Saturday, May 26, 2007

On Freebies...

Heres some research, via Businesspundit

There is no free lunch in company giveaways of sandwiches, airline flights, hotel stays and other goodies. That's because there is a significant risk that the so-called "future rewards" will diminish in value when claimed - or the business might not last long enough to hand out the goodies, a new University of Florida study finds...

Interestingly in India low cost airlines have been falling over each other trying to offer free tickets. The IEB analyzed this sometime back...

Now we have Rcom trying the great free rope trick. This time it is offering free outgoing calls to select areas within its network.

Great marketing idea to get people into the fold, but very soon it has to be Freemium. Offering something free cannot be a sustainable business model, ever. It is one thing to get in customers, but customers who walk in for free, will not stay for paid, unless their experience with your free service is "amazingly good" that they like to pay for it the next time.

Thoughts?

2 comments:

Kavi said...

Give them Free
Hook them
Charge them
Milk them
Untill someone else starts offering..

give them free..

ankurg said...

Freebies normally are mode to attract a customer for once to try the service/product. It has to be complemented with good service/product to convert the customer as a long term customer. There is no other way out because there are enough freebie providers in the market so if I stop provide freebies and havent made an impact on customer's experience then I can only wait for the existing to go and new to come!!