Early on in my professional career I learned that promotions and discounting are a slippery slope. The moment you run something like a 20% Off or anything like that you’re starting to let people know that you’re willing to do it. And if they know that they will smartly be patient in waiting for the promos to come back around again.
At that point you might as well just change your prices.
And some companies have done just that. They kind of look at the promotions they run as the product. Certain people like the thrill of chasing different promotions and things like that. So companies build discounts into their product and marketing strategy and it can be successful.
But that’s usually the choice you have to make even the first time you offer a discount on your product or service. You have to decide if it’s a long-term thing.
But what about free?
It’s a little weird, but something that seems to work well for a promotion is to give your product or service away for free.
Obviously there are some specific ways to do it…
If you’re a brand new business, it can be good to just give away free samples to the first few customers. They typically know that you’re new and looking for attention. They know that it won’t always be free. The value is understood and you can go to normal pricing later without much issue.
Maybe you’ve been in business for awhile and you’re changing something up or offering something new. You could offer it for free to the first few that are interested. Again, it’s typically understood that the free idea won’t be around for long and that normal pricing will take effect.
Perhaps you are expanding into a new area. Offering the service for free makes sense because you’re almost acting like a new business in the new area.
Another thing that free has going for it is that you get really good spend compared to things like advertising. Say you have a service that you charge $1,000 for from customers. To you it may be a cost of $300 or whatever. So from your customer’s point of view they are getting $1,000 in value on a free trial or free offer or whatever. But to you it’s only costing $300.
If you’re doing something like advertising you’re going to spend whatever, $1,000, $300, etc. The price is the price. They’re obviously different, but in both situations you’re looking for new customers. Giving away what you’re selling for free is a pretty good return compared to a lot of things.
Be careful with any discounting you do with your products and services. They can provide a little short-term benefit, but they can really do some crazy things with your brand and customers. Customers are smart. If they see something they remember. A better option might be to look for ways you can give away your product or service to generate new business.