How to Respond to a Free Product Introduction

Free products and services are everywhere – from buy-one-get-one-free offers to free office software like Canva and Google docs, and, yes, this very podcast. If your revenue strategy does not include give aways, these free goods and services can put extra pressure on your business. How can you compete?

Brigham Young University professor of strategy David Bryce studied give-away strategies across 26 different product markets. He says that companies make two key mistakes when they try to compete with a free entrant: responding too quicky with their own free offering or not responding at all.

“Really, the challenge becomes how do established companies think about their own systems in ways that make those systems not become obstacles to launching free but really become facilitators,” he explains.

In this episode, you’ll learn which key factors to consider as you decide how to compete with a free entrant. You’ll also learn how to refine your own product mix and consider which of your customers to target with free products.

Key episode topics include: strategy, competitive strategy, giveaways, rebates, third-party pay, bundles, advertising revenue, growth, customers.

 HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the original HBR IdeaCast episode: When Competitors Give Away the Store (2011)
• Find more episodes of HBR IdeaCast
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org.