A reoccurring resistance from business owners is that they are afraid of leveraging strong offers like free. But if you are confident in your product, and are convinced that you will get repeat customers once they have discovered your business, then the up-sell far outweighs the expense and the few people that will take advantage of your offer and never spend another cent with you. The cost of what you give away is small in comparison with the upsurge in business that results. Just consider it marketing money; you are taking money away from advertising or another campaign that doesn’t work and putting it to something that does. As with everything, try it, test it and look at the average uptake and overall cost (not the one person who came in and didn’t buy anything else, but the 5 people who came in accompanied by their friends, AND will keep coming back.). If your numbers are up because of the activity, then keep it.
Let me tell you about a simple, but incredibly effective campaign carried out by an Italian Ice shop at a beach resort that I frequent that shows the power of ‘FREE’. I was on the village trolley with my two young children while on our annual beach holiday. While getting off the tram the driver handed us a coupon for a free Italian Ice at a place up the road (I came to find out later that the trolley driver was told to give the coupons out to families. What was in it for the trolley company? They were able to put advertisements about their trolleys at the Italian Ice shops). Now, these coupons were for a free Italian ice at any time. Not one free with a purchase or after midnight or when accompanied by four other people, or any other complicated criteria. Just a free Italian Ice if you came into the shop. Although I’m not much of a fan of Italian Ice, I couldn’t resist something free, and off we went to make a special effort to find the Italian Ice shop (which by the way, was off the main drag, so they did have to do some good marketing to compete). Well, not only did we end up buying a few other items (now that they had us on their floor space, they had a better chance of selling us something), but we so liked the Italian Ice that we went back several times, and now their Italian Ice has become a summer tradition for us.
If we do the maths, wouldn’t you say that acquiring a family of loyal customers was worth 2 free Italian Ice’s that probably cost them less than $1.00 to produce? The manager confirmed that the campaign was highly successful and that their revenue had increased that month because of this marketing activity. This was simple, clever and inexpensive marketing that was very effective.
Use free offers to touch a new market. Put postcard offers on the windshields of cars parked in an industrial zone to introduce your lunchtime massages to local business people or hand out samples of your wares. Get creative and entice people to try your outstanding establishment. You yourself know that once they have tried it they’ll be back.
The best way to encourage people to act is to remove the risk and give them something to try. Remember the power of FREE.
– excerpt from Win Win Marketing