Smile-It-s-free_grande
As I was on the train this week, I saw an advertisement for free internet for a year from TalkTalk, an internet service provider in the UK. Free was in big bold letters.

The online version of the TalkTalk advertisement on the train. Source: Google Images
The online version of the TalkTalk advertisement on the train. Source: Google Images

However, on reading the fine print, I saw the terms and conditions: the offer applied only with a landline charge of £16.70 per month and involved a £5 charge per month after the ‘free’ year, with a minimum contract of 18 months.

Free. Right. This made me think of how companies get us to buy things that we didn’t plan on. Clearly this internet service wasn’t free but was appealing because the company utilised the concept of customer value. Customers only derive value when they perceive the benefits of a product to outweigh the costs (Jobber, 2010). Consumers, regardless of economic background, will consider free a valid, viable option because of the value associated- there is a clear benefit for basically no cost. Come on people! Free internet! Who cares about that £16.70 per month?

Microsoft offers Windows 10 as a free upgrade. Source: Google Images
Microsoft offers Windows 10 as a free upgrade. Source: Google Images

This is the same for Microsoft’s newest offer: Windows 10. The company has offered it as a free upgrade for any Windows 7 or Windows 8 operating system (Tassi, 2015).

This made me wonder: What are these two companies getting in return? After all, as the saying goes, things don’t come free… or is it easy?? I wonder which one it could be.

It is clear to see that both companies are essentially attracting a wide customer base. That is, a whole lot of people. Furthermore, TalkTalk clearly aimed to get new customers as its ad was only valid for new contracts. However, Microsoft’s case is a bit different. Windows 10 is only offered to current windows customers, which means, no new customers. So what’s the point?

According to Paul Tassi (2015), the new system will be available to both legitimate and illegitimate consumers alike. Piracy is no small issue for software developers like Microsoft. In offering this, Microsoft will essential gain the unattainable illegal market, that many of its competitors and other companies try so hard to keep out. ‘So what?’ you might say. These are all still existing customers, well, more or less. Pirated or not, these are still the same consumers and reaching existing customers does not actually result in new sales. That is completely true. In fact, I debated the same thing with a friend of mine. He blatantly stated that, “They won’t get people, who never bought the system before, to buy anything new.” He is probably right.

But then it hit me! It was never about buying it but BUYING IN!!

Reaching a large audience means exposure for their brand. This is Windows’ new operating system. It is also their final windows. Therefore, attracting people, getting people to use their system and try their new features such as Cortana and the new browser, creates brand awareness.

Say hello to Cortana. Source: Google Images
Say hello to Cortana. Source: Google Images

According to Paul Tassi (2015), Microsoft was unable to get everyone on the wagon for Windows 8, and so by doing this, they essentially ensured that everyone got on this time.

But how did it really work? Microsoft again utilised another theory. They understood how consumers make buying decisions through the consumer buying criteria. If you can remember previous posts, we buy based on economic, social, personal and technical factors (Jobber, 2010). In a widely integrated market, where we can get what we what, when we want it. Paid or not. Technical factors, like availability and accessibility, are key. We want it right at our finger tips and Microsoft understood this. They brought it right to us. This is what marketers call intensive distribution whereby companies push the product through every available outlet (Jobber, 2010).

The company also knew that selling a product to current customers is easier than attracting new ones (Marketing Donut, 2011). Therefore by offering it free, it was a way of retaining customers.

So really free isn’t free. Nothing in life is actually free. There is essentially a give and take situation and we are simply taking more than they are getting… Or are we?

Let me know what you think! Feel free to comment, like and share!

Bye for now.

References:

Jobber, D. 2010. Principles and Practice of Marketing.6th ed. Berkshire: McGraw-Hill Education

Tassi, P. 2015. Why Microsoft Is Giving Away Windows 10 To Pirates [Update]. Forbes, [online] 14 June, Available at: <http://www.forbes.com/sites/insertcoin/2015/03/19/why-microsoft-is-giving-away-windows-10-to-pirates/&gt; [Accessed on 14 June 2015].

Marketing Donut. 2011. Selling more to existing customers. Marketing Donut, [online] 14 June, Available at: <http://www.marketingdonut.co.uk/marketing/customer-care/selling-more-to-existing-customers&gt; [Accessed on 14 June 2015].

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