The last few days has saw me attending some business events and so I have been in the company of other small businesses in my location. As you can imagine with a room full of women, conversation is free flowing and covers all subjects – but one that came up this week caught my interest.

The group discussed the topic of self worth, and that apparently successful methods of promotion and marketing were in fact detrimental to the success of the business. Whilst I agree that downturns in sales and especially financial struggles can really get you down, I don’t think this is the cause or the symptom of Freebies.

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I feel that the mistake with this thought process is thinking as a consumer – as a business owner, you aren’t! The notion of Free is being used all around us – not only by small businesses, but larger corporations too – all around the World. It was used on a smaller scale in the meeting too – the exchange of business cards, none of which I paid for except my own, very pretty ones.

Using these examples, think of the benefit to the provider, the supplier, the company – not as a consumer. By offering these no-cost ideas, what do they get as a result? Better time management, more interest, better reviews? Starting a buzz, or influencing customers by the ‘fear of missing out’ feeling? Bigger orders, more expensive purchases?  More time spent in the venue, resulting in more money spent too?

Examples of ‘Giveaways’ that you’ve experienced already:

  • Upgrades to tickets – plane or train seats available in First Class or Business Class offered to you in ‘cattle class’. It actually costs nothing more in terms of operation – there are still empty seats on the train! but the customer has a better experience. By experiencing the next level up, next time they travel its likely they will at least consider the higher priced seat.
  • ‘Complimentary drinks’ – a tea or coffee, or a glass of bubbly if the occasion is right, which has been factored into the cost of running the event. They usually available for a limited time too, or limited supply. Free kids meals (or ones that come with toys) are a cost to the provider, yes – but in return for the parents staying longer, spending more on drinks or desserts as Little Squirt is happy.
  • Hotel shower gel – if you’re claiming you’ve never used it, or smuggled it out in your suitcase home, you’re a liar. And a chocolate mint on a pillow reminding you how hard the chambermaid worked on your room whilst you were out sightseeing? They get a tip. 
  • Any competition which ends up in a prize win. Raffles, online entries to competitions, free prize draw etc.
  • Free P & P for orders over X amount

Saving money by giving it away?
It may be – crazy but true! – that they actually save money or resources by giving something away. For example, combining postage means one set of packaging, one person to source and fill the package, one box to track (and less risk of those getting lost in transit) A free plastic toy that has a net cost of pennies added to an existing meal – cornflakes, or fast food – means appealing to the kids, but selling smaller portions of the same stuff the adults eat. Two packages for the same product.

The prize draw to win a brand new car needs a short form to be filled in – “Sure, I’ll hand you my inside leg measurement so I have a 1 in 100,000 chance of winning that shiny new car” (F.O.M.O.?) In return, your business collects my data to contact me again, and again, and again in the future. All planned ahead of time, and costs measured against the costs of the data from a third party, which isn’t tailored exactly to their brand.

Don’t discount the idea of ‘free’, pardon the pun
And I’m not suggesting that you give away all of your business ideas to the next passing person, or all of your product stock to the next customer who walks through your door! Free works, when sticking to a plan! Just because your main competitor is using a freebie or discount, it doesn’t mean you should do the same thing. That’s not competing, its imitating.

Examples of ‘Free’ that you’ve experienced already:

  • Test driving a car (before you buy! Even if it doesn’t result in a sale, the experience is something that will be shared – how fast, how comfortable, how pricey)
  • Free Samples – used a lot in beauty industry, particularly with perfumes and cosmetics. 
  • Entertainment! Reading this post – supported by an online provider for free. In fact, a large portion of internet content is accessed for free.

In contrast to its supposed detriment to self worth  – it feels good to try something different and for it to pay off. If it doesn’t, try something else. Making plans, putting them in action, ticking them off the list and evaluating their impact – the foundations for any small business planning their marketing efforts. Put some effort into imagining your customers perspective, and what they are looking for which isn’t currently available – is what gives your business the edge over its competitors.

Getting most value out of the Free ride
If it isn’t costing your business to deliver the offer, service or promotion, then its a good up-sell or giveaway. Yes of course – cover all costs, pay your bills and give yourself a wage. Customers of all kinds love to feel the value above low prices or no prices, so think in terms of what value can you deliver. Studying your customer patterns gives insights into how you can make their lives more convenient, take up less time, make life easier.

Be reimbursed for the Freebie – or charge another customer
On another note, raising your fees can offer similar appeal to your customers. Can you create a prestige club, a VIP group, a platinum offer – that you will generate more income from per sale? Perhaps this higher level service supplements the financials of the ‘freebie’.

If you did this, in terms of self worth – would you feel like you are doing a better job for this set of customers? I suspect you wouldn’t, and treat all equally to the best of your ability anyway. Better ways of maintaining self worth is seeking support – a local business group, or a mentor, or even a business coach who holds you accountable.

What are your thoughts – Are freebies for dummies? Or can they attract interest?

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