My conclusion after reading Chris Anderson’s new book , “Free: The Future of a Radical Price”, is that Free is complicated. Don’t get me wrong, this is a great book and comes at a perfect time, since we continue to be greeted each day with fantastic new technologies without any hint of a sustainable business model in sight. Everything is Free. This is a problem in the Marketing Automation space, because the problems that we are trying to solve are complex, and the technology we use is expensive to develop.

 Anderson has once again (as he did in The Long Tail) helped to make sense of a confusing array of factors in explaining how the “Free” model is not only inevitable but natural.  Out of his numerous examples of historical precedence and recent trends two clear factors emerge from his book:

1)      Information wants to be free – Knowledge is meant to be shared. Trying to hide it is like trying to hold a bowl of jell-o in your hands.

2)      The force of economic gravity – Paraphrased, this states that as soon as the cost of a product is known, the price of the product will continue to drive downwards toward that cost.

 These forces are very strong and acknowledgement of them should be at the forefront of your pricing and packaging strategies for your products and services. People will not expect to pay a premium for your expertise or your technology. That is why Free is so complicated, because that is where the cost lies. Anderson stresses that creativity is the only solution, and fortunately offers many examples and suggestions to help get the creative juices flowing.

What are the marketing automation takeaways? Here are mine:

1. Quantify Time Savings – Time is still a valuable commodity that people will pay to preserve. If you are offering an automation solution, you better know exactly what you are automating and how much time you are saving our customers. You should be able to show this to your prospect s and back it up with some numbers
2.  Forget about Protecting Your “Secret Sauce” – Whether it is your technology, or your processes, you should operate under the assumption that everyone already knows it, or worse, nobody cares. Share your knowledge. Don’t spend your time trying to make it scarce, it is just not possible anymore.
3. Search for Bigger Problems – As soon as you sense that solutions are becoming commodities, start looking for more complex problems to solve, that offer more value to your customers. Travel Agents, Newspapers, and Music Labels are just a few examples of industries that are being forced to find value, when their previously scarce products became free commodities seemingly overnight. Yours will follow sooner or later so don’t wait too long.

As I said, it’s complicated and I don’t have an easy feeling about how this is all going to play out. But at least it’s not boring.

You can get some other great perspectives on the book from two great minds, Seth Godin (read his post here) and Malcolm Gladwell (read his article here).  Gladwell disagrees with Anderson, and Godin generally concurs. I encourage you to read these opposing viewpoints, and form your own opinion. No matter what your conclusion is, it is definitely time to figure out how a price of “Free” affects you.