MIT Sloan Management Review Article on Bill It, Kill It, or Keep It Free?

B2B companies can seize new sales by charging for services they’ve been giving away.

In tough times, companies hunt for new sources of profitability and growth, frequently ranging far beyond their traditional offerings. Yet in doing so, many of them overlook opportunities for generating sales from services they’re already giving customers for free. Though it sometimes makes sense to stick with a free model, companies too often make that the default option. That’s a costly mistake.

The solution is easy to articulate but, naturally, much harder to implement. Simply put, managers must determine which services they can stop giving away and then start charging for them. We call this the free-to-fee, or F2F, transition. When evaluating any particular service, the challenge can be boiled down to this question: Should you bill it, kill it, or keep it free?

About the Author

Wolfgang Ulaga is a senior affiliate professor of marketing at INSEAD in Fontainebleau, France. He is the author of Service Strategy in Action (Service Strategy Press, 2017) and Monetizing Data (Value Innoruption Advisors Publishing, 2018). Stefan Michel is the dean of the executive MBA program at IMD in Lausanne, Switzerland, and a professor of marketing and service management. He tweets @michelstef.

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