Why You Should Just Give It Away

By: Dan Kennedy on: June 28th, 2010 7 Comments

In the last post, My Recent Revelation, I talked about the importance of courage in small business marketing. I used as an example a story that Murray Raphel wrote about in his book ‘Would Saks Do It,’ where he tells of creating a restaurant business by giving away no strings attached free lunch.

Yes it sure would cost a lot of money for a restaurant to give away a thousand free lunches in a week. Maybe four or five thousand dollars but if that free lunch is really, really good and hundreds of those people convert to regular customers I can assure you that the customer acquisition cost is much lower with that method than through most other advertising approaches.

Any business could steal this idea. Darn few ever will. No guts, no glory.

Now, Let me tell you about a supermarket that stole this idea. For their new location in a new neighborhood they gave away 5,000 quarts of milk, 5,000 pounds of butter, 5,000 cans of peaches and 5,000 packages of napkins.

How could any business afford to do this? This supermarket printed up 5,000 coupon books, each with four coupons – one for the free quart of milk in week number one, one for the free butter in week number two, etc. No purchase was required to redeem the coupons. No strings attached. That’s courage.

They mailed these coupon books to 5,000 selected families near the store’s location. Over 3,000 coupons were redeemed the first week. Nearly 4,000 by the fourth week. Almost every person also bought groceries while they were there.

The fifth week with no coupons and also no newspaper advertising, no radio advertising, no TV advertising, no billboard advertising, over 4,000 people shopped in that supermarket spending a total of more than a half million dollars that week.

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    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    7 Responses

    1. M.J. Love says:

      I think all business should do that. Giving away free stuff is one way of directing and informing your potential clients to your great product(s).

      M.J. Love
      Wedding & Portrait Photographer

    2. Scott says:

      selected list is the key word there. Don’t give it away to just anybody.

    3. Fantastic, simple, courageous marketing. Thank you for sharing, Dan.

    4. Rob Anspach says:

      You’ll be surprised at how much money you can make if your purpose is to educate and inform first and not focus on making a sale!

      Offering something free builds reciprocity and strong relationships.

    5. Charles Ra says:

      the importance of courage in small business marketing.

    6. Laura Jones says:

      Giving away free stuff is a good idea until you have that few that take advantage of this type of promotion. I know that there are more customers out there that will not take advantage and these are the ones that will potentially become repeat customers. You might want to put up some kind of safeguards that will keep the advantage takers out.
      Sorry everyone if this doesn’t make sense, I am new to this, trying to learn my way around.

    7. Great point, Scott. Another key is that the promotion was very smartly and strategically planned and implemented — not just a one-time giveaway with no follow-up, as many business owners do who then claim “That was a bad idea.” No, it is a super idea, unfortunately just poorly executed in many cases…

      Laura: Yes, a few people will “take advantage” of any offer/guarantee. Smart marketers don’t use that as an excuse not to run the promotion — we just factor that into the overall cost of the promotion. Remember: Courage is the key.

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