Most of the students who we advised said that knowing what they know now, they would have sought advising from us only if it were free.
I think this is precisely because you aren’t charging for advice. If you charged a $200/hour “consulting fee,” people would see you as professionals, and value your advice highly. But now that you’re giving advice for free, you’re just some random Internet guy telling kids how to run their lives.
High school and college students generally don’t have much money.
Well, you market it to the parents. People pay for college admissions consulting all the time.
Yeah, but nobody’s going to think that if the service is offered for free. Some people might if they charge for it. By charging a certain amount you tell people how much they should value your product.
Remember several years ago, when people were concerned about how unreliable Wikipedia was, and told students never to cite it in their essays? It took a long time for people to trust Wikipedia, and nowadays people only trust it because lots of other people trust Wikipedia. But in the case of Cognito Mentoring, the average customer won’t know anyone else who’s used the service, nor is it popular or established. It’s not impossible for a free service to be trustworthy, but it’s a lot more difficult to trust a free service than a paid one.
At most you can do some anchoring. You can tell people how much they should value your product and people can (and often do) disagree with that.
There is folk wisdom which goes along the lines of “it’s worth whatever you paid for it” but it is becoming rather irrelevant nowadays. Look at the tech scene. Consumer-oriented services (Google, Facebook, Twitter, Flickr, etc.) do not charge their customers directly, they all find other ways to make money. Their services are “free” (yes, I know, we can discuss whether they are actually free and are you a product or a customer, but that’s another topic) and yet clearly recognized as very valuable. Even if they do charge directly, they almost always offer a generous free tasting that is sufficient for many uses (Evernote, Dropbox, etc.)
The point is ease of trying. Testing a free service only costs you your time and so is easy and tempting to do. In particular, you don’t need to trust that service very much because, again, all you are risking is your time. On the other hand, charging $200/hour is going to make most (but not all) people require some proof of the value before they part with the cash. A paid service needs more trust.
I understand that some people interpret price as signaling quality. But there are other factors in play, too.
I think this is precisely because you aren’t charging for advice. If you charged a $200/hour “consulting fee,” people would see you as professionals, and value your advice highly. But now that you’re giving advice for free, you’re just some random Internet guy telling kids how to run their lives.
Well, you market it to the parents. People pay for college admissions consulting all the time.
Conditional on those people first deciding that these two guys are worth $200/hour.
Yeah, but nobody’s going to think that if the service is offered for free. Some people might if they charge for it. By charging a certain amount you tell people how much they should value your product.
Yeah, nobody in their right mind would highly value things like Linux or Wikipedia… Or the Sequences, for that matter.
At most you can do some anchoring. You can tell people how much they should value your product and people can (and often do) disagree with that.
Remember several years ago, when people were concerned about how unreliable Wikipedia was, and told students never to cite it in their essays? It took a long time for people to trust Wikipedia, and nowadays people only trust it because lots of other people trust Wikipedia. But in the case of Cognito Mentoring, the average customer won’t know anyone else who’s used the service, nor is it popular or established. It’s not impossible for a free service to be trustworthy, but it’s a lot more difficult to trust a free service than a paid one.
That is true.
There is folk wisdom which goes along the lines of “it’s worth whatever you paid for it” but it is becoming rather irrelevant nowadays. Look at the tech scene. Consumer-oriented services (Google, Facebook, Twitter, Flickr, etc.) do not charge their customers directly, they all find other ways to make money. Their services are “free” (yes, I know, we can discuss whether they are actually free and are you a product or a customer, but that’s another topic) and yet clearly recognized as very valuable. Even if they do charge directly, they almost always offer a generous free tasting that is sufficient for many uses (Evernote, Dropbox, etc.)
The point is ease of trying. Testing a free service only costs you your time and so is easy and tempting to do. In particular, you don’t need to trust that service very much because, again, all you are risking is your time. On the other hand, charging $200/hour is going to make most (but not all) people require some proof of the value before they part with the cash. A paid service needs more trust.
I understand that some people interpret price as signaling quality. But there are other factors in play, too.