I recently saw an advert featuring a fairly common promotion; The "free" gift.
The "freebie" is normally of little relative value, but is a simple way for a sales manager to ignore that they're cutting into profits to attract shallow customers.
This particular promotion involved the purchase of a mobile phone (a commodity item). The promotional bonus was available with the purchase of many phones and contracts:
It was An X-Box 360.
Lets do the math;
Xbox 360 wholesale: $550
Revenue from phone contract : $30 per month over 24 months: $720
The phone company is willing to invest over 75% of the potential income from a customer, simply in order to gain that customer.
What does an advert like this tell the customer about the company?
I'll tell you.
The average person simply thinks "That company is making too much money.."
"..from me."
Yes, the average person - on being shown a fantastic, too-good-to-be-true deal, thinks they're being ripped off, and takes their business elsewhere.
Such give-aways are a giant flashing neon sign to customers that you - as a company - are making a disproportionate profit on the deal.
A customer is looking for one of two things; The best quality, or the best price. Focus on one of those two experiences, not on freebies.
3 comments:
Surely there's a line, though. If they were offering a free car then nobody would even think twice about it. Yeah, maybe the company's making too much money, but why should I care if I'm getting such a bonus myself? I guess that the company saw the XBox as being on that side of the line, that's all.
Come to think of it: it makes more sense to give away the phone for free with the XBox. They probably would have done much better to have made the deal with XBox and had the offer going the other way. Only that might have made the opposite impression: this company's getting desperate.
If you're going to end up with no sales, you might as well look rich and successful while you're doing so. Nobody likes a loser.
Except God.
God laughs at losers.
Sean, I think I have read your entire blog now (okay, possibly there are some kind of archived items which I haven't managed to find or something, but hey, my motivation level is already not the highest) and I have come to the conclusion that you are a bitter person who likes technology more than he likes people. I think that explains quite a lot, now that I come to think about it. Like Natalie. She's just like a palm pilot. Small, accessible, convenient to carry around, and a euphemism for "a person who masturbates a lot". I think I should probably stop insulting you and all you hold dear now. But it's been fun.
I have a grammar problem. Should that have been "You are a bitter person who likes technology more than you like people"? "A bitter person who like technology more than you like people"? "A bitter batter gotter pick a pocket or two, you've ... gottopickapocketortwo!"
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