"selling by giving", or, "gift economics"

Seth Godin does it.

Brian Clark does it.

Gary Vee does it.

Esther Dyson does it.

James Governor does it.

Kathy Sierra does it.

Dennis Howlettt does it.

John T. Unger does it.

Robert Scoble does it.

Fred Wilson does it.

These eight smart, kind, great people, some more well-known than others,  are masters at what I call “Selling by Giving”.

They put stuff out there, as gifts. Great content, great ideas, great insights, great personal connection. By giving so much of themselves, for free, every day, they build up huge surpluses of goodwill, so when you’re finally in the market for something they’re selling (and they’re ALL selling something, trust me), they’re first on your list.

I do it, too, just not as well as these guys. I’ve published thousands of cartoons on this blog over the years, and that’s gotten me a lot of business. And not just fine art prints, either. It’s gotten me consulting gigs, full-time salary jobs, book deals, paid speaking gigs, marketing  jobs, I could go on…

Selling by giving. Anybody who’s been watching any of these guys for a long time will know exactly what I’m talking about.

But here’s what’s interesting to me: I can remember not that long ago, say 5 years, when this type of marketing seemed pretty freaky to most people. Now it’s considered normal, at least to smart marketers. FIVE years. That’s all.

I could see that in another five years, ANYONE who wants to market ANYTHING successfully- be they small mom n’ pop shops to large companies, will have to be fluent in Gift Economics, to a level that seemed COMPLETELY alien only a few years ago.

This includes you. Are you ready for it?

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  1. Two words; Pay. Wall. Is it a fad or the end of the internet’s free ride?

    Personally, I like the “freemium” model coined by Fred Wilson (I think), and successfully implemented here at gapingvoid.

  2. Hugh, I do this all the time in spite of the fact that I’m unemployed. My hierarchy of values is: regard > results > money – and all my efforts are to build up the regard or reputation associated with my name. That gives me the opportunities to solve problems are create results that may one day lead to money.
    As far as I know, it is not possible to do this the other way around – at least not for long.

  3. I did this yesterday. I didn’t even know I was marketing. I sell some stock photos and a woman I met yesterday asked if she might have a few. I was happy to send them to her. She was friendly. She used one of the photos today in her blog. It made my day. That was payment enough.

    Great blog post.

  4. Small mom’n’pop shops are already doing it.

    I live an hour away from the nearest city, in a small town which is a national candy production centre. Last spring, a brave family opened a “gourmet shop”, something quite surprising. Everything there is _very_ expensive. For the first few months, they gave all sorts of things free, just for coming in. It wasn’t “free with purchase”. For example, handmade muffins at 10x the price of supermarket ones, you’d go in to ask for the price or to see if they sell caviar, and they’d give you a bag of muffins.

  5. I’ve experienced this first hand, Hugh. I started a blog this month – four weeks ago today, to be exact. I share information, and only have five posts up so far.

    What has blown me away is the number of people who have contacted me to hire me. That wasn’t the purpose of the blog at all. (I’m a Teaching Sells alum, and will introduce a membership site later this year).

    You are right: this is marketing at its best. Serve your audience, and you’ll be rewarded for it.

  6. The problem I see is when a time comes that people expect everything to be free. As a photographer, I know this is already happening, when companies ask you to do a shoot for free, or give them free stock because they’re important and their name will look good in your portfolio.

    I suppose one needs to tread a fine line and make sure the potential clients understand that while you give some stuff for free, you’re still for hire and won’t give everything away at no cost.

    • Miserere, people ask me for freebies EVERY DAY. And most of the time, I say no, or just ignore them completely.

      Just because I reached a certain level of cartooning, doesn’t mean I ever felt entitled to a paid profession doing it. Long-term, that would’ve slowed me down in the end, anyway.

      But I never had the overheads of a pro photographer: $3000 cameras, lights, darkroom, exposed-brick-loft studio in some up-n-coming neighborhood. When I worked in advertising in Chicago the town was swimming with those folk. Most of them didn’t last too long….

  7. As does Miserere, I see the “all things should be free” mentality all around me. I watch private businesses using “interns” who are really students required to “volunteer” by their High School/College instructors so that they can get “real-life” experience in business. While great for business, and arguably the student, it was not great for the graduate whose potential job was being taken by the “volunteer intern.” What is the incentive for the business to hire (pay) when they can get the service rendered free?

    I look at “free give-aways” this way: every time I allow my daughter a free pass on cleaning the bathroom because of something happening in her life, (and when isn’t something happening? Define happening.) I weaken the rule that the bathroom must be done weekly. If I made one exception, she doesn’t hear(understand — read) it as one exception, she understands that the rule isn’t really important enough to be an always rule, more exceptions can readily be made.

    Once the economic connection between product provider and buyer/client is severed by the product being delivered free, why shouldn’t the buyer expect the next one to be free too? It isn’t the buyers’ rent that is being placed at risk. The buyer only know/understands his own need to make a living by getting product/services at the least possible price.

    • Hey Leslie, to answer your great points, please allow me to point you to an interview I did with Lateral Action several months ago:

      5. After years of giving away cartoons for free, you’re now selling them as fine art prints – and they’re going like hot cakes. What does this say about what people are willing to pay for in a world of free content?

      If you know any website where you can download, for free, a genuine Picasso oil painting, or ditto with a Paul Klee or Joan Miro, please let me know. “Content” may be trending towards free, but the Picasso or Miro Estates are hardly hurting long-term because of it.

      Any profession is in constant, ever-changing negotiation with “Free vs Paid”. When does your lawyer friend offer you free legal advice, and when does he start charging? Ditto with your heart-surgeon pal you play tennis on Tuesdays with. Musicians give their music away for free on MySpace, but charge for the CDs, live gigs and the t-shirts. Petroleum Industry consultants might give 5% of their stuff away for free, just to drum up some new business, but then charge top dollar 95% the rest of the time. In Internet circles, the 95-5% converse is often true. Everyone has their sweet spot. Cartoonists are no different.

      • I have heard Seth Godin refer to it this way — “We are all in the souvenir business now.” — speaking to a group of authors.

  8. I definitely agree with @gapingvoid. We are living in this brave new world where “try before you buy” has become the norm and great free stuff has become a way to cultivate relationships.

    I do also understand @Misere’s point about the problem of people expecting everything for free. Brian Clark makes an excellent point about managing expectations and letting people that you are not the village idiot who keeps giving everything away for free.

    I think so long as you are open and honest about the fact that you have some items for free but are still for hire you will be able to exist very well in this brave new digital world.

  9. Back in the 60’s, bands like the Grateful Dead, Jefferson Airplane, and more used to give free concerts all the time. Then of course, later they made tons of money. This was the first time I heard of do what you love and the money will follow – or give away what you love and… well, you get the idea.

    I am learning from you guys now.

  10. @Leslie — Good points Leslie. I write about this very concept very often on my own blog. I conduct my own marketing efforts using this model — I give away lots of free content — but I never give away my core services. These must be paid for.

  11. Great post. Great art. Many of your ‘cards’ are providing some free laughs – something that can never be ‘commodified’.

    Hope you’re cool with using some of your images to emphasize a point…

    keep it up, thanks.

  12. I have to say that I get more satisfaction out of giving my services away than selling them. Now that doesn’t mean, that I don’t advertise my classes every chance I get. I have to always remember that wolf at my door named VW Credit… So I sell as well as give. But I’m also a firm believer that We’re All Here To Help Each Other, and that When We Help One Of Us, We Help All Of Us… So what I need to make ends meet – seems to arrive at the exact moment I need it… Serendipity just keeps on happening…

  13. Sometimes you have to give value first before you can get. You give someone what they want before you can get what you want. It’s give and take – in that order.

  14. […] “selling by giving”, or, “gift economics” Published: January 29, 2010 Source: Gapingvoid Seth Godin does it. Brian Clark does it. Gary Vee does it. Esther Dyson does it. James Governor does it. Kathy Sierra does it. Dennis Howlettt does it. John T. Unger does it. Robert Scoble does it. Fred Wilson… […]

  15. Funnily enough, I was introduced to your work through IGNORE EVERYBODY, which I bought (and enjoyed very much). Only after that did I explore your blog freebies. :)

    My band recorded a song about someone living with undiagnosed myalgic encephalomyelitis (aka “chronic fatigue syndrome”) in response to the prejudice that exists about the disease. Our producer mixed it down and put additional instrumentation on it for free. We let an advocacy site use the song to take donations (all of which go to them), and we made it available for free download on our Myspace page.

    This has not, as far as I’m aware, led to more sales of the CD we have for sale. But we’ve gotten some great feedback on the song from people who have ME. Sometimes, that’s gotta be enough.

  16. I love this! I love it for the marketers you’ve shouted out – Some known to me, others new discoveries.

    But I really love it because this is becoming the talk more and more. Some people can’t understand why I put my comics on the net for free, but this is the model that’s emerging and I want to be at the front of it!

  17. Oh so right, i work in the entertainment business and given that the market it East-Central Europe is still developing, gifting brings best results real fast. Takes a while to teach people to do this but once they see the final numbers at the end of the month they do get smarter and listen to what you have to say about gifting.

  18. Hugh, Great post!

    This is a question I have struggled with for a quite a long while and have finally decided to take the leap. And it is a leap of faith.

    I have been afraid if I offered my best information (I thought my product was information) for free, then why would anyone pay me for it?

    My faith says, “Lots of people!”

    Why? Because it’s not just the information I am offering, which they might be able to find elsewhere on the internet, already free, but my own unique way of saying it, drawing it, sculpting it, painting it, wrapping it, packaging it, my own unique way of TRANSFERRING THE FEELING OF IT, giving you an EXPERIENCE you can’t get anywhere else.

    No one says things quite the way Seth Godin does. No one ever drew cartoons the way you do. And no one conveys the things I teach in quite the way I do.

    At least, that’s what I have come to believe. I’ll check back when I’ve got my website up and running.

  19. You could try to teach this concept in some marketing schools, from some countries that did not change their curricula since more five years.
    It could be an interesting experience for you and very useful course for the students. :)

  20. The problem in practice with all this open source, free mentatlity is that it gets exploited. Especially with aggregators: Facebook, istockphoto, Amazon, eBay, Twitter etc. etc. If you look closely at these sites, there is, at core, a small, closed group of individuals seeking nothing more than profit. That said, I totally understand your point that before you get loyal customers, it’s better to give them something for free. It’s the law of reciprocity.

  21. this article reminds me of a book by Nicolae Steihardt it’s called “Giving you shall receive”. good book.
    nice post:)

  22. […] “selling by giving”, or, “gift economics” […]

  23. On my own photography site I was charging a set membership fee to view my galleries, but since I made it donation based I’ve actually made more money.

    Its not exactly giving for ‘free’ but its the same principal I guess. People can give just a few pence if they like, but most people give a few pounds, and some a lot more.

    I guess people are quite nice when you are nice to them :)

  24. Just checked out your site, Oli — very nice images. Reminds of the girls on the back of the old Tennents Lager Cans!

  25. […] “selling by giving”, or, “gift economics”: I could see that in another five years, ANYONE who wants to market ANYTHING successfully- be they […]

  26. There’s no reason to give away anything for free. You can always ask for something small in return. “Here… have a free bag of muffins, all we ask is that if you like them, you tell your friends about us!” or “I understand you can’t afford/find the ideal music for your podcast. Sure you can use my song as the intro… just put me in the credits and link me on your site.” Even the creative commons license or GPL is set up this way such that “the community” will get something in return when a “public” work is used.

    I don’t like freebies because it attracts people who expect more of the same. But when you attach modest conditions to the “freebie”, you haven’t just given away a freebie, you’ve come to an honest “negotiated” agreement. And if you can be flexible and creative and modest in your demands, you will be respected as a professional for not giving your stuff away, and also appreciated as a reasonable person to do business with in the future.

    I never expect freebies. However I often approach people with success in other areas than I and pitch them with an offer: Here’s what I need and you can provide it. Here’s what I can give you if you’re interested. In these agreements, it costs neither party a penny. And yes, I usually think I’m getting the better deal, but oftentimes, they think that they are. It’s a freebie-plus for both parties. And it’s a nice way to start a business relationship.

  27. I am about to donate an original work of art to a fund raiser, it serves several purposes to me. 1. It is raising money for a good cause. 2. It is placing my art in someone`s home who never heard of me and they get to enjoy my art where before, they wouldn`t have discovered me. 3. Lots of other parties will have a chance to see my art and take my card to contact me if they lost out on the silent bid. 4. I get to feel good that I gave to the community.

  28. […] Ich persönlich sehe das etwas anders und eher wie Hugh MacLeod: “selling by giving”, or, “gift economics” […]

  29. […] with iTunes. But filling in triangles also works – in many ways this is the key method for building gift economies that are driven by effective communities. This is the model used by Seth Godin, Hugh MacLeod and […]

  30. My brother-in-law is originally from Mexico and still struggles to speak clear English. His ESL teacher suggested that he watch American television exhibits to pick up on idioms which have been commonly utilized. He loves to Get Free Diablo 2 Items Online. so, every chance he gets, he borrows our laptop to accomplish just that. My husband and I desire to see him succeed in this goal so we are considering purchasing him a laptop for his birthday. He would demand to buy World wide web access, but I imagine they can afford that on their monthly budget. I haven’t addressed this with my sister yet, but hope to this weekend.

  31. […] about the role of “free” in my work. I hadn’t got around to replying to the comments when Hugh MacLeod posted some excellent thoughts on the role of “gift” in contemporary marketing. After listing some examples of people who use “gifts” well, he […]

  32. […] I do read Seth’s blog each day. He’s one smart cookie and almost always connects with what I’m thinking and doing. The age of the factory is over. Not just the factory like Ford builds cars in but the factory where armies of people create insurance polices and then send armies of salespeople out to sell them to you. Capitalism is over and has been replaced by the giving economy. […]

  33. […] Gift Economics – Content may be trending towards free but originals still do fine in the long run.. (Gaping Void) […]