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.