Discounts and Freebies and why companies offer them

There are so many free Deals or Discounts!

There are so many examples of discount/free offers around today: 2nd one free, once you’ve purchased offered more stuff to buy at discount, cheap or my article: freemovieticket, etc.

Seems that everyone is offering discounts or freebies now. A few industries in particular I thought of are: Restaurants, Accomodation/Travel, Service Stations, Seminars, Internet Purchases, Professional Services (initial meeting free),etc.

Always look a gift horse in the mouth

Whenever there is a free deal or discount or something that seems to good to be true -I always ask why. Once I think through why the company offers the deal I think about whether it is worth accepting. Just because it is “free” does not mean it is worth accepting. You only want to accept something free if it is valuable to you. (otherwise you might accept a Trojan Horse)

My Top 9 of Why companies offer freebies or discounts in general

TYPE 1: To benefit the company

1. Sample to Sell Next Time To get you to sample their new/more expensive product so you might buy it next time.

2. To build a future relationship -A common way of doing this is to get you on their mailing list/website so that you are more likely to buy from them next time (or a website - gain advertising revenue for them when you visit the site).

3. They still make a Profit Because they will still make a profit despite the discount (e.g with the my article: freemovieticket Hoyts will still make a profit from friends tickets and food/drink sales).

4. To Upsell: Because at the free consultation/visit/seminar they will try to sell you on their expensive product. (and the small percentage of people who sign up for the expensive product will offset their costs of the free stuff)

5. Makes You Like Them It makes them look good so that you notice and decide that you like the company and buy from them in the future.

TYPE 2: To rip you off (see tomorrow’s article on how to avoid getting ripped off and what to do if you get burned)

6. To get your personal details for phishing/credit card fraud.

7. To charge you more than you expected (a quick snippet of tomorrow’s article: I signed up to get a free report for $2 USD – then they started charging me $49.95 USD a month.  CBA refunded the amounts charged but only from when I cancelled by email)

TYPE 3: To benefit the community

8. Companies are sometimes run by kind people who like to give back to the community/charity (and by giving back they might also benefit by further profits - see reason 5. Makes you like them).

there are probably many more reasons and variations of these.

What I do 

Free Product/PDF to sign up to newsletter – If I like the newsletter I generally go for this.

Anything else -I have a good think about it!

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