What Does Your Business Give Away
Giving stuff away is nothing new to business owners. Remember S and H Green Stamps, where you collected stamps given away at gas stations with the hope of amassing enough stamps in your booklet for something from their gift catalog? Fast food restaurants have toys for the kids meals, retailers have sales all the time, with some having way too many. Not to mention cereal companies have had free gifts inside since the beginning of time. And, for those of us old enough to remember, there was the famed Cracker Jack “Toy Surprise” inside. That was a pretty big hit for me as a kid, although I didn’t really care for the Cracker Jacks all that much.
Whole business models today are based on free. Chris Anderson of Wired magazine even wrote a book entitled Free: The Future of a Radical Price which examines the rise of pricing models that give products and services to customers for free. In it, he made some startling observations. While some of Anderson’s ideas are radical, it is hard to debate the impact of free today with things like Wikipedia, Facebook and Google, all of which are based on the concept of being free.
Think about Craig Newmark, who single handedly brought the newspaper business to its knees with Craigslist, which is free to use. All it took for the newspaper industry to buckle was a centralized network of online communities featuring free online classified advertisements with sections devoted to jobs, housing, personals, for sale, services, community, gigs, résumés, and discussion forums.
How does the small business owner make sense of the free model?
In the rental business, when apartment operators start to see vacancy rise, the “One Month’s Free Rent” banners go out. Since rental fees are my core business, I have never been a free rent guy. The valuation of free rent in the customers eye evaporates at the lease signing. To a large extent, the same logic applies in retail with a sale everyday. The average sale just isn’t special or noteworthy.
Expanding the shelf life of free
By accident, we at Urbane Apartments stumbled on to something when asking the question, “How can we actually get back value for giving something away?” In our case, we created a non-traditional Co Work Office Space in an underutilized clubhouse for the typical nomad that was working from Starbucks or Panera Bread. Our first thought was to charge for desk space and create a bit of extra income for resident events. What unfolded for us was a whole new corridor of opportunity.
The word about the free co-work space quickly zipped through the local community, and we suddenly had a a group of folks talking about us, tweeting about us, posting pictures on facebook and checking in on Foursquare to see who else was at the space that day. Local civic groups followed up wanting to rent the space for different charity events. The local news stations got wind and did feature stories. The point being, we could not afford the type of local PR we received. And while our newfound evangelists weren’t talking about our apartment rentals directly, we were part of a larger conversation. The overall value to our business was overwhelming.
So think about creative ways that you can expand what you are giving away. Think about what your competitors would give away, then push beyond and find something that might just be more compelling. As we’ve learned, everything free is not created equal.
What has worked for you? What have other businesses given away that has made you take pause and pay attention? Please share in the comments.