Free for the Taking

Free.

Initially, when I think of this word, I think of a “free” space on a Bingo card.  That, and bright yellow starburst shapes on packaging, calling attention to an extra doo-dad included.

File:Bingo card - B&W.jpg

Picture compliments of Abbey Hendrickson via Wikimedia Commons

But the word has different connotations.  As blogger Chris Anderson points out, free products are part of a new way of doing business.  “The idea that you can make money by giving something away is no longer radical.”  Cell phone companies rigidly adhere to this business model: a trip to investigate cell phone prices will reveal (upon careful inspection of the price tags) that cellular providers make up the difference in add-on service fees and “perk” fees.  For example, smart phones often involve a monthly fee of $10-15 a month for Internet access.  This is required as part of the phone plan.  Therefore, the carrier will not allow customers to use smart phones unless they pay for internet access, too.  What a pile of baloney!

On a brighter note, I freely admit to being a fan of gifts with purchase.  Oftentimes, the gift comes with a purchase you were planning to make anyway.  Take Clinique make-up.  Gifts with purchase always include travel-size versions of popular lipsticks, moisturizers, and mascaras.  The minimum purchase amount is usually $26.50 or lower; not bad if you need foundation and powder!  Plus, baby-size make-up is just more fun to use.

However, since I work at a bank, I’d like to consider another business model: “free with stipulations.”  All of our bank accounts come with a monthly fee of either $8 or $10 dollars, sometimes $25.  All those fees are waived when certain requirements are met: a $25 monthly transfer from checking to savings, a direct deposit of $100 or more, etc.  Then, you enjoy benefits like discounts on check orders, and possibly discounts on loans.

Many customers upgrade for the interest rates or the prestige.  We always make sure to put a customer in a package that will not result in fees.

This past Saturday, I offered a customer with a sizable balance in a free checking account if he ever gets offers from tellers and bankers to upgrade his account (We have to have sales conversations with customers.  It is our job.)  His resentful response? “Every time I make a deposit.”

No need for snark, customer.  We are paid to sell products, and we are expected to offer products to better serve you.  And shouldn’t you be used to this if it happens “every time?”

A lot of the fuss over the “free” model is the psychology of free.  Anderson points out in his article, “Give a product away and it can go viral.  Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer.”  This is so true.  Free bank accounts made it so easy to get customers signed up.  Now, we still offer “free” accounts, but there are requirements, and they aren’t free, but the fee is waived.

This is a really complicated way of saying that the concept of free is tricky.  Be a little wary if something is free.

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About sunlightsnow

I am working 40 hours and going to school full-time, which means what little life I can lead will be consumed with work, schoolwork, and sleeping.
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