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It is hard to charge for a product that was once free

Improving Systems and Habits

Scott Miker is the author of several books that describe how to use systems and habits to improve.  This free blog provides articles that to help understand the principles related to building systems.  

It is hard to charge for a product that was once free

Scott Miker

Having worked in product development at several different companies, I have directly experienced what happens when you go from giving something away for free to then start charging customers for it.

I am not referring to doing free trials or using a free version of an app to generate a ton of exposure and then have a select experience available that you charge for.  I am referring to a situation where something was given away for free for a long time and then suddenly that same experience is one that now costs money. 

The reason is simple.  We get accustomed to something as it is, in this case free, and then when it changes we have to change how we perceive that same item. 

While this may seem like common sense, what was surprising to me was that going from free to charging $1 was much more difficult than going from $10 to $20.  In other words it is easier to double the price than take something from free to any amount, even a very small amount. 

When I was working at a non-profit years ago we came across this.  We had some products that were given to the membership for free.  We had a product that generated significant revenue for the organization so it was custom to find all sorts of free add-ons. 

But over time the company’s ability to generate significant revenue from that product diminished.  So we started looking for ways to bring in more revenue from these other add-on products. 

We would talk to members who said they loved the program and gained much from it.  But as soon as we would talk about paying for it, they suddenly changed their tone and would not be willing to start paying, even a very small amount.  They loved the product, as long as it stayed free. 

But other products that we were charging for currently were able to change how much we were charging members.  We could make the cost higher and would certainly get some negative feedback, but members would usually just start paying the higher amount.

Looking at it systematically it makes sense.  The hardest thing is trying to get someone to put down his or her hard-earned money for a product you created.  But once they do this then it changes how they feel about that product and the value they receive. 

In systems and habits improvement, we often find something very similar.  The hardest thing to do is to just start and keep going.  It could be a new workout, a new budget, a goal to read more, playing a music instrument, etc. 

If we are used to practicing on the piano for 1 hour a day it is easy to change that to be 1 hour and 10 minutes.  But going from never practicing to practicing for 10 minutes a day is very difficult. 

This is the very basic idea behind a systems and habits technique called setting the minimum.  In this method, we start incredibly small.  If we want to start practicing the piano, exercising, reading etc. we can start with a simple, like 1-minute every day.

This becomes the minimum that every day you will do.  No matter what is happening in your life, doing this should be possible since it is so small.  Then if you want to do more after doing that small minimum you can do as much as you feel like in the moment.

But the key is that the next day, you don’t try to outdo the day before, you reset and go back to just trying to do the minimum.  Doing the minimum over and over again starts building a habit.  The habit is the important part, not the effort or amount you do in week 1. 

But we all get impatient and want success now so we sabotage our new habit.  We push too hard and each day try to overdo it.  This makes it harder and harder to just get started.  We create a mental block that keeps telling us “this is difficult and we should take a break from it.” 

That block starts to break the daily repetition and starts to create a new habit, one that says not to keep doing it. 

Just as trying to charge money for a product that is currently free, starting a new habit from nothing can be challenging.  So instead of trying to also maximize the amount start very small and work to build that small habit first.  By setting the minimum you can overcome this and be on the way to growing an ingrained positive habit.