Driving free leads versus getting even a dollar from someone are universes apart.
There is a concept called the “penny cliff”, where product companies who offer their stuff for free assume that they can get nearly the same number of subscribers at $1 a month or even $10/month.
Turns out that the distance between free and a penny is greater than from a penny to $10/month– because the psychological cost to decide to buy (no matter the price) is nearly the same, whether a penny or $10.
Free is not a good proxy for sales unless you’ve tested small paid offerings against that same audience.
Since if you don’t have the right audience, no amount of testing will overcome this.
And that’s why we shouldn’t make big bets without testing via the Dollar a Day strategy or against lists that we own.
I saw a successful entrepreneur last week sign a $900,000 deal to buy traffic without having a product for sale nor making sure the audiences were even a fit.
It’s a massive bonfire of money– spectacular to watch, except for the poor guy who invested the money.
You can’t make chicken salad out of chicken shit-ake– so test first, then scale up.