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How To Double Your Revenue By Giving Your Work Away For Free

Image via Flickr user FutUndBeidl

Image via Flickr user FutUndBeidl

This is a guest contribution from author Tom Morkes.

I know what you’re thinking: what’s the catch?

If you’re like me, you’ve read dozens (okay, thousands) of blog headlines that pique your interest, only to find out the headline comes with an asterisk:

Quandruple Your Opt-in Rate!*

*you just need to be featured on a massive blog, first.

Make 6 Figures in 6 Months*

*you just need 5 figures and a subscriber list of thousands to start.

I could go on, but you get the point.

So let me assuage your concerns: there’s no asterisk here.

No need to hustle affiliates, join an MLM, or pepper your site with Google Ads.

When I say you can double your blog revenue by not charging, I mean it.  I’ve done it.  And I’ve seen dozens of others do it too.

But before I get to the details, I want to tell you the story of a guy who stopped charging clients altogether (and his surprising results)…

The Generous Designer

Meet Adrian Hoppel.

Adrian is a Philidelphia-based web designer.  He’s been doing professional web design for years.  And while Adrian is incredibly talented and creates amazing websites, what’s truly remarkable about him has less to do with what he does rather than how he does it.

You see, Adrian doesn’t charge for his web design services.  He never has and he probably never will.

Instead, he offers everything as a gift to his clients.

If you want to work with Adrian and you both agree it’s a good fit, Adrian will design your website and give it to you.  No deposits.  No contracts.  No strings.

Just a simple gift – here you go.

Remarkable, no?

How Adrian Makes More Money Giving Away his Gifts than He Did by Charging a Fixed-Rate:

Okay, so you might be wondering: how in the world does that work?

How can he make a living if he just gives his work away for free?!

The answer is simple (although certainly not conventional):

While Adrian gives his work away freely as a gift, it doesn’t mean he works for free, nor does it mean his work is valueless.

Adrian built his business on a foundation of trust.  You trust him to build you a great website.  He trusts you that you will support his gifts and his giving.

In Adrian’s words:

“Working in the gift does not mean that I work for free, or that I give my work away without care. It means that people trust me to build them a website, and I trust them to support my work as they believe fair.”

A beautiful premise, but does it work?

Again, from Adrian himself:

“I ended up doing 22 websites in 2012, all by myself, all in the gift…every single client has supported me in whole.  

Every. Single. One.

Most clients gifted me with payment, and the payment is more than I ever received in the traditional model…” (source)

In other words, by removing a fixed-rate price from the equation, and giving away his talents, skills, and work as a gift, Adrian has made more per client than he ever did before.

I Want More Examples!

Adrian isn’t the only person letting people choose their price and finding incredible success.

Here are just a few examples (of hundreds that I’ve researched) of people using the gift-economy and Pay What You Want pricing to make a killing:

The Vennare brothers of TheHybridAthlete.com have been running a PWYW store for over a year now, and in an interview I did with them last year, they explained that they make hundreds per DAY using this strategy (do the math: we’re talking 6 figures from no set price).

Disconnect.me is a new tech startup that just raised over $3 million in funding and they run their entire operation using Pay What You Want pricing (and have no intentions to change)

Humblebundle.com makes millions for video game producers and charity by releasing limited-time PWYW videogame bundles every few weeks

Joost Van Dongen, a videogame developer I had the opportunity to interview several months ago, released a hobby project (Proun) and let his customers choose their price – and made over $20,000 from it

Radiohead, Nine Inch Nails, and Amanda Palmer all have made millions from their PWYW album offers (in the case of Radiohead, they made more on their PWYW album than all their previous online album releases combined)

Weinerei Perlin is a Berlin-based winery that sells all their wine using PWYW pricing (and has for over 10 years)

Matt Homan is a consultant that offers blank invoices – and has doubled his income in the process

And this is just a small sample.

There are literally hundreds of other people and companies using this pricing technique and finding great success with it…

But there are also a few people I’ve interviewed who tried and failed.

The question is: what is it that separates successful PWYW offers from those that don’t work out?

Let’s get to it:

How to Remove Fixed-Prices from Your Blog and Increase Your Income

Before you go removing prices from everything on your site, you still need to understand a couple things:

#1. This ‘pricing model’ (or lack thereof) doesn’t work for everything.

Adrian is selling a premium service with a credible range of prices.  He’s not selling gasoline or In-N-Out Double-Doubles.

Commodities* don’t work in the gift-economy.

*if you find a gas station that lets me choose my price, please let me know.

#2. Letting people choose their price only works if you pitch it the right way.

Just because you slap a ‘Pay What You Want’ sticker onto your recycled beer coasters or set the price for your ‘Rapid Pet Grooming’ eCourse at $0+ doesn’t mean people will be generous.

You need to give them a REASON to contribute.

That’s why I created a simple-to-follow framework for anyone looking to apply the gift-economy (and in particular: Pay What You Want pricing) to their products or services (a framework I’ve used to make thousands in book sales and consulting in the past few months).

So consider this your personal crash course in Pay What You Want pricing:

How to get People to Contribute Generously to Your Work: The 6 Step Perfect Pitch Framework

Okay, I know the name is corny, but, as you’ll see, it works.

Here goes:

Step #1. Clarify the Offer

Common sense, but not common practice.  How can people be generous if they don’t know what you’re offering?

In reality – this same rule is just as important when selling a fixed-price product or service.

For more information on how to present a clear offer, listen to Brian Clark.

Step #2. Show the Customer You’re Human

People don’t give to machines (or corporations).

We give to people.

If you want the gift-economy to work for you, you need to connect with your readers, customers, clients, and guests.  You need to show them there’s a person behind the product or service whose blood, sweat and tears have gone into creating it.

Online – that means including pictures and videos of yourself, and writing in an authentic, passionate, and sincere voice.  For more practical tools, The Copywriting Scorecard for Bloggers will help get your writing on track so you come across like you (and not a robot).

Step #3. Appeal to Idealism

When it comes to Pay What You Want and the gift-economy, we still need to give people a good reason to contribute.

Appealing to idealism creates the spark people need to reflect on why they’re contributing.  When we make references to generosity, karma, good-will, etc. we are more able to activate the generosity of others (and yes, people are generous – we just need to give them the opportunity).

Step #4. Anchor the Price

Price anchoring is important for anything you’re selling, but it’s especially important for Pay What You Want offers.

When we price-anchor, we get people in the proper frame of mind for contributing larger than usual sums (or at least, larger than they would have had the price anchor not been present).

Two powerful ways to price anchor a PWYW product is by showing:

  • the itemized costs of materials or resources, or what equivalent amounts would look like on the high-end (e.g. “similar custom designed websites go for $7,000”)
  • the top-tier price points of competing products or services (e.g. “company X charges $20,000 for a new website)

Step #5. Steer the Customer to the Right Choice

Alright, so people have a reason to give (you’ve clarified the offer), they are comfortable with giving something (thanks to price-anchoring), and they want to give (because you appealed to their idealism)…now what?

PWYW and gift-economy is confusing stuff for the majority of the population since they’ve never experienced it.  A lot of people are immediately turned off by it because it confuses them.

You need to remove these fears by being very clear and helping people to the right choice.  You can do this by showing any or all of the above:

1. Total number of contributors (this a form of social proof)

2. Top-tier contributor prices (what did the top 10 people pay for this product?  This can be another form of price-anchoring)

3. Average contribution price (although this may lead to more ‘average price’ purchases of your PWYW offer)

Any (or all) of these will help people recognize what’s a fair offer and give them ample opportunity to be generous (if the average is ‘x’ then I will give ‘x+1’)

Step #6. (Bonus Step) Add Charity to the Mix

This is a game changer.

Want to skyrocket your PWYW income?  Add charity to the mix.

People don’t pay money for a product or service, they pay money for the story.  When we integrate a congruent charity into the mix (something that makes sense in the context of what we’re selling, like teaming up with Kiva.org for The Creative Entrepreneur journal) we multiply the effect of appealing to idealism.

A quick warning: assigning a random charity to support won’t work.  You’ve got to make sure it’s consistent with your message and the intent of your product or service.

The beauty of including charity?  It’s win-win. You make more income, a worthwhile charity gets a cut, and the customer is happy to contribute.

Call me biased, but this is a strategy I’d like to see every business adopt.

Putting the Gift Economy to Work

This is a basic framework for incorporating the gift-economy (specifically Pay What You Want pricing) into your work.

By no means does it mean you must offer EVERYTHING as a gift, nor as Pay What You Want.  I’m also not saying that fixed-pricing doesn’t work better in some cases (it does).

But, as you can tell from the examples above, this stuff works incredibly well when implemented the right way.

I hope you enjoyed the article and if you have any questions – leave them in the comments below!  I’d be happy to answer any and all questions.  This is an important topic and deserves a good conversation going forward.

Thanks for your time, and I’ll see you in the gift-economy…

Tom Morkes is an author, publisher, and pricing consultant, and you can get inside his brain at www.tommorkes.com/problogger where he applies what he learned leading troops in combat to entrepreneurship, art and writing.

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Comments

  1. RC says:

    Great post! I’ve heard of this concept before and have considered how I might implement it. One of the things I do is photography and have thought about using the concept for the sessions. Not sure about it partly because I go on location. Between that and fitness and nutrition training I would welcome examples of when it would and wouldn’t work.

    Thanks

    • Tom says:

      RC, appreciate the kind words.

      My friends Anthony and Joe Vennare run a fitness website where they used PWYW pricing and brought in around $400 / day using it…that’s a solid 6 figure business. Check out there site thehybridathlete.com for more info…they’ve changed up their techniques so not sure what the status is of the website now.

      I have also met photographers using this to great affect with reoccurring clients (because they’ve already built a relationship with the person).

      Keep me posted and let me know if you have any other questions (and in my book, I dissect a bunch more case studies from physical based businesses to services…just check out my site for more info)

  2. The ideas are reasonable, but I doubt that anybody would jump into this easily. Though for people without portfolio, that are just starting this is probably one of the not so many options available.
    Due to fact that I am not born in USA, have lead to undersell my work in the first 10 years of my career.

    • Tom says:

      Kaloyan, it’s not for everyone.

      Obviously, Adrian has done an incredible job and I’ve found success, and companies like Disconnect.me and humblbundle use the technique quite effectively.

      But it definitely takes some practice getting the pitch right and the ability to feel vulnerable / exposed (cause some people could take advantage).

      Thanks for the thoughts man…consider starting with something small just for your most passionate customers and see what happens :)

  3. Layton Mills says:

    Hmm still on the fence about this, but well thought out and agreed with above, some reasonable ideas :)

  4. Mahesh Mohan says:

    Hey Tom,

    Your signature link is leading to a 404. And your first signature link is also incorrect. Check out! ;)

  5. shaheena says:

    Hi

    Nice post and Yes, Blog is very popular social media sites and really helps in promoting our blog and also drives traffic to our blog. I also using it and it is amazing. This post really gonna help many newbies.
    Thank you for sharing.

  6. Hey Tom,

    Thanks for sharing this blog and give the tips for utilizing free time. After reading this blog clicking so many ideas and help for enhancing talent. Also sharing beneficial points to friends.

    Thanks

  7. Shahryaar says:

    thanks for sharing this amazing article. That is really helpfull.

  8. Golden Rule time. The more you give the more you get ;)

  9. Ann07 says:

    Double up your revenue by giving something free. It sounds strange and a little bit silly, but it’s somehow interesting too.

    I’m amazed that it works in Adrian Hoppel’s case.

    So for now, I should believe this story and hope it would be effective for others too. I guess the examples above will work out best if implemented with the right approach.

    I’ve indeed learned from reading this content. Thanks for sharing, anyway! :)

    Best,
    Ann07

    By the way, I found this post shared on Kingged.com

  10. Jan says:

    Hi tom congratulations on being published,you deserve it,i am saving to buy the complete guide to pay what you want pricing plus bonus package
    cant wait till i can buy it cheers jan hollander

  11. Photojimsf says:

    Oh! I used this strategy with wonderful results many years ago as a massage practitioner. After reading this post I’m excited to apply it to my photography services! Thanks for the inspiration.

  12. metz says:

    I was like, “Really? You can have double by giving your work away for Free?” it’s impossible.

    While I kept on reading, Adrian’s story makes sense and now I understand why he bring in double because he didn’t ask over for a fixed price work, he is just working great to finish each work for free, but he earns as his supporters rewards him as what he said “Most clients gifted me with payment, and the payment is more than I ever received in the traditional model…”

    I think it is a brilliant idea, a new way to double our revenue.

    I left this comment on kingged.com, the content curation website and blogging community.

  13. George says:

    Most businesses that are consulting businesses have been doing this for years. Lawyers, CPAs, web designers, and consultants of any type are doing this. I think the key is to find the right balance. Also, it is important to know when it is appropriate to give it away for free and when are you wasting your time.
    I like the web designer example. I’d like to see how this model would catch on more broadly in business.
    I’d like to see it work, but somehow, I doubt it.

    • Tom says:

      George, a lot of consulting businesses (and sales in general) try to get people to pick their price…the difference here is Adrian literally gives his work away as a gift. No expectation of repayment. Pretty wild and certainly something most people won’t do….but for those who take the plunge and lean into their gifts / strengths like this, it’s certainly a marketing edge :)

  14. Vivek Shukla says:

    it is really cool and easy way to increase earning. Thanks for this post which helpful and motivate new bloggers

  15. Gail Oliver says:

    It can be hit or miss. When I was just starting my online marketing consulting business I offered to do consultations for free, just to get the ball rolling. To my surprise, the majority of customers I gave a free consultation to did come back and buy other services from me, even though that was not part of the deal. It all depends on the people you reach. Some people will gladly take all they can from you for free. These are the ones you need to avoid.

    • Tom says:

      Gail, that’s a good point.

      The lesson I’ve learned pretty quick while doing this…to explain to people that pay what you want doesn’t mean free. Neither does a gift. None of it means: I do work for you for free. Instead, it’s about me putting my best into my work for the client, and the client having a choice on what that is worth to her.

      A subtle but important distinction, because the ‘free’ trap isn’t good for anyone (unless you’re doing probono work on purpose or it’s a lead in to an upsell).

  16. Tom Durkin says:

    Interesting article. Its something I’ve actually been considering recently after I took on a charity website redesign for free.

    • Tom says:

      Tom, would love to find what you do with it.

      And remember: it’s now about free, it’s about a gift (we feel obliged to return favors, gifts, kindness, generosity etc. with the same :)

  17. Charity one did the trick here, if one gives some portion of the returned gift to charity, then people will more generously give it back.

    It sounded like an impossible idea, but I am convinced now. Giving the clients to choose the price will always make them pay more than a fixed price.

    This will be a success, if one has great quality to be delivered. The approach here might be different, but it is exceptionally great.

    Anyway, I found this on kingged.

  18. Zach says:

    Hi Tom! Thank you very much for writing about this, but more importantly actually living and doing it.

    Question for you, I’m curious if this would work in the world of Voice Over. There are so many pay-to-play sites, many people undercut each other, and still many others think they can do it themselves (like many service oriented offerings I suppose)

    Do you know anyone in the VO arena doing something like this?

    Thanks!

    • Tom says:

      Zach, it would absolutely work for that.
      1. it’s a competitive marketplace
      2. you can sell VO for a wide range of prices
      3. at the end of the day, people hiring VO are looking for quality and trust…a PWYW / gift based offer would be a great place to build a relationship and business (assuming you find the right, honest clientèle).

  19. Hiren says:

    Hi Tom
    Nice article today i learn something new after reading your amazing helpful article. i follow your tips and i hope it will helpful with me. thanks for sharing article.

  20. Tom says:

    Hi Tom, First of all congratulations for this post. The post is really wonderful. Your passion for writing is amazingly reflected in this post. ALL THE BEST FOR FUTURE.

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