Beware: Free comes with a price

There has been some healthy debate surrounding Chris Anderson’s latest book, Free. I’d like to join in and give the world a definitive answer regarding technology’s ultimate impact on the pricing of intellectual property but I left my crystal ball at the track. A not-so-subtle fact lost in this debate is that price is not the same thing as cost.

Every consumer decision - even those without a price attached - comes with a cost. Sometimes it’s time loss. Sometimes it’s a drop in status. Sometimes it’s a lack of convenience.  Sometimes, in the case of most free online services and applications, the cost is allowing yourself to be exposed to ads. Or having to deal with a lack-luster user experience, having to waste time digging for what you’re looking for. (Yeah, I’m talking to you, YouTube.)

There are thousands of free products and services available to the American consumer right now. Many won’t survive despite the to-good-to-be-true price.

Pricing models are important. But giving your product away doesn’t guarantee success. What’s more important is making sure the value of your product exceeds the costs to consumers (both monetary and otherwise).

Sometimes free costs too much.

Creating disposable brands.

Today there are about two dozen compass iPhone apps sold at the iTunes store. With yesterday’s announcement of the new iPhone 3GS (with its built-in compass app), Apple has pretty much leveled the entire market. With the speed of innovation increasing every day, no brand is safe from being made obsolete overnight.

Marketers work hard to build up brands over time. We nurture and invest in them. We promote their legacy and legitimacy. And we’ve bought into the notion that while trends may come and go, strong brands will always endure.

Perhaps that’s merely wishful thinking.

Rather than focus on how to build an enduring brand, could it be more constructive to think about what might make your brand obsolete? What societal trends, if played out over a few decades, would spell disaster for your brand? What companies outside your category could easily enter and disrupt the current balance of power?

Better yet, why don't you determine the fate of your brand? Make it disposable. Decide how and when it should die. Plan to kill it and create a new one. Make speed of innovation your ally rather than your enemy.