When I arrived at work this morning our parking lot was full beyond capacity and it stayed that way most of the day.
For those of you who watched the Super Bowl (go Steelinals), I am sure that you saw the ad offering a free Grand Slam breakfast on Tuesday to anyone who came in to Denny's. We happen to have a Denny's in our parking lot so our shopping center was buzzing all day. The line from the time I arrived this morning until the special ended was never shorter than a quarter of the way around the outside of the restaurant.
Some people waited in line for hours to get a “free” Grand Slam. But was it really free?
Consider, most of these people probably have jobs so they were skipping out on several hours of paid work in order to eat a $6.00 “free” meal.
Two thoughts should come to mind for business owners:
1) As a business owner you need to always consider what your real costs are. Every action you take needs to be taken with the value of your time in mind. Sure, you may spend time doing some simple task to “save money” by not paying someone else $7 an hour but what are you losing by doing that? Can you think of any use of your time that would more than pay back the $7 an hour if you were engaged in that activity instead? Wouldn't it be nice to spend your time planning your future instead of stocking your shelves?
2) Never underestimate the power of “free.” There is a chasm of difference between buy-one-get-one and buy-one-get-one for a penny. People will act irrationally in order to get a free item or free service even when the real value is objectively negative. Am I advocating tricing your customers into wasting their time? No. That will only lead to some angry customers who figure out that you've been playing them. I am suggesting that you consider what you can offer for free that will result in a net benefit for both you and the customer.