May 18-May 22, 2020
a look back at this week’s essays…
Free Is a Bad Idea, Part 1: Free Offers in Business
After many years of mulling it over, I’ve come to the conclusion that giving away things for free is a bad idea. I’m sure that statement will sound odd or even idiotic to many people, but give me a chance to make my case.
Click here to read more.
Free Is a Bad Idea, Part 2: Free Offers in Charity
I know more about making money than I do about giving it away. But I’ve been inclined toward charitable giving all my life, and have been actively involved in running a charitable foundation for the last 20 years. So while I don’t pretend to be an authority on the subject, I’ve come to several conclusions about what works and what doesn’t.
Click here to read more.
Living in Fear of the Fear of COVID-19
[My friends/family agree with me] on one thing: The Trump administration bungled its response to the threat. But [they] think the mistake was in implementing mass quarantines too late. I think the mistake was in implementing them in the first place.
Click here to read more.
- How much do you remember about this week’s “Words to the Wise”? Use each of these words in a sentence:
* eschew (5/18/20)
* cosset (5/20/20)
* insinuate (5/22/20)
- Fill in the blanks in this week’s quotations:
* “All _____ is basically about customers and marketing and making money and capitalism and winning and promoting it and having something someone really wants.” – Roger Ailes (5/18/20)
* “Too many have dispensed with _____ in order to practice charity.” – Albert Camus (5/20/20)
* “Those who would give up essential _____, to purchase a little temporary _____, deserve neither _____ nor _____.” – Ben Franklin (5/22/20)
- Are these statements True or False?
* Abraham Lincoln imposed the first federal income tax to help pay the debts of the Civil War. (5/18/20)
* Leonor Fini, an artist in her own right, was married to Salvador Dali. (5/20/20)
* According to medical historians, there are basically two ways that pandemics end. One is when death rates plummet. The other is when fear about the disease wanes. (5/22/20)
recommended links from this week’s blog
* “When Mask-Wearing Rules Faced Resistance” – an interesting account, on History.com, of the use of face masks during the 1918 “Spanish” Flu pandemic. To read it, click here.
* In the mood for a little fun? Try this…
* Here is one of Leonor Fini’s paintings – called “Rasch, rasch, rasch…” – featured in one of Christie’s online publications.
* I was fascinated by this video explanation about how COVID-19 patients die. To watch the video, click here.
* “How One Man Circumnavigated the World By Car” – Amazing story! Here
* “The history of our world in 18 minutes” – an interesting TED Talk by David Christian. To watch it, click here.
* Jeff Allen: “My America” Here
I stumbled upon your article on not giving away things for free, which I enjoyed. Although, the one exception that came to mind was giving away free food samples in the mall at the food court. It’s worked on me where I tried something I never ate before, liked it, and then went to the restaurant several hundred times over the course of a few years. (I eat lunch at the mall frequently… or at least I used to.)
Is this a valid exception?
Like all rules, there are exceptions.
Costco, the mega-commodity store, gives away free samples every day. I don’t have to research Costco to know that this works for them. The fact that they’ve been doing it for so many years tells me that.
But it may not be working the way you think.
My guess is that their giveaway program doesn’t generally produce direct sales – so I’m speculating that the main reason Costco offers samples is that it is appreciated by their customers. Their marketing execs have learned from surveys that it is considered to be one of the primary benefits of being a Costco customer. I also suspect that the sampling gives them a lot of valuable information about their customers’ buying preferences.
The same is no doubt true for department stores that give away perfume and cosmetic samples. I could give you other examples, but you get the point.
Here’s the thing: Sampling almost never works for acquiring new customers.
I don’t expect you to take my word for that. I’m going to be writing more about it in the next few weeks. In the meantime, I’m going to make a statement and then leave you with something to chew over.
Giving away free things is not a good way to acquire new customers for all the reasons I enumerated in my “Free Is a Bad Idea” essay on Monday.
When you give away something for free, you are not making a sale. At best, you are acquiring a potential target. And there is a big difference between the two.
All the magic happens in business when the sale is made. How that sale is made determines how profitable the relationship will be for both the customer and the business. To acquire the kind of customers you need to grow a business, you have to design a strategy that will sell the product at full price. Until you’ve done that, you haven’t done anything that matters.
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For a look back at the stock market, click here.