Who Said the Only Thing Free Is Advice?

An old business teacher of mine (names have been removed to protect the innocent) told me that holding sales and discounting product wasn’t a method of acquiring new customers, it was a method of getting rid of old inventory.  While this can be argued, I have largely found it to be true.  Customers end up waiting on products to go on sale and become resistant to the idea of paying full price and any new customers you get are just there looking to find a bargain and you won’t see them again until your next big inventory clearing sale.Interestingly, the same can’t be said for free promotions.  Clearance sales suffer from being both predictable and reoccurring.  When consumers are aware that a new product will be replacing the old or that a product is nearing the end of its life cycle, they anticipate a sale and will likely wait on a discounted price to buy. A free promotion on the other hand, is a one off event.  Unless your company is doing a promotional giveaway every week, potential customers are unable to predict when or if the promotion will reoccur.  This creates a window of opportunity and a sense of limited availability, both of which are psychological triggers that drive consumers to buy.As I mentioned, though, having free promotions every other day or frequently without directed purpose undercuts the potential effectiveness of this business strategy.  Your promotions need to be driven by a specific purpose and not just thrown out there on some random whim.  Before you engage in commercial printing for your big giveaway promotion, take a look at some of these suggestions for purposeful free promotions and see how you might be able to adapt them for your own business purposes.- Launching a new product, product line or service- Creating interest in sales for a flagging product line- Countering new competition or a change in customer demographic- Fostering repeat purchases, product upgrades or recurring services- Getting the most out of holiday or seasonal activities- Announcing a related product or service, such as offering a free rechargeable battery with the purchase of a cordless leaf blower- Announcing news regarding an existing product or service, such as a new iteration, a change in packaging, extended services or opening a new location for your business.As long as you keep it directed and limited to a certain frame of time, promotional giveaways can solidify sales, draw in new customers and ensure repeat business.  Sometimes its just better to give it away than it is to put it on sale.