The Concept of Connecting with your Consumer

March 13, 2008

From reading the wired.com article I have learnt that many companies will give away products such as a cell phones for $0. But they will get you with the contract you sign. Throughout the business community there are many companies who offer free products, but will make money of the contracts you sign. All the little fees that are added onto your cell phone bill can make it seem much higher than it should be. I think a lot of people would sign a cell phone contract on the spur of the moment decision, not thinking of the bills that will come in the future.

One question that comes up is why do companies offer free products?  I think mainly because once you get the free product, you have to buy other products to use that particular product. Or once you try that free product, you might really like it and are willing to pay the actual price for the product.

I really like the example used of Gillete razors. If you get the Mach 3 razor for free, they get you by buying the shaving cream. Most people would think the razor would work best only if you use the Gillete shaving cream.

A question that arises to me is dealing with if companies are better off offering free services to the consumer?  For example hotmail letting people sign up for e-mail accounts, and e-mailing people for free.   The answer is yes for the fact they have other services the consumer can pay for  such as larger inbox storage for your e-mail. As well many people are signing up for new accounts because it is free. The value of Hotmail is very large mainly because of all the people who use this service.

“From the consumer’s perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer. The psychology of “free” is powerful indeed, as any marketer will tell you.”

 

I think a valid point is made in the above quote.   People are attracted to free products or services.  Once you charge a certain price for your product, you are competing with many other companies prices.  Parking is another free thing that many people like. Nothing more annoying than paying per hour to park downtown Charlottetown. I never know if my time is running out when I am in the mall.  I always try to find a free spot to park.  If there was more free parking downtown I would shop more.  Why are we paying to park in Charlottetown? Most likely to pay for services throughout Charlottetown. Maybe to pay for the pavement on the streets.  Its more a less just annoying having to pay to park.  But at Christmas time and on weekends it is free to park, which encourages people to shop more.  Which is good for our economy when more people spend money.

Heres an interesting video that I found about the conept of how people like free, and the concept of free.  In this short clip the person constantly mentions the word free. Free process to set up your account, get things for free etc., and most importantly you get free products.

I think the main point of offering products for free is drawing the consumer in to try other products or services that your company offers.  Or once you sign that contract for the free phone, you are paying monthly bills for 3 years unless you opt out of the contract and pay the penalty.

That one product you offer free could be your companies ticket to business from that consumer.  If they really liked the free sample, they probably would pay for the actual product in the future.

The concept of connecting with your consumer is very important as the consumer is the most important part of any business. Without customers, many people would be out of work.

Mitchell Watts                                                                                                             

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One Response to “The Concept of Connecting with your Consumer”

  1. mellaz Says:

    I agree with you Mitchell companies give away free samples to increase their sales and hopefully in turn profits. Giving away something for free can increase sales, let alone profits. These promotions are most commonly used to promote a brand new product or service that people have never tried before.


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