The FIRST Most Important Word In Advertising:
By Rich Harshaw
Do you know what the most important word in advertising is? The word, as you've probably guessed, is FREE. No other word can generate as much action as Free. No other word can break down the walls and eliminate the Confidence Gap like the word free. And on the other hand, no word is more over-used and under-potentialized as the word FREE. Often, consumers become jaded when they find out that the wonderful FREE (whatever) is really worthless, nonexistent, based on unrealistic conditions, cheesy, stupid, or just plain NOT FREE in the first place.
So what I want to help you do is find ways to use FREE and make a favorable impression with your prospects and customers...and make them want to do more FULL PRICE business with you. After all, any idiot can give stuff away for free or at a discounted price. A monkey can give stuff away for free. It takes a skilled advertising practitioner, however, to properly use FREE and still make a full profit.
Let me give you a couple examples of effectively using the word FREE; a high-end carpet & rug showroom, and a cardiologist group. First, the cardiology group. They make money by performing procedures on patients that are referred from other, less specialized physicians. The key then to maximizing profits, is to have as many physicians as possible referring patients to their group. The office manager of the referring physician often makes the decision on where to send their patients for cardiology. They had to influence the office manager to choose them over all the competitors? And how does FREE fit into all of this?
First of all, they produced a video that explains their selling advantages. It builds a case and is well articulated. So how about sending a FREE video out to all the office managers of all the doctor's offices? That might be a good free offer, right? Only problem is, it won't work. Almost none of the office managers have a VCR at the office, and they sure as heck ain't taking that thing home to waste their valuable personal time to learn about some cardiologist group. There's a better way. And that is to take the FREE offer to a much higher level...a level that inspires action. They took the same free video that would have very little impact if mailed by itself, and then we went to Blockbuster Video and Boston Market and bought gift certificates from both places. Then they sent the video and gift certificates to each of the office managers with a simple, short letter:
Dear Office Manager,
I know that you get solicitations all the time from all types of doctors, pharmaceutical companies, and medical supply vendors. I, too, am trying to gain your interest in doing business with our company. But, instead of wasting your time with the usual office visit and literature, I've arranged for you to spend a relaxing evening at your home. Please accept these coupons for two free movies and $15 worth of food. When you get a chance to use these coupons, all I ask is that you do me one small favor: either between movies, or after the kids have gone to sleep, please pop this short 9 minute video in an see what we're all about. Thanks for your time.
What do you think is the chance of that video getting watched? Just about 100%. What kind of impact does it have on the prospect? Highly favorable. This approach sure makes follow-up easier, too. Instead of the usual follow-up call "We sent you a video, did you watch it yet?" they now say "Have you had a chance to use those free coupons yet?" Whether they have or haven't, the reaction is always favorable. This approach directly leads to more business.
One other company that copied this idea was a large video duplication house that was gunning for some huge accounts. As you can imagine, the purchasing agents for large accounts are always getting bombarded by requests for sales presentations and all kinds mail, telephone calls and emails. So this man used the same short letter almost verbatim and sent it with the video coupons and restaurant vouchers. The result? An unexpected and unbelievable 75% response on his targeted mailing. 75%! That's the power of the FREE offer.
Here is another example; this time about the upscale carpet and rug showroom. Since they rely on interior designers for a large percentage of their business, they wanted to find a way to make themselves "a better deal" for designers. They also wanted to find a way to compete for retail customers with the emerging do-it-yourself carpet places like Home Depot. The FREE strategies for both situations, designers & retail buyers, are good examples of how to maximize FREE-ness without losing profitability.
For the retail buyers, we came up with a program that gives them FREE carpet cleaning for a year with the purchase of carpet or rugs. How could they do that without going broke? They made an arrangement with a carpet cleaning company that already spends a ton of money on advertising in Val-Pak, Yellow Pages, and other expensive media. Their advertising cost to acquire a new customer, we found, was actually pretty high. So they made a deal with them to give them a discount equal to (actually greater than) the amount they spent on advertising. This was roughly half of the sales price. When the customer buys carpeting, they get vouchers good for two free carpet cleanings (year's worth) that are dated and signed. When they actually redeem the coupons, the carpet cleaning company the company half the face value.
Since their average standard job runs about $70 (special treatments are extra and not included), the out of pocket cost is about $70. But it's actually less since not all of the customers will take them up on two cleanings. Now look at the math. If a customer buys 200 yards of carpet for $18/yard, that is a $3,600 job. There's plenty of room in there to cover the measly $70 cost of the program. And by just offering FREE carpet cleaning in the first place, the advertisements bring in more sales. How could the ads NOT bring in more sales with that offer? --If the price for one brand carpet is exactly the same at two different places, but one store says they'll clean it for you for a year, where are you going to buy?
Now, the FREE offer for the designers: In addition to offering them FREE carpet cleaning that they can pass on to their end users, they company also created the "Designer Club." Membership in this club entitles the designer to a myriad of FREE benefits, including FREE office space (including FREE use of copiers, phones, computer, fax machines, etc.), FREE use of the conference room and showroom, FREE drinks, coffee, and snacks at any time, an additional 50% discount not available to non-members, FREE credit union and insurance plan enrollment, MASSIVE DISCOUNTS on travel, couriers, dining, rental cars, health club memberships, and about 17 other things. The designers are also enrolled in and incentive program that allows them to earn points for purchases that they can cash in for expensive prizes.
What does it cost a designer to join this "Designer Club?" About $200 a year. But, if they hurry, they can get one of 100 Charter Memberships for FREE...if they meet certain requirements. This program will cost very little to implement, but will have massive rewards for the company. There is no other showroom that even offers one of the FREE benefits.
There are many more examples of how FREE has helped other companies. I'd like how a restaurant had a FREE drawing that increased its business by 22% for four consecutive months. Like how a tuxedo chain gave away a FREE dozen roses to prom-goers, but didn't have to pay a dime to do it. Or how a well-known piano store packaged $2,005 of FREE stuff to give away with every piano. Or how an offer for a FREE seminar helped a franchising company to do over $10 million in sales last year. There are too many to cover in detail.
But think about ways you can integrate free into the way you do business, and into your advertising. It's the best risk lowering strategy there is, and it's bound to bring you more business...more than enough to offset whatever it costs to administer the FREE stuff. If you have any questions about how to integrate FREE into your business, please fill out our FREE RESOURCE REQUEST.
© 2005 Rich Harshaw ∙ May Not Be Used Without Permission
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