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A Better Deal than Free

It’s often said that you cannot compete on price with something that’s free – provided by the government, subsidized, done by free volunteers, a donation-backed NGO, or a collective, open-source solution. As it often goes with things that are often said, it’s not entirely true.

It’s like saying that a human can’t win in a footrace against an antelope. It’s true in a very narrow sense – in a 100-meter dash, no human can do it. But that doesn’t mean the same is true for a 10 km race, or that a human can never be faster than an antelope – we can use machinery, weapons, traps, cooperation, or simply set the race on ice.

Mathematically, we cannot go cheaper than free, but that counts for little as even when clients want to compare us on price only, what they mean by “price” is better described as a “package deal” of four kinds of prices:

  • monetary price
  • risk price
  • convenience price
  • ego price

If their (monetary) price is zero, but their solution looks like it hasn’t been thought through, thoroughly tested, or using it would imply that the client doesn’t have the money for “the real thing”, there is a good chance many will like your solution more, even if your monetary price is not zero.

All things being equal, free wins. So why would you paint your service as “equal” to the zero-cost one? Highlighted differences aimed at risk, convenience, or ego costs can work wonders.

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