Free cars?
Free pricing strategies have made inroads beyond the expected domain of information and technology providers, and arguably businesses with more traditional products and services may be just as likely to benefit from Free in the future. Take one of the largest, most expensive “traditional” items consumers purchase routinely – the automobile. Could cars be free? Here’s a quick look at ways it could work:
Fuel companies give away free cars, with the agreement that the driver uses the company’s fuel exclusively. The cars come loaded with software that reports fuel sources and usage to the sponsoring company, and drivers are docked with penalties if a competitor’s fuel is detected. In exchange, the fuel company has monopolized sales for an entire fleet of cars, securing a steady, predictable source of revenue.
Auto manufacturers provide free basic cars as teasers, offering options to upgrade to premium models for a fee.
A beverage company gives away a limited number of free cars in exchange for product placements, with the cars serving as mobile billboards in key target markets.
Hungry for data to inform the next breakthrough in auto design, manufacturers offer free cars and collect data from the automobiles to inform R&D efforts. As part of the deal, drivers agree to be monitored for driving patterns and energy consumption among others.
Instead of offering a standard three-year lease on a car, the manufacturer offers a fourth year for free. Manufacturers microtarget key influencers and other valuable demographics and pay them to drive the car on a mileage or usage basis.
*Source: Bill Gurley’s “Above the Crowd” blog, www.abovethecrowd.com