You’ve no doubt heard the expression: ‘There is no such thing as a free lunch.’
Consider this: Craigslist, Facebook, Twitter, Google, and Yahoo all provide mostly free services and tools. Yet, they manage to make gobs of money.
Would Google be a smashing success if you had to pay one penny for each search? Doubtful right?
Companies are increasingly offering ‘Freemiums’ as a way to stimulate, reach and hook new customers. Notice the play on words ‘free’ and ‘premium’? Sure companies have been giving away free samples and ‘stuff’ for ages…not a new strategy right? Here is the caveat: Give something away for free that actually has a perceived value.
An early example of the ‘Freemium’ Strategy in action can be traced back to King Gillette, inventor of Gillette disposable razor blades. Gillette tried every marketing scheme and gimmick to sell his blades with no real major success. Then he tried something new: Give away the razor in hopes of selling blades. It worked. By giving away the razor he created demand for blades.
If I told you that you could fly for free you’d be interested right? Some overseas airlines are experimenting with free flights. In exchange, passengers are exposed to advertisements, online gambling, and premium foods. Trials have revealed a better profit opportunity following this ‘Freeium’ Model.
Ok, I get it. But how the heck does this apply to my business and how can I use it to create new clients:
- Develop a loss leader: Wal-Mart sells new DVDs at cost because they know that once they have you in their store you will likely buy other, high profit margin products. Consider offering your clients and prospects a low cost product to stimulate their attention. Ask for referrals, upsell other products and ask them about their other promotional needs.
- Create a Free store: This is assuming you are an Xsite user. The business value to any business of having a custom web store to manage all of their promotional needs is a HUGE deal. Use the super easy store wizard to generate a store for prospect and showoff.
- Gift cards—your Freemium friend: Create gift cards for use on future orders, orders over a certain amount or for special occasions. My wife proved the power of this marketing effort. She feels compelled to head to the mall to ‘take advantage’ of a $25 dollar off ‘gift card’ for purchases over $100. They work.
Free is a powerful marketing call-to-action. Develop your ‘freeconomics’ marketing game plan now!
Make sure to share your freemium success stories!