Is giving something away FREE, a good idea?

Giving something away, maybe a discount, a bonus offering, or a free service as part of a promotional strategy, is seen by many business owners as a short-term gain, but a long term negative impact on their sales.

If that’s the way you’re thinking, I honestly believe you’re looking at it through the wrong end of the telescope.

The issue is not about giving something away! That’s what we call “Inside Out” Thinking – strategies focussed on product and profit – a short term solution to clear out stock, but invariably a long term strategy to lose money.

Giving something away FREE from the opposite perspective, from an “Outside In” perspective is about creating customers. We’re not holding a sale, but we are focusing on the customer’s need and the most important question to ask is what advantage are we delivering or what need is fulfilled if the customer takes up your free offer?

So, let’s see what happens when you approach the idea of a FREE offer from an Outside In perspective – from a customer’s perspective.

Strong brands are built on knowing your customer better than your competition. That knowledge enables you to deliver a benefit to your customers better than anyone else.

Does the offer of something FREE deliver the brand benefit? Unlikely in its entirety. But what if the FREE offer actually shifts a current negative in the mind of the customer towards your product or service? What if that FREE component heightens the level of satisfaction the customer is going to get? Or, what if that FREE offer actually persuades someone to trial what you are offering?

Stop thinking profit. Stop thinking that giving something away diminishes or demeans your offering. Stop thinking like a retailer offering a perpetual sale and start thinking like someone committed to building brand loyalty. Start thinking like someone who is committed to creating new customers.

The first thing to consider when building brand loyalty is how do I gain TRUST, specifically my customer’s or, more to the point, my prospect’s trust? What does the customer think of my brand, compared to the competition? How does a potential customer see my brand, compared with the competition?  Do I know the answer to those questions? If not, how can I find out?

Now you’re thinking like someone intent on building a strong brand, from an Outside In perspective. That person never stops asking questions. The more you know about your customers, and the more you know about your competitor’s customers, the stronger your capacity to deliver on those complex set of satisfactions that are the true indicator of a powerful brand.

The problem with the discounted price, with the perpetual sale, with the special offers that include the bonus bottle of dishwashing liquid is that they are driven by motivations of profit and turnover. I have to get rid of this stock, I need to reach my monthly target. Inside Out thinking, product driven thinking. Not brand driven.

Remember, the point here is to strategise how you shift or change an attitude that your prospect has about your product or service. It may involve giving them something for nothing, but the decision is made on the basis of resolving a customer need, not to simply clear the shelves.

And, if you still keep coming back to the question, why would I give something away that I can rightly charge for, then I fear you will never make the transition to “Outside In”.

From a customer perspective the “Outside In answer” might be as simple as recognising that their level of trust in your competitor’s product or service is long held, hard to break, so how will you persuade them to give you a go? Perhaps the only way is to provide them with a trial, or a FREE bonus, or perhaps a simple demonstration of why your offering is better, even if that demonstration costs you a few dollars in either time or money.

The outcome of “Outside In thinking” is that TRUST builds LOYALTY. Loyalty is the bedrock of brands. People who trust you come back. They’re repeat customers. Price might be a factor, but it won’t be the only thing driving them, they trust you to deliver on their complex set of satisfactions.

Allan Bonsall, Brand Strategist,
The Lookinglass.





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