Why You Shouldn’t Be Giving “FREE” Items When You’re a New Business

Shaun H. Ruff


When you have a new business, you are easily excited to announce your products and services. Whether you’re trying to promote your new business with a raffle or other various tactics to promote, free isn’t always good.

Freebies encourage people to try your business. They’re more likely to come back if they have a positive experience. Customers are creatures of habit, and it’s tougher to win a new one than keep an existing one. Thus, it may not be a good idea to offer “FREE” services or products to existing customers. 





If it costs more therefore it has to be a better product? This is the first thought when someone sees you offering “FREE” services/products. They will try it, but they are still questioning if it’s a decent service/product. When something is free, it doesn’t necessarily mean that it’s bad, but it does mean that we will see less value in it. 

Offering a free trial is a common practice in any industry. You use it as a tactic for attracting customers by giving them a snippet of your product, so they’ll be compelled to buy. Free products, though, leave you with nothing to promote or upsell later.

The majority of founders around us have experienced that it’s nearly impossible to get people to pay for a product if they’re already using it for free. It’s just not going to work to ask them to pay for your product suddenly when they’re used to getting it for free.





To put it briefly: giving away your product for free may work as a short-term method to attract some PR attention, but it will do much more harm than good in the long run. In the long run, it will do much more harm than good. The value of things is largely determined by their price. As humans, we tend to attribute value based on the price.





When public health is at risk, such as during a pandemic, most companies will give away their products for free. You will garner some attention for your brand and product as a result of this noble endeavor.

The problem is, there have been customers paying for your product for quite some time. People will probably not be pleased when they find out you are giving them something for free that they have been paying for. 



Giving your product away completely for free may seem like a good idea, but there are other alternatives to “stop the bleeding.”

As an example, ABC company offered a free month to all its paying customers. As you were logged in, you had to click a button on the company’s dashboard to access the “discount.” To be clear, the discount didn’t apply to everyone automatically – you had to manually sign up.

There were two reasons why this tactic worked. Firstly, it didn’t acquire new users just for the sake of being free. The second is that it awarded paying users and provided them with real assistance while everyone was struggling.

You can also give a user a free month just before they churn (or stop using your product) if they are just about to do so. Companies cut monthly subscriptions everywhere in order to save costs.

You can do business as usual, and when users decide to cancel their subscriptions, offer them a free month. By doing so, if someone is churning due to dissatisfaction with your product, they’ll churn nonetheless. The churner has a month free to consider his or her options if they’re churning to save money.

I believe the most important lesson from both examples is: Don’t grant your free month to everyone at the same time. Be selective in who you offer it to. Do not let your subscribers take your subscription fee for granted, no matter what it is.

Your customers will appreciate you helping them through a crisis in many ways. The free distribution of your product is not one of them, in my opinion. Using these two approaches will reduce churn and reward your most loyal customers at the same time.




You must attract customers who are happy to pay you because you’re making a real difference in their lives. Before it’s too late, it’s best to verify these customers exist, and that they are willing to pay.

Take advantage of early feedback and resist the temptation to give everything away for free. Nobody’s interests are aligned better than profits.



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