I appreciate you taking the time to share what is a great case study, both for retailers and for vendors. We’re the latter, and at first it was hard to swallow your verdict of “shame on the vendor” because he did not love his customer enough to convince her not to leave in the first place.

But on reflection I think you might be right. While it can be darned difficult to “offset the winsome “Free”” I know from experience it can be done (assuming that the customer is not completely irrational).

As you point out, the ROI on “Free” can be downright disastrous. In my opinion the best way to counter Free is to be open and transparent about the ROI on your paid offering. For example, we build reporting into our product that allows our customers to easily quantify the value of our service. We definitely aren’t free, but we definitely do make money for our customers, and they can check exactly how much 7×24.

Thanks again for drawing a great picture of just how messy Free can be.

Stephen Cobb
monetate.com