The Value Of Free As Analyzed By The Pizza Industry
from the is-there-a-pizzster? dept
When discussing “free” and its use as a promotional marketing tool, we often point to the fact that it’s hardly a new concept at all — and the idea of “buy one, get one free” or “free coupons” has been used successfully in the restaurant business for ages. Yet, it appears that some in the food business are going through the same debates that we find ourselves in around here concerning the use of “free” within a business model for the sake of promotion. I would imagine this has become an even bigger issue as many restaurants and restaurant chains experimented this year with big time “free” promotions.
A few weeks back, reader Josh sent in this analysis from someone in the pizza industry about why “free” makes a lot of sense as a piece of a larger marketing strategy. What struck me is how similar the discussion is to the discussions we have here. There are people who complain that giving away free food “devalues” the food. You have people complaining that the “cost” of free food is too high. But, in the end, the guy makes a good case for why free is a great system, for bringing in new customers, who can turn into loyal paying customers:
Many times I hear, “Giving away free food diminishes the value of my brand.” My response is usually laughter, followed by a question: “Are you kidding me?” The goal with free food is to drive qualified prospective customers into your establishment to try your food, service and experience.
Of course, the economics with food is quite a bit different than with content. With food, each “free sample” has a direct cost in that the same items cannot be sold. With content, the argument in favor of using “free” is even stronger, because you are just giving away copies — and each copy is free to make and distribute, even if the original copy cost money.