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.
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.