Brilliant. Ludicrous. Gutsy.

In a time when customers are hungry for bargains, more and more retailers have attached the ultimate lure to pull in outsiders. Free.

"People love free," said Rafi Mohammed, author of "The Art of Pricing." "It triggers a Pavlovian response in people."

Such was the case at Denny's on Tuesday. Just as Pavlov's dogs salivate when a bell is rung, the food chain's offer of a free Grand Slam breakfast drew 2 million customers.

But experts say these moves need to be done sparingly, because giveaways can teeter in the balance between desperation and a well designed marketing ploy.

"Giving your product away for free is not worth it because it undermines your brand value," said branding expert Rob Frankel.

Scott Nguyen, who took advantage of the Denny's promotion in Concord, said he realizes $5.99 (the cost of a Grand Slam) isn't a lot of money, but in a dire economy it's nice not to have to pay for anything.

"It just feels good when you can get something for free and not have to worry about it coming out of your wallet," he said.

The problem, Frankel says, is people are attached to the idea of it being free, than the actual product itself.

"Starbucks one month gave away free coffee every Wednesday last year," he said. "Have you taken a look at how Starbucks is doing now?"

Last week Starbucks announced it would close 300 underperforming stores, to be added to the 600 it already planned.


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Mohammed thinks the move by Denny's was effective because it can generate the feeling of good will during a tough economic time and places a spot light on the brand. But he warns that it needs to be done sparingly.

"I believe free maximizes trial and doesn't devalue a product as long as it is a rare event," Mohammed said. "Aside from the cost, the major downside is that it attracts customers who truly have no intention of coming back."

There are some companies, such as clothing retailer Abercrombie & Fitch, that take the opposite approach to attracting sales to their products, said Subodh Bhat, a professor of marketing at San Francisco State University. By holding its prices firm, they maintain the image that their brand is worth having regardless of the cost.

"Some company's worry that if they give something away for free, it can be very negative to their image," Bhat said.

With the state of the economy though, other companies are taking extreme measures to lure in customers and try to soften the blow to their bottom line.

"People right now know that there are companies out there that are hurting really badly," Bhat said. "And they don't mind taking advantage of a free lunch."

Sometimes it takes lowering the offer to outrageously low numbers to draw the attention of a customer.

"There are certain things people know the price of really well," Bhat said. "Gas for instance people can tell you the price practically down to the penny, but when it comes to how much a shirt costs, people aren't going to know for sure what is a good price."

Online consumers constantly search the Internet looking for discounts and free giveaways, said Lenka Keston, Marketing Manager of PromotionalCodes.com. There's a coupon code with Office Depot, for example, where a free digital picture frame is given away for free when $100 is spent.

So why do people flock to free promotions when often times it's just a few dollars they are saving?

It's because we're taught that there's nothing in life for free, so when there's something out there that costs nothing, it creates a psychological rush, said Deana Julka, a professor at the University of Portland who specializes on consumer psychology.

"Especially in these times when people feel overtaxed or overburden, there's an internal reward people feel by getting something for free," she said.

The psychology to getting something for free is similar to why people will drive across town to save 50 cents on a tank of gas.

"It's being thrifty and feeling like you beat the system," Julka added. "Free really hits the spot for a lot of people."

Staff writer David Morrill can be reached at 925-977-8534 or dmorrill@bayareanewsgroup.com.