Analysis: The free element of a marketing strategy

Giving anything away for free might sound like an idea dreamt up by someone in marketing trying to gain publicity rather than revenue, but it can be an approach that works.

Giving anything away for free might sound like an idea dreamt up by someone in marketing trying to gain publicity rather than revenue, but it can be an approach that works.

In other industries, providing consultancy for free or a nominal fee to demonstrate the potential benefits of services and products has led to sales, and it is arriving as a marketing tool in the channel.

Last year, signs emerged that there could be some value in meeting with a customer simply to advise them about what products they should invest in to improve business efficiency and save money in the long run.

But when Logicalis spoke about the need for 'freeconomics', and Wired editor Chris Anderson gave away his book Free, most people viewed it as a response to the recession.

But according to Gartner, thought leadership marketing (TLM), or the idea of offering free consultancy is a strategy not confined to the down times but one that can help drive sales and improve customer loyalty.

"The principle of TLM is simple enough. You give away a little valuable intellectual property to establish your potential usefulness to the client in the expectation that the client will use your expertise and services," says Rolf Jester, vice-president and distinguished analyst at Gartner.
Gartner highlights the activities in other industries where TLM is used by consultancy firms, accounting for around 20% of their marketing expenditure. But it seems that only a handful of players, including IBM, Capgemini and Deloitte, have been using the technique in the IT market.

Ironically, many vendors used to complain that resellers gave away too much information for free. The anecdote of the engineer providing a stream of free consultancy over their shoulder as they installed a system had some truth in it
But now it seems those chatty resellers were potentially doing themselves a favour. Plus, of course, the other advantage of not charging for certain aspects of consultancy is that it helps avoid the difficulties some dealers had in calculating fees.

Build an identity
To start with, some work might be needed around resellers' branding activities. At a channel marketing conference last year, Cisco set out the importance of its channel partners defining and supporting a clear identity.

The most sustained TLM activity is designed to constantly support and reinforce this branding, but the brand must exist in the first place. For some reseller marketers, that is the place to start.

"A clear business plan, driven by the brand and positioning strategy and accepted widely by multiple levels of leadership, is the essential starting point," says Christine Adams, managing vice-president at Gartner. "External intelligence on competitive activity is critical, as is a good understanding of what is already being done in your company and why."

Whether or not resellers will embrace the TLM marketing philosophy is difficult to answer at this early stage, but one thing is clear: the idea of 'giving to get' is not going to disappear as the recovery kicks in.

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I just addressed this in another comment. Helping, not selling, is our #1 philosophy in sales. Not only does it gain the trust of potential customers, if they don't utilize our service at this time, we remain in their thoughts (and in our case, through our very helpful blog) so may pull the trigger at a future date.