the product was that good, I would expect to have to pay for it). These misperceptions will have a serious impact on your chances of working with a brand in the longer term.
- In a ‘free trial’ agreement, the brand has no ‘skin in the game’ . With no budget monies needing to be released, there is nothing for the Marketing Manager to be accountable for. Focus follows investment and a ‘free trial’ will be at the bottom of a Marketing Manager’s list of things that need to work. A ‘free trial’ project will be ‘out of sight’ and ‘out of mind’ from day one.
- Even if you do complete a successful free trial, you will still need to negotiate a ‘price’ for the next project and it is much harder to get to a good price with an initial ‘reference point’ of £0. For example: if you want to charge a brand £50k for the second project, it is a much bigger step to negotiate from £0 – £50k, than it would be to go from £10k to £50k. It is also easier for a Marketing Manager to internally justify a ‘larger’ longer term investment if a successful investment was made for the initial trial – it will be seen as a less risky opportunity.
- Finally, as a start-up you NEED the money – cashflow is the crucial ingredient to the survival of a business – promises and dreams of big deals in the future doesn’t pay the bills. In reality, if a brand wants your product that much (and sees a potential long term future with it), they will PAY, trust me.
There are many ‘schools of thought’ on this whole issue, but I would still propose that ‘start-ups’ should always charge something for a trial, even if it is a basic ‘set up’ fee. You need to ensure that the Marketing Manager has to release some budget money. This in itself will ensure that you appear on budget reports, it will ensure that you will be discussed and most importantly, it will ensure that you are on the radar. In today’s world of focusing on ROI, give the brand the ‘I” (Investment) at least? It really is the best place to start.
Be Bold, CHARGE for your product.