And you get a ton of baby products at the hospital after a child is born.
And that’s not even mentioning all the other freebies you get through the mail.
Ever wonder why they give away so much free goodies?
It’s a pretty simple concept really.
If something is given to us for free we may use it, particularly if it’s a physical product.
And, by using it, we find out whether or not we like it.
Now, if the product is good, the sender is likely to have gained another customer.
Obviously, if the product is of a low quality, the sender has made a huge mistake.
The concept is not that dissimilar to a concept explained by Jay Abraham.
Jay said it is better to give the salesman 100% of the profits form the first sale to get a lifetime customer.
You see, it’s the lifetime value of the customer that’s at stake here.
You lose out in the original sale, but you gain a customer who comes back for your product again and again.
If you give away a sample of a product which costs you $10, that person might just keep coming back for weeks, months and even years.
How much would that be worth to you?
In the case of Jay’s example, the salesman goes all out to get the original customer knowing he’ll receive 100% of the profits from that sale.
Who wouldn’t try their best in a situation like that?
So, yes, you make a loss at the outset but you make a gain in the long term.
The most obvious example of this in recent times is where the ‘guru’s have been giving away products they’ve sold in the past for hundreds, and sometimes thousands, of dollars.
Because they have a continuity program to sell.
If you like what they give away, there’s a very likely chance you’ll stay in their program and give them a steady payment every month.
And, when you think that their product, being information, probably costs them no more than the price of the disks and postage and packaging, it doesn’t really cost them that much.
However, they gain a lot.
Imagine a recent scenario where someone is charging around $97 a month…
If they have a hundred clients, that’s $9,700 each and every month.
Not bad, huh?
And there are programs out there charging as much as $3,000 per month.
A hundred of those and the monthly income is… $300,000.
See the point of giving away freebies?
If you didn’t know before, now you know do.