Pelland Blog

Give Things Away and Increase Your Profits

August 10th, 2012

I have been reading (and highly recommend) the book “Free: How Today’s Smartest Businesses Profit by Giving Something for Nothing” by Chris Anderson, the editor of Wired Magazine. Despite mixed reviews and charges of plagiarism, I am a fan of both the book and the concept that it promotes. Practicing what it preaches, there is a FREE audio version of the book that can be obtained online (285MB). Using many historic marketing examples (such as the way that demand was created for Jell-O at the turn of the century through the distribution of recipe books that told people how they could use this new dessert), as well as current examples (such as how Google concentrates on providing dozens of free services that help to enhance their branding and insure that theirs is the – highly profitable – search engine of choice), the book presents a convincing argument for embracing the concept of businesses giving products or services away for free.

To be effective, what a business gives away must have genuine value.

Ideally, it will be something that the business’ competitors are not offering for free … or perhaps not even offering at any price. Some of my favorite local spots for breakfast offer pure maple syrup to accompany pancakes and similar breakfast entrees, while other restaurants (and even many upscale hotels) do not even have pure maple syrup available at a price. Guess which restaurants I patronize when going out for breakfast or brunch! Pure maple syrup is not inexpensive; however, it builds loyalty and introduces many people to a product that might be a new culinary experience. If the sugarhouse that supplies the product is named on the menu or a label on the container, they might very well realize a new source of business.

For another example, Lake Compounce – a popular family theme park in Connecticut – has offered its guests unlimited Pepsi-Cola products for several years now. That fact is promoted in all of the park’s advertising, and the products are probably provided to the park by Pepsi at either no charge or a serious discount in exchange for the promotional opportunities (and the fact that rival Coca-Cola products are probably not sold at the park.)

Everybody wins.

Consumers are getting something for free, the business benefits, and in many instances another business enjoys indirect benefits through cross-promotional opportunities.

Do your competitors charge for parking? Differentiate your business by offering free parking. It can be as simple as that! Since my company works with a large number of family campgrounds, let me start a list of suggestions for how campgrounds might profit by giving things away for free.

  • Give away a free round of mini golf on Friday night. If campers enjoy the course, the are likely to return for paid play on Saturday. They are also likely to tell other campers how much they enjoyed the game, increasing paid usage by other guests. Casinos have been doing this for years, giving new guests free plays to get them using the slots.
  • Do you have paddleboats or canoe rentals? They are not earning any income when they are tied up to you dock. If they are sitting unused early on a Saturday afternoon, offer free half-hour rentals on a first-come, first-served reservation basis during a limited time period. People who enjoy using your boats will likely pay to use them again. Other people will see campers out on your lake and may decide to give it a try themselves, making this almost a form of free advertising.
  • Offer your guests free wi-fi. This is pretty widely available these days, putting a campground that charges for its wi-fi service at a competitive disadvantage.
  • Offer free coffee in your store between specific hours in the morning. Guess what? Those people who come in for the free coffee will usually purchase other items. How about displaying the donuts and pastries right next to the free coffee, or offering premium blends and other beverages at full price?
  • Does your store sell postcards? Why not give them away for free? A postcard typically includes an indirect testimonial – “Having a great time at XYZ Campground. Wish you were here!” – and is sent to friends or relatives who may also be campers. I would even supply the stamps for free!

What are your own ideas for how you can profit from free? As always, the only limits are your imagination and your desire to grow your business!

This post was written by Peter Pelland