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When & Why to Pay for Free Information

It’s okay to pay for stuff that you could have gotten for free. Sometimes forking over your hard-earned cash is actually the optimal choice! It can save you time and frustration. The people who pay for freely available goods are people who understand the power of cost-benefit analysis. These people are business thinkers who take opportunity costs seriously. They always leverage comparative advantage.

Basically, the reason to pay for free information is the same reason why you might buy a sandwich from the deli instead of making your own. Buying the prepackaged version is easier, more convenient, and often more fun. If you’re low on time but have plenty of money — or at least enough money for the purchase you’re considering — then buying a ready-to-eat sandwich (or an instructional ebook, or a software service, etc) actually makes more sense than spending ten minutes slicing the cheese yourself.

Besides, someone who specializes in making pastrami sandwiches (or researching productivity techniques, or building time-tracking software) is likely better at it than you are. Paying them will not only save you time, it will also get you a better result than trying to roll your own solution.

Here are three things that I personally purchased in the past couple of months that I could have gotten for free:

  • $39.95 for an https certificate and installation thereof from A Small Orange. I could have spent a few hours figuring out Let’s Encrypt instead.
  • $79.98 for tax services from H&R Block. Is it possible to file your taxes without using software like this? Totally. Is it frustrating? Yes, to the extent that I would cry.
  • Any and all nonfiction books. The information that I want is out there on the internet, but it would take a lot of time and energy to assemble it into a coherent, readable format. Instead of skimming all of Brian Krebs’ articles about spam, I simply bought his book.

Amy Hoy addressed this phenomenon in a 2013 blog post:

Quote from Amy Hoy’s Unicorn Free.
Quote from Amy Hoy’s Unicorn Free.

When it comes to services in the professional sphere (as well some consumer goods), people will pay for three advantages:

  • more free time / less wasted time
  • more intellectual resources / less frustration
  • more money / fewer costs

The through-line here is efficiency. People will buy what you’re selling if you can help them get the same inputs to generate better or increased outputs. If you execute well enough, they’ll love you for taking their money!

So, in closing, why pay for free information? Because your time and energy are valuable. You deserve high-quality results.

The How & Why of Premium Pricing: Anxiety Included for No Extra Charge!

Update: I decided to cut the scope of the workbook and hence cut the price as well, but the reasoning remains the same.

“There’s one easy way to find out what customers think about prices. By selling them things.” — Tom Whitwell

I’m reaching the stage where I ask people to hand over their money. Frankly, it’s terrifying. What if I fail at the very thing I’m trying to teach? A big part of me wants to pretend that I’m sure the launch will be a slam dunk, that I’m abso-freaking-lutely confident 💪🏀👍 But a bigger part of me wants to be honest about my thought process and my anxieties.

Javon McCrea dunking. Photo by Chad Cooper.
Javon McCrea dunking. Photo by Chad Cooper.

Value > Dollars

When it officially launches, Product Communication Basics will cost $34.99. That’s definitely more expensive than the average ebook. Heck, Amazon wants to cap prices at $9.99! And yet I think $34.99 is justified; PCB is more of a guided do-it-yourself consulting session than it is a standard book. Like I wrote on the landing page:

“Consider this: if you hired an excellent copywriter, you’d end up paying them $50 per hour at the very least, and you’d spend most of that time just trying to communicate your vision. How much is your time worth?”

I chose this framing for a very specific reason. Price is 100% a function of perceived value. The time, effort, and cost of materials are close to irrelevant — it’s all about what the product will do for the customer. Bootstrapping guru Amy Hoy quips, “Don’t get snared into a price conversation. Turn it into a value investigation, instead.”

If people anchor on how much hiring a consultant costs — if they perceive the value of Product Communication Basics in those terms — hopefully they won’t worry about paying $20 more than usual for an ebook. My guess is that the kind of person I want to sell to will understand my point and find it compelling. Hoy has also written that people who pay money for things “value their time more than their money.” Why? Because they understand comparative advantage and opportunity cost.

If you’re a high-impact professional, especially an entrepreneur, then spending your time compiling a bunch of information into a useful format is not worth it, and your end result won’t be on par with what domain experts can offer. Any hours you might spend researching are hours that you could have spent improving your own product, which has an order of magnitude greater effect in terms of 1) saving your future time and 2) multiplying your future funds.

Patrick McKenzie, a former bootstrapper who is now CEO of Starfighter, similarly exhorts people building products to value their time highly:

“Instead of [trying to do more with the limited time you have], build time assets: things which will save you time in the future. Code that actually does something useful is a very simple time asset for programmers to understand: you write it once today, then you can execute it tomorrow and every other day, saving you the effort of doing manually whatever it was the code does. Code is far from the only time asset, though: systems and processes for doing your work more efficiently, marketing which scales disproportionate to your time, documentation which answers customers’ questions before they ask you, all of these things are assets.” (Emphasis in original.)

An effective product pitch is a great example of a marketing asset that scales — once you’ve found the essence of your value proposition, you can and should use it again and again on your website, in emails, in advertising, etc. Do the labor once and reap the rewards continually.

Looking Forward

I think I’ve made a solid argument that my potential customers will save money if they buy from me, because otherwise they’d have to pay a copywriter much more or waste their own time figuring out an approach. I’ve also made the argument that my customers will earn more money in the first place.

But… I’m still nervous. What if the people in search of marketing resources don’t agree with my reasoning? What if no one orders the book? Realistically, in that case I’ll lower the price and try again. I’m a big believer in ~markets~ and I’ll listen to the signals as they come.

Another point from Amy Hoy: “You’re afraid of asking for money, so you think the thing to do is to ask for only a little. It feels safer.” Welp, she’s right. In the grand scheme of things, $34.99 is not a huge amount of money. You can drop that much on brunch or jeans from Target. And yet I’m still scared that it will seem like a ludicrous ask.

What are you waiting for? Assuage my fears and go buy Product Communication Basics!

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