I’ve always thought “free” is a great price for something I’d like to buy…even for things I don’t want or need. “Free” works for so many reasons:
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no financing
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at a minimum, you should get your money’s worth
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no long line ups to make a return
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no justification or rationalization on the purchase
Each morning, McDonald’s restaurants in Canada are handing out free coffee until Sunday (May 3rd). Here’s exactly what you need to do to qualify:
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Show up.
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Get a coffee.
Promotions, to be successful, have to show the target a perceived advantage when considering the reward/risk relationship. If you expect someone to jump through a few hoops to engage in a promotion, the reward must exceed the investment. The McDonald’s promotion is based on the age-old practice of sampling to increase utility. But (and it’s a big BUT) McDonald’s opened up the promotion to everyone and not just people who had a coupon, not just the third caller, and not people who had already bought 5 coffees to get one free.
In the big scheme of things, not having to print coupons probably offsets the product cost. The profit margin on a cup of coffee falls just short of 100% and I’m sure the cost of the cup may be the biggest line item. McDonalds also knows (as do we) that it is entirely likely that
the free coffee may also induce sampling of the muffins, the breakfast menu, etc. and the increase in traffic (and the incremental muffin margin) would more than offset the investment in handing out a few million cups of coffee.
When trying to make an impression, it’s also important to exceed expectations: McDonald’s coffee is really good. And if, for whatever reason, you feel a little awkward about not paying…I recommend the apple caramel melt.
