Franchise Marketing - Don't Give it Away

Franchise Marketing - Don't Give it Away

Franchise Marketing - Don't Give it Away

As franchise businesses are struggling to grow in today's economy, it may be tempting to entice prospective customers with the word "free". It is a powerful word. It gets people's attention. I admit that I will usually look, even if just for the sake of curiosity, when a franchise company is giving something away for "free". I ask myself, "What is the franchise marketing plan?" But as a franchisor or franchise owner, be very careful you don't fall into this trap.

In business, there's really no such thing as "free". The universal business rule in franchise marketing is anything of value costs somebody something. When franchise companies make a "free" offer, what they're really doing is muddying the cost-benefit equation and making it more difficult for their prospects to make a clear value determination. Price isn't just a reflection of value; it's an indication of it. When something is offered free for any length of time, people begin to value it less. Over time, this makes them unwilling to pay a premium for it or in some cases pay for it at all. It may seem at first as if "free" helps the prospects value your brand, but it ultimately hurts it. And prospects also then become used to expecting free offers. Also, it is easy to get caught in the trap of your competition. If you can offer something for free, so can your competitors. The more people pick up on your offer, the more quickly your competitors will match it. What might begin as a temporary tactical advantage can quickly become an industry standard and you all will lose.

"Free" is fine in small doses for limited periods of time, such as a free initial consultation or a free sample of a new product. It's both smart and polite to offer something at no charge as a gesture of courtesy or appreciation to existing customers. Doing so can have a positive effect, precisely because it's after the sale: Customers have already accepted your price as reasonable and the value as worthwhile. It is when you offer something for nothing as an enticement to buy that the danger sets in. If you try to fool your prospects by making your pitch about what's "free," you'll also be fooling yourself. Instead, focus on demonstrating real value and how you can get prospects to happily buy whatever you are selling.

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