One of the oldest business sayings is “there ain’t no such thing as a free lunch”. This, for the most part, is usually true. And I would tend to agree with this statement – except that I seem to be buying lunch for a lot of people recently. There is another way of saying almost the same thing – “You get what you pay for”. Translation: anything that is free is often tantamount to being worthless.
Obviously, the general philosophy regarding these pearls of wisdom is the fact that more often than not, when someone offers you something for free, there is a catch. How many times do you see an Internet ad for “Free iPod” or “free $25 gift card”? Of course, with these ads, you have to complete and purchase a dozen things that you have no use for – just so you can get that free dinner for two at Chili’s.
Back in the early 1900’s, bars would offer patrons free food, as long as they continued to purchase alcohol. We have the same thing nowadays, but it is usually in the form of free trail mix (and not very good trail mix at that…). The best example of a free meal is the free breakfast at Embassy Suites. Simply pay $200 for a room, and your $8 breakfast is free. What a bargain!
And of course we have to remember the “loss leaders” of the world. You get something for free, but the seller (giver) is going to make more money when you buy something else that compliments the freebie. A personal example is a coupon for a free razor that I received several years ago. I received the razor for free, but then I had to purchase these expensive razor blade refills (curse you, Mach III!). Or what about the never-fail coupon where you buy a $4 sandwich and $2 fries, and they will give you a large Coca Cola for free (their cost for the syrup and carbonated water – 12 cents). And finally, the classic “buy 24 (crappy) submarine sandwiches, and get one for free” – Elaine Benes taught us about that one…
Most everyone has heard of “caveat emptor” which is Latin for “buyer beware”. But I am not sure if there is a Latin translation for “freebie recipient beware”. When you were a kid in elementary school, how often would you offer that extra piece of food to a classmate – and instead of hearing “What’s the catch”, you would hear “Why, what did you do to it?” People are generally weary of anything that is free, no matter what the source (and especially a soft red delicious apple when Granny Smith apples rock!).
Over the past few weeks, we have been reminded again and again that people are skeptical when they hear the word “free”. We have a client that has over 3,000 delivery trucks. In talking with them a few months ago, we discussed tracking their delivery vehicles via the GPS system built into their Nextel phones, and the benefits that they would gain. Since most GPS applications that track cell phones (which they already have) cost about $20 per month on top of a $10 data plan, they weren’t very keen on paying $90,000 per month to track their vehicles – and unfortunately, the ROI just couldn’t justify the cost (even at the time with diesel at $4.00-plus per gallon).
So, we developed AccessGPS, a simple GPS tracking application that runs on their current Nextel phones. And we decided to give it to our client for free. Now, since we have a current relationship with this client, they didn’t balk at getting something for nothing. And, with their carrier’s rate plan discount, they were able to get the cost down to $8.30 per truck per month with an ROI that justifies the expense. Our customer is happy, and we have retained their loyalty for a least the near future.
Since we had already invested in the development of the application, we figured that there had to be other companies that could benefit from our no-strings (or razor blades) attached generosity. So, we started contacting other companies that could benefit from a GPS tracking system (free or not). And of course, the initial push back was “why is it free?”. They didn’t seem to want to hear about the features and benefits, their only concern was the lack of cost. And most of these companies were already paying the $20-25 per month for a similar product. They just couldn’t get over the fact that it was free.
Maybe it is because once you have paid for something (like their current GPS system), it doesn’t make sense for someone to offer it to you for free. It is only when something starts out as free that people can understand the reasons behind it being free. Do you think that Google is going to start charging people for their mapping software? I doubt it. Yahoo mail or Gmail at $5 per month? Nope – both are free, and people aren’t going to start paying for it either. I guess that we just need to tell our prospects that the GPS tracking software isn’t free, but it is $10 a month – and they can try it for three months for free. And then we just forget to invoice them…
Or, maybe we just need a coupon.
Tony Darnell is President and CEO of WideVision LLC.
WideVision is a wireless consulting firm, specializing in invoice analysis and complete wireless lifecycle management – visit widevision.com.
AccessGPS is a free GPS tracking application for your Nextel phone – visit accessgps.com.
Filed under: Uncategorized, Wireless | Tagged: account management, accounting, AT&T, Barack Obama, Blackberry, business, cell phone, cellular, expenses, finance, George Bush, GPS, increase profits, information technology, mobility, Neal Boortz, Nextel, rate plan analysis, reduce expenses, Sprint, T-Mobile, telecom expense management, tony darnell, Verizon, Wireless |
Leave a comment