It’s not coincidental I’m posting this today, March 23, when there are two major nationwide giveaways. Of course, free is good for us customers. But getting customers in once when you are giving something away for free is one thing…getting them to come back and pay for it next time is another.
So first, to the free offers. Starbucks is hosting free pastry day at its US and Canada stores. Download the coupon to receive a free pastry until 10:30 a.m. with the purchase of a “handcrafted” beverage. They’re also using the event to promote the other ways in which their pastries are “free” – that would be, free of artificial ingredients.
Ben & Jerry’s is hosting their annual free cone day. Anyone can come in and get a free cone between noon and 8:00 p.m. No coupon or purchase is required (though you can probably guarantee you’ll have to wait in line!). Ben & Jerry’s has been doing this for years – as a thank you to their customers.
The intent is clear – besides the good PR, they’re hoping you’ll like it so much that you’ll come back to pay for more. They’re not the only organizations to try this, of course. Denny’s promoted its second annual free grand slam event during this year’s Super Bowl, and served about 2 million free breakfasts. Airlines have done this for many years – offering free first class upgrades to some customers – hoping they will buy the more expensive seats next time.
But unless there is some way to measure the results of these types of giveaways, it’s hard to know how valuable they are. Of course, they’re valuable to the customer’s taking advantage. But they also need to be of value to the business. If it isn’t, they probably can’t afford to host these events. Denny’s – whose grand slams are $5.99 – spent almost $12 million on the free breakfasts they gave away. That’s about half of 1 per cent of the chain’s annual revenue – and is certainly not chump change.
In addition, if those promoting these types of offers don’t prepare right, the promotions can backfire. Remember KFC, who learned this the hard way? They promoted a free chicken coupon on Oprah that caused pandemonium. With overwhelming demand, lines snaking out the doors of restaurants, and a clear lack of preparation, the chain cancelled the offer, which only earned it terrible PR. KFC eventually relented, giving those with coupons a rain check to redeem it for later dates – but not before the damage was done.
Without reaching a goal, likely bringing in a certain amount of new repeat customers or business, these events can’t work. But with the right preparation and targeting, such a promotion can bring value and repeat buyers while providing customers something they appreciate: free product. Any brand that can achieve this will tell you it’s a great combination.
