Small Firms Resort to Freebies and Special Deals
Faced with a deepening recession and evaporating sales, an increasing number of small businesses are resorting to a high-risk strategy: costly giveaways and promotions to lure the reluctant consumer.
If the strategies work, these companies could have a powerful weapon in their struggle to weather the economic storm. But if they don’t work, the more vulnerable businesses could find themselves in a bigger financial hole.
“Offering things for free is a very dangerous area to get into” for little-known small companies, because it threatens to establish the brand’s reputation as cheap, says Barbara Apple Sullivan, managing partner at New York communications strategy firm Sullivan & Co. “Clients or prospects [may see] the product as worth what they’re paying” during a promotion, she says.
But, she adds, the promotions can give the companies a shot of finding new customers — something in short supply right now. And it could lead to even greater long-term success if these customers are willing to pay full price for the products or services in the future.
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Jaclyn on February 12th, 2009 8:22 am
I think it is a good idea for companies to offer some sort of freebie or promotion. it does bring in a lot of customers to take advantage of the offer, which in turn they walk around the rest of the store just to see what you have and some of them end up purchasing or getting more then just that one item that was free or part of a promotion. sometimes you will even get groups of people, people tend to take family members and friends with them to big sales and promotions, this is good news for businesses.
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