Pages

Monday, January 4, 2010

Free is still a head turner

No matter if you’re rich or poor, “free” is still a head turner.
Last time we discussed guarantees. Guarantees are just another form of free. It reverses the risk and gives the consumer confidence that you might be worth trying.
Many years ago a couple of motels in the San Francisco Bay area experimented. This was the era when TV in a motel room was often paid for by putting coins into a slot to turn on the TV – and then you’d only get 3 or 4 channels. That aside, one motel advertised its rooms for $17. TV was just $3 more. The other advertised $20 rooms with FREE TV. By a 2-1 margin FREE TV won. Customers paid the same price, but wanted “free”.
Free turns head.
One firm I worked for made its living off of free. Just call to get their product free. Only pay for postage and handling. They made their money on postage and handling. Then they made more because no one wanted just one. The second item was expensive but because the first item was free it seemed like the second item was 50% off. Of course they had other products that the person was asked if they’d like and many bought the add-on or up-graded, or follow-on products. It all began with FREE.
It doesn’t have to be a give away of your product. Give away something else just for trying your product. As a general contractor we gave away a free dinner for two when a customer closed the sale of their home. The dinner cost us $50 in today’s money. The home cost $300,000. But you’d think the customer’s had just won the lottery when we gave them their gift certificates for a night out. We didn’t advertise the free dinner. That would just be silly – buy our house and get a free dinner. Nonsense. We didn’t even tell them anywhere that they were getting the free dinner. We just found out when they were planning to move in and had a courier delivery the gift certificates for dinner to the couple just before moving in. When the dishes are still in the dish packs and the couple are exhausted from moving, what could be better than an excuse to get away and relax while someone else serves. People loved it. Happy customers are good for business.
Free can also be in terms of Buy One, Get One FREE. I’d rather say it “Choose One and Get One Free.” Anytime I can eliminate the sense of them having to put out money the more I can focus on what they get. They know they’re buying. No need to remind of that. Focus instead on what is free.
Formula 409 got their start this way. They were selling okay in a region and wanted to go national. Because they were selling their cleaning product effectively, Johnson and Johnson figured this was a good area to introduce their new cleaning product. It’s always best when selling a new product to sell to people who already appreciate what the product can do. Competitors have done the work of educating. Now you offer something better, faster, cheaper, longer-lasting, etc. You piggy back on their work. Burger King got its start by locating near a McDonalds. Line too long at MickeyDees, there’s another fast food alternative.
Back to 409. J&J let the word out to the supermarket chains that they were going to have a major test in one of the cities in the region where 409 was located. The 409 guys quickly got the word. Rather than panic, they got smart. They stopped refilling orders to the test city. They pulled their product off the market. If orders came in, they got ignored. If a supermarket buyer called from that city, they got put on hold. Soon there was no Formula 409 to be found in that city. When J&J brought in their cleaner, they had no competition. Sales went through the roof. J&J knew they had a winner.
J&J began preparation for the next test phase to the whole region. 409 guys waited until just before J&J would be shipping. They ran a region wide special. Get one spray bottle of 409 and we’ll give you the huge refill bottle that would last 3 months... FREE.
When J&J’s cleaner arrived, it sat on the shelves. Everyone had their cleaner. Wouldn’t need a refill for 3 months. J&J executives were furious. Head rolled. All product was recalled. The cleaner was dubbed a failure and dropped from the line. Formula 409 had clear sailing.
Free is powerful. Use it smartly.

Special Note to Singers: Give a free concert. Invite the shakers and movers. Or ask only that they donate to some wonderful cause. Be sure to have a way to capture all of the names of those who attend. Follow up with them and volunteer to hold a holiday concert in their home. They’ll pay you nicely for that. Sell your CD’s to everyone who attends. Put everyone on your “house list” that I discuss in detail in “Marketing Singers.” You’re building a Perpetual Job Machine. And, you never know. The shakers and movers know the right people in the theater. They’re likely patrons. Get them to help you get noticed by the opera companies or theater owners. Everyone loves a winner. It all began with FREE.

1 comment:

Betsy Lee said...

I liked this article. :)

Post a Comment