Freebies: Who benefits most, and are they really worth It?
Apr 15th 2010 5:30PM
Updated Apr 16th 2010 7:30AM
But let's be honest: Who are these "freebies" really benefiting the most?
In virtually all cases, it's the company doing the "giving," not the recipients of that free cup of coffee from Starbucks or those free cupcakes from Cinnabon.
Tax Day Freebies -- like all giveaways -- are marketing gimmicks first and foremost. They're not designed with consumers' best interest in mind. On the contrary, these limited-time promotions are clever ways to generate publicity, and in the process nab market share too.
By offering something free, businesses get a low-risk, high-value chance to market their products and services to both new and existing customers.
The Freemium Business Model
It's all part of what Chris Anderson, author of Free: The Future of a Radical Price, describes as the "freemium," or free-to-premium business model used by many corporations.
According to Anderson, companies give away their most popular stuff for free, because they know once they've got you in the door, they'll be able to upsell you on higher-priced goods and services.
It's pretty much the same game that's been played in the supermarket industry for decades. Grocery store chains may offer household products like toilet paper or soap for free -- or perhaps 1-cent. That's a "loss leader" in industry jargon. But supermarkets can afford to offer these "deals" because they're betting that you'll spend money on milk, bread, eggs and anything else that strikes your fancy once you're walking the aisles.
Check out this video in which Anderson describes the freemium business model and how it works for businesses ranging from retailers to media empires to video game companies.
Even if you don't fall for the old upsell trick, another questions bears consideration: Are these "free" deals really worth it?
In many ways, the answer is, emphatically, no.
First, let's look at the time crunch you face to take advantage of these deals.
Want a couple of free cupcakes from Cinnabon? Better hightail it over there -- the offer is good only between 6 p.m. and 8 p.m., and while supplies last.
Or what about a free slice of Ice Cream Pizza from Maggie Moo's. That's available for a short window too, from 3 p.m. to 7 p.m.
These deals are suspect for other reasons too. Many of them cost you anyway. Maybe not monetarily, but there's always a time or information cost, and maybe both. Time spent standing in long lines for that freebie, for instance, or personal information you're forced to divulge about yourself.
Case in point: You want a free taco today from Taco Del Mar? No problem. As long as you're willing to give up your name, e-mail and zip code. (Sure, you can ultimately opt out. But don't be surprised if you find yourself added to yet another e-mail marketing or spam list afterward).
Lastly, why get so worked up over Tax Day freebies when in reality freebies are offered all year long? In fact, in exactly one week from now, many of the same companies touting their freebies today will be doing the same thing on Earth Day, April 22.
And just to jog your memory, in recent months we've seen Valentine's Day Freebies, Labor Day Freebies and the oh-so-popular Election Day Freebies too. So trust me, these "deals" will roll around again.
There is one freebie, however, I'm telling my single pals to check out. It's a free 3-day trial VIP membership to Chemistry.com. The deal lasts all day and started at 12:01 a.m. You don't need to give up a credit card number to get the free pass. You just go set up your profile, make a date, and voila! You're on your way to meeting Mr. or Mrs. Right.
At first I thought: three days? Are people really going to spend this Friday, Saturday or Sunday online searching for a potential mate? Then I looked up at my hubby and thought: 'Easy for me to say. I'm happily married.'
So, yeah, this could be one freebie that pays off big time. So go ahead, log on to Chemistry.com today -- and go find your "free" guy or gal. While supplies last, of course.