There’s a great technique promoted by some major marketers called “moving the free line up”. It can work wonders for increasing responses to ads and sales, if you measure it properly…
Does it sound a little counter-intuitive that giving away some free stuff that’s usually not given for free can vastly improve your business sales?
Well many successful marketers would completely endorse the idea. This article talks about moving the free line effectively online, but I’ve heard of some great stories of “moving the free line” in physical businesses.
One struggling hole-in-the-wall Italian restaurant owner started getting waiting lines that went around the corner block almost every night. How did he do it? He gave everyone a type of red wine in unlimited quantity for free just for sitting down, they didn’t have to order anything else.
People came flocking for the wine, but on average didn’t drink as much wine in cost to the owner as he got back in sales revenue of other food bought from these same customers. They usually ordered food while hanging around, and invited their friends to come by and they ordered food too. It turned out to be very profitable.
You can pull off the same thing…
if you can give away something customers value enough to increase your response rates and encourages them to buy your stuff
But it has to be something that doesn’t cost you an arm and a leg to offer and also compels your customer to buy other things you offer. This is called a “loss leader” . Many companies use this.
People are usually compelled to get something they want for nothing. Free is a big attention grabber in ads.
That’s why you need to track your response rates before you gave your free offer and after you offer it.
You should already have a system to measure your response rates for your ads.
Measuring response rates is important to moving the free line up successfully. If you advertise a free offer in an ad that has been getting consistent response rates, then it’s easier to determine whether or not your free offer is valuable enough. If not, you have to change what you offer.
You also have to make sure that you’re getting enough returns on sales once you give a free offer that brings significantly higher response rates. If you don’t profit from your free offer, you’ll end up hunting for free stuff, if you get my drift.
So lets say you have a burger joint and offer free fries to bring customers in. Your ads that feature the offer jump up to a response rate of 4% versus 2% previously, so you’re joint is much busier than normal. Now lets say over a week or two people eat about an average of 2 large fry bags in one sitting, and it costs you about $2 total to offer 2 bags of fries, so your “loss” per person is $2.
Now your each person has to order more than $2 average to make “moving up your free line” profitable, especially if you have a lot more customers coming in by significant response rate increases. You don’t have to worry about freeloaders as long ad your average return on each person is positive. If not, then you better rescind your free offer fast before it gets out of hand.
Moving the free line up is a great way to increase business, but it takes careful research and traceable response rates to do it profitably.
Take this advice at no cost, its on me 🙂