I'm appearing on CNBC tonight (actually not sure yet whether it's airing or just taping tonight, will update). Possible topic: Does FREE work as a marketing tool? I posed the question on Facebook and the thread caught fire immediately - thought I'd continue the convo over here. A HUGE thanks to all who responded - so much cool insight, so fast. I'll post some of my thoughts later.
For now, some of the responses:
I think it depends on what it is you are selling. Free helps to build relationships with customers for a small business person. I am not sure I am convinced that it is so effective with a mass product like M &M's but then, that's not my area of expertise
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In any interaction, there is always an exchange of value. You teach that it's important to help everyone out, and to ask people for favors. Even in that interaction, there is an exchange of value e.g., I feel great when I help someone else. So even if you're giving something away for free (e.g. my time), the exchange of value creates an ROI.
With... Read More a product, it is the same. For example, if I give away an ebook, I might ask for the person to register. The name is the value I receive. If I just give it away with no registration, I'm hoping that it is forwarded and my brand and reputation expands.
In the M&Ms example, if I think my product has an inherent differentiation versus competition, I might give it away because people will try it once for free, and if they like it, they will buy in the future. Of course that is only true if the product is better than the competition. If it is not better, then there is low or no ROI.
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Keith, it depends what is actually being given away. For instance, if I am in consulting I might offer a bit of free advice to help grow the relationship. But, if I have a hard physical product - I'd have to be pretty darn certain that what I was giving away gave some measurable ROI.
We utilize free drawings in our live fishing bait business - ... Read Moreand it helps build targeted mailing lists. This works for us. But I know the industry - and understand that fishermen will almost always sign up for a raffle. So, I think understanding your audience/market is supremely important!
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To boil these answers down: Yes, as a free sample, like businesses have done forever.
As a permanent state, some kind of open source barn raising that also generates wealth? No.
As we say of so many sectors these days, What were they thinking?
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Free works to stimulate interest in a product or service. But there must be real and/or perceived value for the provider to make money. The only "free" distribution model that works is supported by advertising, which just means the value of the product or service is elsewhere, i.e., a forum for influencing an audience's buying habits as opposed to a forum for providing information.
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Nope - "free" I've found doesn't work as a marketing tool as a small biz owner. Folks want to know they are investing in something valuable - if you are giving it away for free - then they thing well how valuable is that product? Energy must always be exchanged for energy - in nature and in biz
I think the concept works in the sense that you have to demonstrate value before you ask for money. Call it "free" or "a sales sample" or "a demonstration". With some products and services the value is clear and "free" is not necessary.
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Must be real value, targeted to a specific buyer persona. Watching TV last night I realized I am beyond jaded when it comes to mass advertising. I will do the opposite of what an advertiser is pushing at me. And I am not alone!
What do YOU think?
