Originally published March 16, 2015 , updated on September 18, 2024

One of the most powerful concepts for me in online business is eKarma. It works for both businesses and social enterprises. It works on the principle of, the more one gives the more they receive. In this post I will solely focus on Karma to make a profit. The theory and my practical experience is that the more one gives for free the more they generate in actual income.  Although, here are some assumptions I have made about business implementing it:

1. The business using Karma has a genuine offering i.e. product or service, i.e. they are adding real value for customers
2. It’s not about just giving, but giving with no expectations of return on investment.
3. Give but don’t be unfair to yourself or your business. Know your limits!
4. Giving is not time bound. You can’t expect results to be instantaneous (although, you can guesstimate the return timing, more about it later).

Wikipedia defines Karma as “the principle of causality where intent and actions of an individual influence the future of that individual.”

eKarma Requirements

I call it eKarma, as it applies to most online businesses. The main requirements to attain eKarma is to offer:

1, Free Trials: Most Software As A Service (SaaS) businesses now follow eKarma, whereby they offer free trials before purchase. One might think of it as a marketing ploy to mitigate hurdles for the customer, although in fact it’s true giving. As the customer gets an opportunity to receive before parting with their money. This symbiotic relationship encourages to increase trust in the company and hence increases business.

The Value: We at Goodman Lantern offer every customer 2 hours free trial. These two hours costs us money, not only for those two hours but also before, working on the scope and getting project managers involved to prepare requirement analysis. We have offered these trials to several people and almost 90% of them became customers. We didn’t expect this to happen, but it works!

2. Free Work: It’s not always about the money. Many at times our clients do not understand the value of doing a task, which would be beneficial for their business. As a result, they don’t want to pay. We would generally (with customer’s permission off course) offer to do this task for free for 1 to 3 months. And showcase the genuine positives, which results in more business. That’s when we decide to charge them.

The Value: The reason why this works is that, customers generally have a clear idea of what the Return of Investment looks like, although not necessarily how to achieve it. As a result providing them a service, which can add value (for free) is allowing them to look outside the box. If this genuinely works they will pay.

3. Be a Friend: Most SMB owners tend to work in small teams. Generally speaking, it’s lonely on the top and most SMBs are looking for people to help them with more than just business. Empathy goes a long way. This includes genuinely adding value and not selling in products or services just for a profit i.e. provide service as a friend would!

The Value: In my experience, business owners are talkative bunch, they consult other founders and share experiences. If you add value, communicate and advice as a friend, they will recommend you to others. And referral business is the best form of sales.

4. Charity Starts at Home: Before you extend eKarma to customers offer it to your staff and consultants who work for you. Whatever you apply to customers should start with your very own suppliers. I would highly recommend making sure that your team is happy. An occasional treat, drinks session, surprise breakfast etc would go a long way.

Example: Recently one of our client’s team member found out that it was his birthday. She mentioned that in the Philippines, where she is originally from, they bought ice-cream for friends. Immediately he sent $10 over for ice-cream for her and family and demanded that he wanted to see a picture of them having it. According to him, in terms of his soul, it was the best $10 he had ever spent. He is not sure of the financial value yet but he told me that the team member’s performance has certainly improved. Fantastic ROI isn’t?

 5. Thank People Regularly: No man is an Island and no one can survive without the goodwill of their team, suppliers, customers, friends, family and surroundings. It would hence make sense to thank the people around for their support and inform them where you are in your business, use email, social media or more to do so.

The Value: I have often do this and the results have been good. Usually with such communication via email 50-60% of people respond back with approximately under 5% have some work for you or knows someone who could collaborate.

6. Regular Communication with Current Customers/Investors: As we have previously established, it’s lonely at the top. Hence, whatever help you can offer your clients/investors to keep them abreast via constant communication would be fruitful. I highly recommend communicating with them at least once a month informing them on how the money/effort they spent with your business is growing.

The Value: In my experience this has lead to customers reacting positively. As opposed to many people thinking of this as a spam, I have seen existing customers see it as a proactive approach, resulting in stronger ties or up-selling services or products.

Return on Investment (RoI)

The return on investment of eKarma comes in three forms. Although, no one knows when it pays back. Although you might have a hunch, I don’t think anyone can precisely predict it.

1. Short Term eKarma: This is when you would receive a result between 1 to 90 days. Generally, free trials for small Capex projects generate these results. While it’s not guaranteed, eKarma has definitely lowered the barrier to entry for your customers. If you do start receiving Short Term benefits, I would recommend you start being extravagant in your giving.

2. Mid Term eKarma: This is when you generate results within one year. This is probably the most common form or eKarma, as within a year the prospect client starts to trust in you. Your eKarma account starts to look positive and you receive leads who would convert into customers after a 10 mins phone call. Some Mid-Term examples are via Blogging, Podcasting and White Paper.

3. Long Term eKarma: Although, the most influential and powerful form of eKarma is when you are invested in it for a long time. Where one is constantly giving back in the form of sweat, tears and hard-work. Without fully knowing where the return on investment would come from. This in my mind is true form of giving. Many companies have received great success from it, especially Open Source Software. Including WordPress, Java (programming), Mozilla, Ubuntu, MySQL, and more.

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