I am writing this post from the perspective of a marketeer. This post would not exist if I was simply writing from the perspective of a consumer.
I tweet. Or twitt. Or whatever. Recently, a friend told me that he follows Sprinkles Cupcakes (@sprinkles) because they give away FREE CUPCAKES to the first 25-50 people to whisper the word they tell you to whisper. Mallory, as a consumer, really likes this idea, so she started to follow Sprinkles as well. I understand the logic. If you give away free products, they will realize how great the product is and will then purchase the product at a different point in time. Or, they will come in to the store for the free product and then buy additional items/services. I get it.
BUT, they’re doing it every day.
If I go in for the free product today and remember how much I love said product, I may go in tomorrow to get another one. The problem is that I can get the product for free tomorrow, too. The cupcakes (which are simply delightful) are $4 each. The reason I don’t regularly purchase the product is not because I forget how great they are – it’s because I shouldn’t be buying $4 cupcakes regularly (and I probably shouldn’t be consuming big cupcakes every day but that’s a different topic).
They’ve solved my problem but they’ve created their own problem. As a consumer, my mindset has shifted. I will probably never feel totally right about paying for the $4 cupcake because I know that if I check Twitter, I can get a free cupcake today. If the “free cupcake” giveaway happened once a week then I would buck up and pay the $4 if I really wanted the cupcake today.
Mallory, as a consumer, wants all Sprinkles employees to know that she loves you and hopes you continue to do the promotion that probably, in the end, isn’t a great idea.
thinks Mallory the marketeer should shut her mouth and eat a carrot cake one for me!
There’s a similar trend emerging in video games right now with free-to-play games. The idea is that you release a game people can play for free, hoping a lot more people will try it out. One way the game can generate money is through small in-game purchases where people pay real money for items in the game. Like a new shirt for their character. There are other pretty creative ways to charge people for some additional content in a free game, but small purchases seem to be one of the most common.
The general consensus is that about 10% of players end up spending some amount of money in a free game. I’m not sure how accurate that is since companies don’t readily release their sales figures.
Like you mentioned with the cupcakes, I’m a little worried that people will get used to playing for free games and won’t ever have incentive to buy new games. As a game developer, I’m really concerned about this.
It seems like you could be successful giving things away for free if you keep the costs of those freebies low. If the cupcake costs 10 cents to make then giving away 25 isn’t bad. But if it costs Sprinkles $3.50 then it starts to add up. Offering video games for free is much a larger risk with development costs commonly in the 10s of millions of dollars.
So it’s an interesting idea, but I’m not sure yet whether it’s a long term trend or just a fad.