There is Such a Thing as a Free Lunch

by Gary Colen, President
Looking for a guaranteed way to get your product in consumers’ hands? Give it away for free.

In the wake of May’s KFC grilled chicken riots, I’ve spent quite a bit of time pondering the tenet of “free” as a promotional strategy. Free has always been (and always will be) a strong tool to excite consumers, but in the wake of continued economic distress, we’ve seen a recent resurgence of “give it away” marketing. Coldplay has announced they'll give a free album to all concert attendees. FedEx recently offered free printing of resumes. Burt’s Bees is giving away 25,000 lip balms to celebrate their 25th Burt Day. Friendly’s is even giving away free ice cream.

We’re seeing free being met with great fanfare and consumer appeal, but does it lead to success? Understanding that success looks different to every brand based on their objectives, when free is executed well (read: strategically), it doesn’t mean free of profit. It means free to succeed.

Let’s take a quick look at two examples from this year of how free was done right and done wrong – Denny’s and KFC.

• During the Super Bowl, Denny's promoted an offer giving away free Grand Slam breakfasts via a 30 second TV spot. In preparation for the rush, they extended store hours, overstocked on eggs, rallied the staff and ended up feeding roughly two million people. The hard cost: $5 million dollars on food. The amazing news: they broke even less than a month later thanks to day of drink sales and coupon redemptions, and more importantly, they cashed in on nearly $50 million in free advertising and mostly positive reviews!

• KFC had all the pieces in place to utilize free to create tremendous momentum for their grilled chicken launch: a new product offer, coupons for a free meal and, the ultimate kicker - an endorsement from Oprah. However, KFC underestimated the power of free. Not all their franchises honored their own coupons. Employees weren't trained to handle the demand. They ignored the risks associated with free and were ill-prepared for the response. After two days of lines, and a lack of legs and thighs, all they had to show was negative buzz and disgruntled clientele.
  

So, what’s the next big idea to harness free? How can we deliver trial and ROI, drive profitability and grow brands without the grilled chicken backlash?