The ROI of Free - Event Marketer

ROI of Free

The ROI of Free

LAST YEAR COULD BE CALLED the year of the handout. For eight hours on Feb. 3, Denny’s restaurants gave away two million free Grand Slam Breakfasts—two pancakes, two eggs made to order, two sausage links and two strips of bacon. Snack-cake maker Little Debbie last fall gave away one million cupcakes (125,000 cartons holding eight cupcakes each. Yummy).

In between was a raft of freebies: free resumé printing in March at FedEx Office locations; free PC tune-ups at Staples stores from March through Apr. 4; ongoing free rides throughout Manhattan in the HSBC BankCab. And, in a weird twist on the idea, Domino’s inadvertently wound up giving away 11,000 free medium pizzas when someone typed in the word “bailout” into a promo code window for an online promotion the company had contemplated but never approved. Word spread faster than mozzarella on a hot pizza, and of course, Domino’s delivered on the offer. Even b-to-b brands are in on the act. AlterEcho, a new division of TechLaw, a consultancy that helps the government address environmental issues, is offering up to $50,000 of free consulting services to a business facing an environmental business challenge.

What’s this all about, Alfie? Are we really meant, as the song goes, to take more than we give? Or, are we meant to be kind? Or maybe just really good marketers, with an eye toward ROI. Denny’s free breakfasts brought in a tasty $50 million in news coverage for the restaurant chain, 47 million hits to its website and thousands of emails. Little Debbie’s fan base on Facebook in three weeks reportedly grew from 5,000 to 10 times that. Let’s put down our forks for a minute and take a closer look at the ROI of free.

Jill Molinari, director of technology marketing at Staples, agrees that the general public loves “free.” She explained, “These types of promotions are great at raising awareness and visibility and creating word-of-mouth buzz, but to be successful, you need to choose wisely and ensure the giveaway will drive a sustainable economic return for the organization in the long run.” So, how did Staples’ free PC tune-up program perform? “By evaluating overall sales lift in the category as well as the buying behavior of customers taking advantage of the program, we saw an increase in overall awareness in our technology services business, which is one of our fastest growing categories in retail,” she says. “While we can’t attribute our growth entirely to the free tune-up promotion, it certainly does help.”

Ditto for HSBC, which measures how many rides are given in its vintage Checker BankCab, events attended, materials distributed and impressions generated. “But the true success of this campaign is demonstrated by the consumer and employee feedback we receive,” says Neil Brazil, vp-public affairs at HSBC. “We know that many customers and non-customers who ride in the cab have either started or increased their relationship with us after an encounter with the BankCab (and he’s got the letters to prove it!), but the objective is to increase awareness and demonstrate the brand attributes of HSBC.”

At AlterEcho, ROI was one of the first considerations before launching its $50,000 Sustainable Business Boost Award, which was a means of getting the new division in front of clients it had been working with and of meeting new commercial ones. The award, which will be distributed in 2010, will help the company build currency and win a client right off the bat. “We factored in the costs of our marketing and the costs of our labor,” says Mark Heaney, vp at AlterEcho. “It’s not a direct cash return, but because of this relationship there could be future assignments from the winner and who they connect us to.” EM

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