The saying “there’s no such thing as a free lunch” has become so well known that it has almost morphed into a warning label. Customers become suspicious whenever they see marketing material promising to deliver something without charge. In the real world, everyone knows that resources cost money. Whenever a business offers a valuable product or service for free, there will always be those who question if the offer is “too good to be true”.
Resisting the notion of fairness
For aspiring entrepreneurs and business owners, it is essential to resist the desire of needing immediate pay in return for your work. While this natural principle is vital to ensuring that people don’t take advantage of you, it should be temporarily set aside when trying to grow your business at a rapid pace.
This method does not require you to surrender your entire catalog of products or services; that would be ludicrous. What it entails is providing all your leads with a free, standalone item that would be worth something if you did decide to sell it. This item can be different for every business. Some might come in the form of a free book, free consultation service, free test drive, free trial for a set period, or even an actual free item to be delivered by courier. On face value, this might seem like a loss. Let’s break down the path to profit.
How the “free lunch” leads to profit
Consumers crave value. One of the things people desire most in life is value. Money represents value, and if customers are not getting at least an equal amount of value in return for their money, they will come to resent your company and might even request a refund.
By giving away a valuable service or product, the customer gets to see if the qualify of your product or service matches their expectations. Even if it doesn’t, the customer is more likely to ignore it and move on, rather than spread bad reviews – there was no money lost by them in the first place, after all.
Consumers are more willing to commit to a follow-up purchase once they’ve had a free sample. Because they now know what to expect from you and your company, every person who eventually decides to continue transacting with your business is doing so because they like what you’re selling. These types of individuals may become your most valuable customers.
A customer who is treated with care and respect will have high regard for the company. Those who prefer to keep their prospects at arm’s length by adhering to common business practices like “money down” or “pay before play” often turn away potential business at the door without even knowing it.
The “free lunch” is a continuous process
Many successful entrepreneurs that have mastered this concept often follow up a customer’s first purchase with another round of free value. They will send a personalized email asking about the customer’s experience with their product or service, and whether there’s anything they can do to improve it. Included with this is usually another service, e-book, video, or other item given free of charge. This accomplishes two things: 1) the customer is convinced that the company really does care about him or her, and 2) the customers is more likely to buy more items in the future because of the second round of free value they’ve just received. The relationship has become mutual; the company helps the customer out and treats them like a friend, and the customer becomes devoted to the company because it has become an essential asset in their life.
Don’t be afraid to give away things you have worked hard for in your business. Ironically, it might make you richer than you ever imagined.