zerofare

Zerofare is a term used to describe a pricing strategy where a product or service is offered to customers at no monetary cost. This does not necessarily mean the product or service is entirely free; often, the costs are recouped through other means. Common examples include "freemium" models where a basic version is free but premium features require payment, or services that are free to the user but funded by advertising.

The goal of a zerofare strategy can vary. It might be used to rapidly acquire a large user base, gather market share, or build brand awareness. In some cases, the "free" offering acts as an entry point to a more lucrative product or service, or it may incentivize data collection which is then monetized. Businesses employing zerofare must carefully consider their revenue streams to ensure sustainability.

Examples of zerofare are prevalent in the digital world, such as free mobile apps, social media platforms, and search engines. Physical goods can also be offered under zerofare principles, like promotional giveaways or trial periods. The key distinction is the absence of a direct price tag for the initial offering to the consumer. Understanding the underlying business model is crucial to differentiate true zero cost from a deferred or indirect cost.