?Our Ability To Create Sustained Profit and ?Support Local Business
I remember the days when the concept of ?free? was used to capture our attention as part of a promotion. There were very few special offers where business owners were willing to provide goods or services at no cost to simply connect with prospects and customers.
I?ve often heard the phrase: ??If it?s free then it isn?t worth anything.?
I was around in the 80?s when the concept of a lost leader was developed in retail. There were also gifts with purchase, purchase with purchase and percentage discounts. Pricing items at cost or with marginal profit to introduce a product or service for a limited time or while quantities last. At the time, I was a National Buyer for a major department store with over 220 stores coast to coast. We participated in and encouraged the concept as part of the marketing strategy. I will say with conviction, that it was a great way to connect with our customers and we most often found increases in sales throughout the limited time offer.
As a Business Consultant and Coach, I find myself having conversations with clients and colleagues about marketing strategies that include the concept of free. We are asking the question:
Has the pendulum swung too far the other way?
In recent months, I have seen a number of businesses offering ?free? services that are intended to increase our visibility, encourage collaboration and create connections within our community. We use these initiatives to introduce our products and services and amplify our message. Inviting people to connect with us and our business. I too, have a passion project where I invite you to share your story for free as a way of supporting you and your business while introducing my services. I know from experience how important it is to create channels of communication that increase our visibly and support our great idea.
We are all mindful of the challenges we?ve been facing in recent months supporting government restrictions for the benefit of our health which have affected sales. As a result, there are more and more free offers being advertised throughout various social media channels. At the very least, these incentives ensure that our brand image remains relevant and top of mind.
What I find concerning are the conversations that include an expectation of ?free? with little or no regard for the value of these goods and services. Regardless of the special offer, we know there are costs associated with the delivery of free products and services. ??I?m wondering if free has become the new lost leader?
If approximately 80% of the North American economy is dependent on the support and revenue from small business?? How do we feel this is sustainable?
Everyone is in business for profit?. even the not-for-profit sector relies on grants and donations to cover costs.
My fear, if this trend continues? how will anyone be able to build and maintain their business with sustainable profit? Let?s not forget, the tax revenue we collect and remit to our local and national governments is also dependent on our success to fuel the economy, building communities where we choose to live, work and play.
There is no doubt that competition is fierce, with many entrepreneurs having to rely on innovative ideas to stay in business while riding the wave until we see signs of recovery within the global economy.
One thought comes to mind, as business owners, we are also consumers.
Do we expect our colleagues to be in business in the future if we don?t support them with paid services?
I truly value and appreciate the expertise of my colleagues and I?m sure you?ll agree, many local businesses support our communities through donations and volunteerism. As part of our commitment to innovation, we have all made investments of both time and money to create value for our customers. From my point of view, we need to be realistic about the concept of ?free? and at the same time support one another with our buying power.
There is a great quote from Brian Dyson: ?Value has a value only if its value is valued.?
In order to create businesses with sustainable profit we need to support one another by purchasing products and services from the very companies who have taken the leap of faith to support us with marketing initiatives for ?free.?
What do you think?