In the past decade, “free” has emerged as the Goliath-slaying scourge of industry. As Chris Anderson wrote about in his book Free: The Future of a Radical Price – and as David Bryce, Jeffrey Dyer and Nile Hatch support in a 2011 Harvard Business Review article – it’s almost impossible to keep up when your competitors unleash “free” into the marketplace. (Think about what Napster did to the music industry.) Often, you need to reinvent your business model completely or die.
But people are still willing to pay for some things – a fact that was highlighted for me on a recent trip to Rome. We were standing in line at the Colosseum, that famous landmark of gladiatorial carnage. We stood forever in a poorly marked line, they didn’t take credit cards, the customer experience seemed utterly disorganized, and we ultimately had to pay a hefty entrance fee. But, as evinced by the hordes of tourists, there was no question that we would go – we had to, as part of the essential Roman experience.
On one hand, it seems illogical: why is it necessary to walk around a ruined amphitheater when there are photos and videos online, not to mention middle school textbooks (didn’t everyone do a unit on the Romans?) and two hours of Russell Crowe cinematic smackdown? You could get the gist just fine without visiting. But, ironically, the ubiquity of information makes it even more desirable to access the real thing – the place that gave birth to the multimedia empire.
Chris Anderson – a different one – knows this firsthand. This Chris Anderson, not the author of Free, runs the exclusive TED conference (Technology, Entertainment, Design), which began in 1984 as an invite-only hobnob session for thought leaders. It was great for those folks, who eagerly networked with one another, but lacked the cachet it has today because the rest of the world hadn’t heard of it. But, in line with the principles espoused by his name doppelganger, Anderson (who took over the conference in 2002) OK’d releasing videos of the talks for free in 2006. Today, 1400 talks have garnered hundreds of millions of online views, and the conference is the hottest ticket in town, selling out a year in advance despite its multi-thousand-dollar per head price tag. (It’s so exclusive you don’t “register”; you must “apply.”)
Similarly, you’d think that giving away the videos might decimate demand for the actual conference – why pay so much money, when you can wait a few months and see everything online? But the opposite has been true. TED has become a household name and status symbol. People want to be part of the action, and are willing to pay for the experience, just as they are to walk the grounds of the Colosseum.
The lesson for your business? Free can help you or hurt you, and you must have a strategy to manage it. Think hard about what you offer that’s unique. It could be a brush with history, as with the Colosseum, or face time with celebrities and thought leaders at a place like TED (or at the elegant private gatherings sponsored by many top-tier companies for their best clients). The common strand is personal experience – which competes with free by being priceless. The goal is to ensure everything your business does is set up to promote and leverage the enduring asset you possess.
What are your strategies for leveraging “free”? And how do you best stoke demand for your product or service?
This post originally appeared on the Forbes website on February 22, 2013.
Dorie Clark is CEO of Clark Strategic Communications and the author of Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press, 2013). She is a strategy consultant who has worked with clients including Google, Yale University, and the Ford Foundation. Listen to her podcasts or follow her on Twitter.