So by now all of you have heard of freeipods.com. But what is it and how does it work? Well let me give you the breakdown.
In marketing, the majority of you budget is spent getting new customers. Even if they don’t stick around, it’s cheaper to have some contact info (email or address) then it is to get a brand new person. Let’s use America Online (AOL) as an example.
They spend money to purchase list from other companies, then they send you those CD’s in the cases offering you 50 free hours. Or they buy TV spots and print ads (newspaper and magazines) and you go to the web site and sign up. All these attempts to get you to sign up are expensive. In addition, they rate of return (the people who actually sign up) is low. So if you spend $6,500 to reach 180,000 people (think American Idol in San Diego) and only 100 people sign up, you just spent $65 to get one person to sign up. Now that person has to stay a member through the freebie phase (currently fifty days or two months) plus pay for and additional 2 months (@ $29.95/month) just for you, AOL, to break even. And that was just one 30 second spot on TV on one night only in San Diego. Now you have to do that across the country. It’s starting to add up.
So here’s an alternative. You pay a company $20 for each legit referral that signs up and $60 for every referral that stays a member over 4 months. Now you are paying out more in the beginning, but you are getting more for your money. $10,000 in referral payouts equals 500 new customers.
In addition, AOL sells advertising to others. It cost money to be on AOL. What are the rates for being an advertiser on AOL? Well guess what, that’s tied to the number of current subscribers AOL has. Now AOL has 1,000 more customers to sell to you. That raises the rate AOL charges. More money for AOL. So the 1,000 new subscribers allows them to raise their rate 5% or so. That 5% adds up when you are dealing with million dollar advertisers. And it only cost $1,000.
So when you think FreeIpods is a scam, think about this, they are getting paid to get you to sign up. And AOL is getting paid because you to signed up. And you are getting a free ipod.
Want to take your shot at a free ipod, check out freeipods.com