Wired: Shoppers Buy Into 'Free' Stuff
Amazon just ran a campaign letting customers buy "free" (after rebate) boxes full of branded goodies provided by software vendors, from T-shirts to demo CDs. You don't know in advance what you'll get. This promotion is sold out so they must have struck a cord. Seems smart for a number of reasons:
The old trick with mail-in rebates is that a high proportion of customers forget to redeem them on time, so you don't get to actually give them their money back. This is even more likely for a small amount (in this case $10) as people can't bear the administrative hassle.
People basically volunteer to get promotional samples. When was the last time you actually requested to receive, say, an AOL CD?
This puts a price on things people usually expect to get for free. That's the first step of actually getting people to value these items. You've seen this done on mail-order catalogs that come with a price tag but you end up not paying for them (for instance, the price is taken off your first order.)
I don't think this campaign can be replayed permanently, but as a temporary summer trick (Amazon.com is not going to add that kind of logistics overhead in the middle of Xmas season,) I find the idea has merits. If anything, customers liked the novelty value.
Finally, let's look back at the good old boom years. Does anyone remember the 3 DVDs for $1 (with free shipping!) promo from 800.com in the winter of '98? Those are the cheapest DVDs I ever got (though it took hours to complete orders, given the huge number of concurrent shoppers!)
