Advertising Freeconomics

The most powerful word in marketing history is still the future of advertising success. And it´s still bringing folks thru the door!

Before you say "But we CAN´T SAY FREE in automobile advertising!" let me share a few thoughts with you on the lessons of Freeconomics. And in just a few paragraphs I´ll get into ways you can take advantage of this potent word in your automotive retail advertising.

When I was a young disc jockey on a radio station in Southern California I got a great lesson in Freeconomics. Since I was only on the air at the radio station four hours a day I had tons of time on my hands and decided to open a small gift store featuring consignments by local artists. I rented a storefront on a busy route heading up into the mountains near Big Bear. It turned out to be a little too busy. Tourists would stop, browse quickly, ask to use the restroom and leave. A friend of mine visited the store one afternoon, surveyed the situation and told me she knew how to get the register ringing without changing one thing in the store. The following Saturday my friend, June, showed up with her teapot and homemade walnut banana bread. She set up a a little table near the register. Every visitor that day was offered a free cup of tea and June´s made-from-scratch home baked bread. It was the single biggest day of sales since I had opened the store.

Freeconomics 101.

A few years later, when I moved back to the Western Massachusetts area (where I had grown up) I was fascinated by the offering of a well-known jeweler in the Hartford, Connecticut area. He was on just about every radio station in the Hartford market offering FREE tiny silver plated spoons. He conducted this research project once a year to determine the quality of customers listening to various radio stations. You did not even have to come into the jewelry store. The spoons were mailed out. You simply had to call and give you name, address, phone number and the call letters of the station you were listening to. I had the opportunity to talk with the jeweler about this project. Not only was he able to discern volume of response, and thus the true market cost/value of the radio stations he advertised on, but he was able to acquire mailing lists which could be use for direct mail programs in the future. He separated these lists by station so he could evaluate the quality of return and over a number of years, a comprehensive study of the type of customer each station yielded. While the FREE spoon promotion cost the jeweler approximately $10,000 including mailing costs, his return on investment was very worthwhile. And despite the fact that the only thing this merchant talked about in the campaign was a free spoon and how many years the jeweler had been in business, overall sales increased dramatically at the store during the month of this promotion.

Freeconomics 202.

"BUT WE CAN´T SAY THE WORD FREE IN OUR AUTOMOBILE ADVERTISING!"

YES YOU CAN use the word FREE in your advertising. No, you probably can´t use it with reference to the sale of a car, as in free options or extras as most states have now ruled there is no such thing as free anything in a car deal, but you can use the word FREE in a number of ways to capture the attention of your intended audience. The word FREE can be used in copy such as "Set yourself FREE from high payments with our lower lease rates." Or, "FREE yourself from maintenance worries with our all inclusive maintenance program included on most of our new models." You can even use the word FREE in disassociating its use in your ad copy, such as: "While we are not allowed to say this GPS system is FREE, we can you say won´t pay one penny extra for it with the purchase of any new X or Y model."

The word FREE has a magical quality all its own. In every direct response ad tested over the past 40 years, just the addition of the word FREE increases response rates, sometimes dramatically. Even if the item being offered is not free, the mention of FREE shipping can increase response rate as much as 20%

One of the most successful FREE campaigns I ever witnessed in the retail automobile business was a project conducted by a Lincoln-Mercury Dealers Association in a Midwestern market in the late 80s. For six weeks the LMDA advertised free windshield wiper inserts to customers of the area dealers as part of a tie-in to promote the lifetime warranty on service work (long since discontinued.) The dealers were just amazed at the number of customers this FREE promotion brought through the doors of the dealership. Even more amazingly, the average repair order for the FREE inserts was $60.00. What a great use of LMDA money. What impressive proof of the power of FREE.

While most dealerships are restricted on the use of FREE in vehicle advertisements, there is no such prohibition for service promotions. Dealerships can offer free safety checks, free services as a bonus with other paid service packages, and of course extras like a FREE carwash with service, FREE shuttle service, even FREE coffee and donuts in the service lounge.

Many clever marketers have built their entire ad campaigns around the word FREE. For instance, you´ve probably seen ads for FreeCreditReport.com which suggests you can get a free copy of your credit report online. This service tries to sell you a continuing membership which will be charged to your credit card unless you cancel. Ironically, the website where you can genuinely get a totally free credit report once a year without any strings is AnnualCreditReport.com which was put together by the three major credit bureaus. But they don´t have the clever singing ads on TV and they don´t use the word FREE in their URL so they probably don´t get as many hits as the money making venture. Don´t you love capitalism! King Gillette sure did. He gave away millions of free razors and razors bundled with free items to hook guys on his thin disposable razor blades…that would only fit his razor. Free huh!

The most important new advertising medium in the world, the Internet, spawned a whole new world of FREEconomics. Never have so many businesses been grounded in the concept of FREE. How about Google? Not only is the search engine free, so are the tons of related components, calendars, email, even a service that lets you get phone numbers for free. Dial 1 800 GOOG 411 and forget about paying your current phone service a dollar or more for looking up a number. And have you ever heard of craigslist.com? What´s up with that?

Chris Anderson, editor-in-chief of WIRED Magazine wrote a terrific article entitled “FREE! Why 0.00 is The Future of The Business in the February, 2008 edition of WIRED. If you can´t find a copy, email me and I´ll be happy to share a copy of the article. (for FREE…just email me) It´s a great essay on the power of Freeconomics. Also be looking for a new book by Chris entitled: "FREE" to be published in 2009 by Hyperion.

Yes, you and I know, nothing is really free. And most of your potential customers know nothing is really free either…there is always some catch. But consumers play an interesting game. Some take the challenge to extract the free stuff without getting the other stuff. And for some, that magical word FREE is just the ‘push´ they needed to get them off their duff to try something they were considering anyway.

Put the power of FREE to work for you in your advertising. Without a doubt it is the single most important marketing motivator in ad history.

By the way, feel FREE to pass along this article to your colleagues!

6/26/08 Copyright © Jim Boldebook (for September 2008 Issue of Dealer Magazine)