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Give it away free – yer what?

February 9, 2011
John Inman

"I'm Free" - when you offer free goods, what do you get in return? And why?

An interesting debate arose with various people today about giving things away free. Free? Is anything ever given away free? Of course, the answer is no. Freedom is a condition of behaviour – in sales and marketing as in prison.

Anything in marketing which is given away free should always be proffered in response to a behavioural trait. Whether this is a free calculator in response to subscribing to a magazine, or whether it is a notional “free” saving of 25% when you subscribe for two years instead of one.

Yet a common misconception today is that people, customers, will warm to a company which gives things away unconditionally. Somehow, a free gift given without rhyme or reason will engender warmth and loyalty.

Hardly. Once customers receive something which is too good to be true they will come to perceive that as standard operating procedure – SOP. Once you have a reputation for low prices, free gifts, incentives at any price then customers will always think of you in that way. Think T M Lewin, think shirts at sale price.

By all means, give things away free but do so as a response to customer behaviour. Subscribe before (date) and get an extra two issues free. Buy two books and get the cheapest free. Buy one get one free (BOGOF). Renew your subscription for two years and receive a free report worth £50.

But give things away “just because” and you do two things:

  1. you condition customers to expect to get the same thing next time – they’ll always expect something for nothing (something which costs you money)
  2. you devalue your brand perception – and  remember, brand strength lies in emotional perception. No emotion, no perception, no price credibility

In publishing, margins are way too tight to allow “free” goods. Yet still the myth persists that low price, free goods, free rewards will somehow persuade customers to think warmly of you and want to buy.

If you want price buyers, if you want vagrant customers who shop from place to place in the hope of a bargain, then by all means give things away for no reason other than to appeal to the lowest common denominator of customer.

But if you want to stay profitable, if you want to preserve your value then know why you make offers. Understand the strategy behind the policy rather than the policy itself. Price and offer incentives according to defined customer behaviour. CRM, customer relationship management, will collapse if everything falls down to a price bargaining discussion.

As the old saying goes, there’s no such thing as a free lunch.

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