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Morris Mpala, MoB Capital Ltd
I COULD not help but laugh because I can see you thinking free in terms of political elections not economics. I am disappointed for you. I think we need to change our mindsets to economics not politics if we are to economically emancipate ourselves. Lets us learn some things. Economics supersedes all so that should be on our minds at all times if we want to conquer.
Let us take each other back, sadly so. Do you remember you had to sell a cow to buy a SIM card, sell two cows to buy a phone, sell two old cars to buy one ‘new’ car? The cost of Babylon waters was a fortune. Groceries needed a good budget and fuel was a luxurious commodity.
Look at the prices after dollarisation. Even though still considered high by any standards, one can buy with a smile now. This has ushered in freebies or free this and that, zero deposits, samples, no charges etc. The question is: are these gimmicks, just pure marketing antics or real bargains?
Free SIM cards
Value is not in the buying of SIM cards but in the continued use of SIM cards. Therefore free and more free SIM cards so that we can increase penetration levels and increase financial inclusion. The money is in more people using this SIM cards for a number of services and products offered by the service provider.
Free banking services
No bank charges. Money is not in the service charges but in continued use of banking services and how you retain and use your deposits. No banking fees in the future especially given that you are not paying any meaningful interest for my deposits. Banks should just be good at making money from deposits, retain deposits, encouraging deposits and other structured deals than service charges.
Free debit/credit cards
Debit/credit card use is where the money is and not the production of these. These are just tools to make money not that these have to generate revenues for banks.
Free initial cigarettes
This has worked for tobacco companies as they know once you get addicted they will start making their money from there. It is a wise investment if we forgo the health hazard or moral bankruptcy side of things.
Free advertising magazines
Advertisers come together pay for the space then gives away the magazines for free to would be customers. It works because why would a customer pay for things she/he is being enticed to buy. It’s a win-win situation. Advertisers pay and customers get”free” copies.
Free deposits on any purchases
Your lay-bye requirements are to entice you to buy but still time value of money has been considered so the price is still the right price.
Buy two get one free
In order to move volumes business will entice customers through this. You get one extra even if you don’t need but it increases loyalty by customers consuming more of the same.
Free goods/services
This is entirely free goodies in a marketing gimmick as brands push their visibility or their perceived quality to would-be customers in the belief that you will never stray from them after trying their free products/services.
Free beverages with each meal
The price of a meal has been taken care of in other words your free drink has been paid for. In high class hotels mostly all is free because you have paid everything in the price therefore freebies will be provided. It is a packaged deal where all other cost has been incorporated into the initial cost.
Free merchandise to advertise
High end fashion names gives and pays celebrities/socialites to wear their merchandise and our teenagers (even adults) pay through the nose to wear the same brands being advertised.
Free HIV testing
The money is in the medication. You need to know so that you access medication, which is where the money is. So sponsoring free testing has some economics to it given the oligopolistic drug manufacturers in the world.
Free tasting/demonstration
By this you might like the product/service and that could translate into a future sale.
Free maternity fees
It is a national service and social responsibility on Government to declare such but it is not sustainable. It strains the treasury noble as it might be.
Taxes pay for this.
Free WhatsApp calling/ messaging
On renewal with the economies of scale that is where the money is made. Like the service, get addicted then continuously renew at minimal costs and the provider is compensated for.
Free agricultural inputs
This is social responsibility to aid food security but not sustainable. It creates dependence syndrome and strains treasury. Taxes take care of the cost of the inputs.
The same applies to contract farming/free production. if I provide everything then I will pay you what I think you deserve that is pay back. In the long run it is ‘slavery’ in nature especially if contracts are not managed accordingly. It is a great initiative though.
Enjoy the service now pay later
Marketing gimmick to give you the sense of ‘I can afford this service/product’ but you get hooked. Competitions and give aways to customers are paid off by the increased number of customers buying/using the product/service.
In most cases please read the terms and condition as the devil is always in the fine print. Make sure you understand what you are getting yourself into before you make any commitments to these freebies where it involves appending your signature to it.
Please for borrowers of money do not be quick to sign, read and understand or let it be explained to you in full even in your mother language then append on the dotted line.
Since there is nothing like a free lunch there is always a catch to these free incentives.
IF YOU LIVE IN BYO PLEASE CONSERVE WATER IF YOU LIVE IN ZIMBABWE PLEASE USE ELECTRICITY SPARINGLY: SOS (SWITCH OFF SWITCHES) IF YOU LIVE ON PLANET EARTH PLEASE PRESERVE THE ENVIRONMENT.
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Morris Mpala is the managing director of MoB Capital Limited, a Bulawayo-headquartered micro-finance institution with footprint across the country.
derick.khumalo