“Free” has always been a word customers love. Consequently, “free” has always been a very effective marketing tactic when the cost of giving away what you offer is offset by what it costs to acquire the customer.
If you’re a doughnut shop and you give away one doughnut that cost you less than a penny and the customer comes in and buys a cup of coffee for two bucks along with that free doughnut, that’s a pretty hefty return on investment. And it probably costs you a whole lot less per customer than running an ad.
As the world has become more digital and many of the costs of doing business have lowered so dramatically, “free” has become a go-to strategy.
Take, for example, what so many content streaming companies are doing. They offer the first episode or two of a new series for free, then require you to subscribe to their channel in order to see the rest of them. It costs them relatively little to give away that first month of service, and getting a subscriber to pay for just one month of programming beyond that more than pays for that promotion. The longer the subscriber stays around, the more the profitable they become, and the higher the return on investment of that initial free giveaway climbs.
Ideally, the cost of the promotion is offset by the revenue generated on the first sale, and the rest is gravy.
Put a pencil to it and see if you could actually let your potential customers experience a sample of the value you have to offer for free. If it’s really good, they’ll come back and pay for it next time. If they keep coming back and keep paying, you’ve got yourself a nice revenue stream.
If they tell others how happy they are with you, digitally or otherwise, they’re now doing your marketing for you.
For FREE!
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