Does Free Work For You?

We are now in the age of free. Free Big Macs, Free KFC grilled chicken, free ruby pendants (while supply lasts) from Stauer. My email from them had the banner ad in the email: Buy NONE get ONE.

Those who thought up the campaigns are no doubt high fiving each other because Americans will stand in line for quite a while for something free. And that free day’s test results will look awesome. But how effective is the marketing in elevating business long-term?

In the months following the terrorist attack of 9/11 auto manufacturers needed to stimulate their sales so they offered zero-percent financing, and yes car sales increased. But something else happened. Car buyers know a good deal when they see one, and why pay for financing when you can get it for free? So auto manufacturers became locked into the concept of zero percent financing but they had to figure out other ways to still make money, so the gamesmanship began, but a savvy public wasn't buying because they knew it was no longer the deal it used to be.

Free samples have always been a good idea to test market products and get people familiar with what you are offering, but it also can devalue the product if you give too much away for free. How good can a free ruby pendant be? You know that was your first thought when you read that.

Deep discounting sets a new price in the customer's mind. Will you ever be satisfied paying more than $5 for a foot long sub again? Are newspapers dying off because they no longer are capable of reporting on the news, or is it because they began to give it away free on the Internet? When Costco gives away a cracker with lobster spread on it, it is a sample. When they give away an entire container of the spread it's devaluing the product.

Free is a slippery slope that only works if there is a payoff of more loyal customers down the road. Denny's had people lined up in the parking lot for their free breakfast day where they estimated 2 million people participated. Have you seen a line since then?

Know your market and when you offer something for free, be sure there are lasting returns and you aren't just the freebie of the day.

If you want FREE to work for you:

1. Make sure it is a tease opportunity to sample something you want customers to buy later. Giving the full product away devalues the product, unless it is in scarcity like a lottery winner.

2. Monitor the traffic or sales of the free product to see how your actual sales were truly impacted. Just because they now know you doesn't necessarily mean they are buying from you. The Taco Bell dog was recognized as their brand over 95% of the time, but those ads showed no bump in sales.

3. Free is a great way to get your name out on new products or as a new entity, but you have to have a strategy in place of where free will lead to profits within a specific time frame. After all, you are running a for-profit business.

Get a Hammer and Beat Your Head with It

Customers are probably the most informed, savvy and intolerant of BS than customers have ever been in the history of customers! So why are most companies taking the same products and giving them different names to try to appeal to the current times. You should be ashamed.

This year's car is the same as last year's car. The big development in your beer product is the can turned blue when it's cold -- as if I couldn't tell it was cold by touching the can! The discount you used to give all the time is now the "stimulus discount." Why doncha just get a hammer and beat yourself over the head if that is the best you can come up with.

Come on people. If you want customers you need to act like it. Hundreds of companies all over this country are having great years financially. Many of my clients are showing significant growth this year, the year of recession, depression, and suppression.

So what gives?

Where are your new products and new delivery systems that will get the cynical consumer to sit up and take notice and say to themselves, "I gotta have one of those!"

Do you think a car with 100 MPG capability is going to get the consumers attention when gas stays at the $4 a gallon mark? Do you think the technology exists to make that a reality? Count on it.

Where is the WOW in your products and services? Where is the WOW in your marketing? Where is the WOW in your approach to kicking the competition's ass?

Consumers have very high expectations and feel they have seen it all. Why else do amateur YouTube videos go viral into the millions? Because people want to see something they haven't seen before. They want something that reaches them. They want to be inspired.

What are you doing to inspire your customers with products and services that hit them where they live? That speaks to them? That makes them want to but it right away?

Try this question on for size:

What products do you offer that customers are demanding to own? The products they will eagerly wait in line to get?

If you don't have this -- you need it. If you can't think of what that could be -- find someone who can. If you want to dominate your marketplace, grow your business and have customers demanding your product you need to get off your ass and THINK what would it take to make that happen?!

Cash for Clunkers did it. Concert tickets do it. Every Christmas there is a toy that does it. Now what are you going to do about it?

Are Your Customers Using the Cloak of Invisibility?

This year many business owners and executives feel as if their customers all borrowed Harry Potter's Invisibility Cloak because they simply have disappeared. Were you expecting that to happen when you looked forward from 9 months ago? Did you think about how your market was going to shift? Are you prepared for the shift in the marketplace that will happen in another 9 months?

Because we have become such short-sighted in our planning and reporting and we feel the marketplace is changing too fast for us to keep up, executives are being reactive instead of being proactive. Leadership of growing companies need to constantly be looking for the pulse of the customer. What are they craving, what will they be craving in 12 months, what can we offer them they will love but don't even realize they want it?

Did you know you needed an MP3 player before one existed? Did we realize that cell phones were a necessary personal item? Did we even realize back in the day we would need highly interactive websites before we even knew the Internet existed?

Customer choices are driven by what they want and what they think they want. Right now customers want value, personal selling, and low cost. When the credit crisis hit last September and it appeared the American market was in dire straits did you gather your executives to talk about what consumer behavior was going to look like in 12 months? I think most executives were sharing in the panic of looking for survival and getting through current times. Imagine, if you spent the right amount of time to predict where consumers would be right now how much better you would be positioned?

The reason customers are disappearing is because no one was ready for this moment in time. What if GM had decided in January to offer a "Cash for Clunkers" program as a way if stimulating growth? The response has been overwhelming. Could they have saved the company from going into bankruptcy instead of their feeble attempt of begging for money in Washington?

To look forward and predict your marketplace in 12 months you need to be asking the following questions:

1. How will my customer buying behaviors be different than they are today?
2. What are the desired product characteristics that will speak to my customer then?
3. What could I create that would tilt the marketplace in my favor?
4. What type of permission marketing approach will reach my customers at that time?
5. How can I create more nimbleness in my organization to make changes fast enough to stay in front of customer demands and expectations?

By spending time on these questions for the coming year, you will engage in creating predictability through your research and proactive choices. We learn from our hits and our misses, but we have to take action. To please an every changing customer marketplace we have to anticipate those needs before they arrive and create accurate predictions that will guide important decisions for growth.