Thinking of Buying a Fast-Casual Franchise? Read this report first.
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Free Means More Sales
If you don't mind the extra costs, free stuff generates buzz, traffic, and profits.

Here's the dilemma about giveaways: will sales increase? Or, will you end up with unnecessary expenses? The answer comes down to behavioral psychology, says Gary Witt, managing partner of the Marketing Psychology Group in Scottsdale, Ariz.

Witt recently studied consumer behavior during two car giveaways. One sweepstakes offered a slick-looking Mercedes. The other offered several general cars, giving contestants a better chance of winning. The Mercedes drawing received more interest, because "there was no sex appeal to a Ford Taurus or Saturn," Witt says. "People don't look at giveaways rationally. They look at them emotionally. One really great thing—like a fancy car or vacation or laptop—will attract more customers than a bunch of average stuff."

Free vacation

Boston-based Kelly's Roast Beef recently partnered with Coca-Cola and Bryan International Tours to send a customer to Ireland.

The fast-casual restaurant with five stores will give a customer round-trip airfare for two from Boston to Shannon, Ireland. The winner's itinerary includes eight days and nights traversing the Irish countryside via luxury motor coach as well as exploring the Blarney Castle, Jameson's Whiskey Distillery, and Trinity College.

The trip is valued at $20,000, says Sheri Richberg, Kelly's marketing consultant. Other prizes include, Boston Red Sox dugout and grandstand tickets, which in Boston can be priceless, "especially if the Red Sox are winning," Richberg says. "We really wanted to generate some excitement about the sweepstakes."

Kelly's announced the sweepstakes February 5 and has promoted it through television, radio, public-relations efforts, and in-store marketing. With a March 5 drawing, the free vacation has generated more than 5,000 entries and has substantially boosted Kelly's daily incremental sales. A four-letter word—"free"—has something to do with this success.

"People don't get the chance to get things for free and when it's of value like a trip, they get very excited," Richberg says.

After contestants fill out the in-store entry form, they are plugged into Kelly's email database, and with permission, "we can promote to them via email in the future," she says.

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