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John Rose's Blog

The Power of Free

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When it comes to pricing products and services I have always held to the tenet that, whenever possible, it is preferable to give the customer something more for free, than to charge him less.

I espouse this strategy because no matter how much companies try to justify it, the fact is: discounting erodes brand value and loyalty. By marking down the price of your product, even temporarily, you are telling your customer that it is actually worth less than you usually charge for it. And if you regularly or cyclically discount the price, your customer will arrive at a lower fair value for your product that is difficult to reverse. This is especially true for premium brands.

Some brands, and many retailers, consistently condition their customers to adopt an “on-sale” mentality – only making purchases during sales periods. And while I understand that inventory must always be turning, there’s no denying that margins suffer from these practices.

Instead, I recommend that you embrace Reward Marketing.

The concept of Reward Marketing is to provide the customer with an additional incentive to buy a brand without reducing price. If he purchases your product, he will receive something of value for FREE.

“FREE” is among the most powerful weapons we have in our marketing arsenal. A free gift with purchase is generally more enticing than a small discount. In a survey we conducted, more people prefer free rewards over any other incentive. In fact, consumers prefer a free leisure or travel reward approximately 6-1 over prize drawings, 7-1 over cash discounts and, in some cases, 30-1 over merchandise.

You can see the full survey here and you can read more about this in my post: Discounts, Gift-With-Purchase, Prize Drawings or Lifestyle and Travel Rewards? And the winner is…

Of course, the free item you give away has to be compelling. Fortunately, there is a way to give away high value travel, leisure and lifestyle rewards at a low cost via TLC. Click here for more details.


Bottom line: Before you discount your product or service, consider how you might put the power of free to work for your brand.

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