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Charity: Give, then Take

In pursuit of the Force, Yoda told Luke Skywalker, "Give, then take." The "Yoda Principle" (charity) can be an effective strategy in e-commerce when used correctly. By charity I don't mean giving away the store or providing free services that you can't afford. It can be something as simple as a loss leader—well known in the real world of commerce.

I'm reminded of the company that sold printers at cost. They received plenty of orders, of course, but how did they make money? Odds were good that the customer who bought a new printer would need a cable to go with it. They sold cables at three or four times the prices charged by their competitors. The competition even helped, though inadvertently. Most printer merchants wouldn't sell a cable without a printer; or, if they did, would charge the same as the low-cost printer company.

How about this charitable strategy: Give product away for free! No, I'm not a sandwich short of a picnic. This strategy can work for certain types of products—ones that have a connected service. One business that uses this strategy is emWare, a company that has created a lawn sprinkler system connected to the Net. The sprinkler itself is merely a platform for a range of upgraded services that can be integrated into the product. For a service fee, the sprinkler can be programmed to automatically contact the National Weather Service web site to check weather conditions and forecasts, and then turn the spray on and off accordingly. The sprinkler company makes money on the subscription services, not the product. In a way, Gillette used a similar idea many years ago when it gave away its razors and made money selling the blades.

Let's face it. The word free is music to a consumer's ear. If they can get something in return, many consumers would be willing to divulge their personal likes and dislikes. So what are the most popular freebies that consumers respond to on the Net?

  • Free shipping

  • Limited-time discounts

  • Gift with purchase

  • Free coupons

  • Free sweepstakes

  • Free gift wrapping

Try these out on your current customers. They're effective tools for persuading customers to provide the personal information you need to successfully market and sell to them.

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