9 mins read

Give First Economics – Part II

The next economic revolution

It is better to give – and companies are using that fact to thrive.

Given any market where there are five to ten major brands, two-dozen minor brands and a store label to choose from, each with specific models, features and prices – how is it that some of them sell strongly, some limp along, and others just fail? The classic theorists will answer “supply and demand”, others will chime in with market facts and figures, but most will miss the simple answer that is easy to understand – the successful ones give first.

I’ve previously discussed Give First Economics from a personal perspective, and this article will explore it from the point of view of a business. Successful businesses give value first – and make strong, lasting relationships based on it.

That’s a powerful statement, and the foundation for the material that follows.


Businesses live to meet demand

We can discuss semantics all day long, but in a free-market economy, every business is meeting some sort of demand with some sort of supply. The thing supplied may be tangible goods or services, or it may be information and advice. Without the demand, the business will not remain viable, and without the supply, the demand will look to be filled elsewhere.

Adam Smith is credited with formulating the classical description of this mating ritual with “The Wealth of Nations” in 1776. Since that time we have grown any number of buzzwords like “Keynesian”, “supply side economics” (“Reaganomics”), and “Trickle down”. We’ve examined how demand factors into things, what role the government should have in creating the supply or stimulating the demand, and even how the playing field might be “evened out”.

Those theories are just as valid today, but they don’t go far enough in explaining why we like to do business with one store, and avoid a similar store that is more convenient. What we need is a reevaluation of the selection process to understand the strength and power of giving value first to succeed in business.

Don’t take my word for it…

This theory isn’t built on what should or could affect the marketplace, but on how successful companies are working today. Why do some succeed while others languish?

It is absolutely true that supply, demand, and execution are integral to any business venture. Nothing written here takes the place of a sound business model. (And if you think otherwise, I’ve got some seawater I’d like to sell you along the Atlantic coast…-) But if you want to consider which of two similar companies will thrive and which will not, consider some successful examples:
Oprah gives away a variety of items – even cars, Dr Phil gave a ton off things out on his 2005 holiday gift show, Wegmans gives out samples and recipes, Jeffrey Gitomer gives away selling advice, magazines like Information Week and Disaster Recovery Journal will give subscriptions to qualifying individuals, Enfamil will give you a free diaper bag with samples, and a Culligan dealer will give you a free water analysis.

All of these examples show businesses and organizations that want to establish a relationship with you and they are willing to put the value out in front for you. And put it there first, without any commitment from you.

It doesn’t even have to be something that you can hold on to. Most lawyers will give you an initial consultation for free, contractors will bid for projects for free, and most churches don’t charge anything to walk into a service.

It works

From wine tasting to hospitality suites to tickets to a ball game – companies give to influence buyers and decision makers. The expectation is that in the long run, they earn more back from strong relationships with the consumer and future sales.

Every store must manage products, space, cost, staff, promotions and more just to stay in business. The ones that can offer more “value” to the consumer (across all of those factors) will gain a better relationship with consumers. “I shop at XYZ because they always have what I want” or because “the prices are fair”, “the items are always fresh”, or even “the staff is friendly and helpful”. Certainly every organization has a desire to meet these goals, but not every one will.

And it works at all phases of business

  • So you’d like to get consumers to try out your widget. So what if the marketplace is already crowded with fifteen other choices – yours is better or cheaper. You’re going to have to get others to try it – with a free promotion perhaps. (After sampling our cookies, you won’t want any others) Maybe you want to give away the shaver to sell the razor blades, or offer samples of your product, or a month’s membership for free, or a preview of your film, or a progressively discounted price… All of these things tempt the consumer to try you out – without a great deal of effort or expense.
  • Well, you’ve done it – your product is carried at every outlet in your market, but you’d like to gain a more loyal following. Perhaps you can improve the product or lower the price. Or have you thought of an improved experience with the product through personalized care, a kid friendly promotion, or perhaps free nuts or popcorn? (salty of course) Each of these things develop and foster ‘brand loyalty’. They offer the consumer one more tie to your product, one more reason to choose you (consistently) over an alternative.
  • And don’t forget the trend followers; the portion of the marketplace that takes a new product only after everyone else has done so. They want to hear words like “everyone else has tried it”, “all the kinks have been worked out”, and “Millions Served.” You can tap into this part of the market by giving them the thing they’re looking to receive – piece of mind. They don’t have to “guess” or “try” – they know they will get what they expect.


Giving first is not a mechanism to bribe. Any “gift” that comes with strings is probably not a gift, and more likely an attempt to coerce a decision maker or otherwise manipulate the situation. Providing an all expense paid trip to the decision maker at the XYZ Corporation to close the deal is not the same as handing out samples at a conference. (Though with reports from across the world, the former happens much too often)

Give First Economics for your business.

What can you offer that will be perceived as something of value?
Samples of ice cream? Free estimates? Advice on how to prepare a home for sale? A special event? A ride to where you need to go after leaving your car?

Some things may have a cost for materials, others in time, but the offering of them differentiates the options for a consumer. If I can join a gym for 4 weeks without committing, I can see how nice the facilities are, how friendly the staff is. If I’m looking for someone to help sell my house, and one of the potential agents shows me how to arrange things so that it will sell better, they will stand out over the others.

If a company can “give” those exposures away to more and more people, they will succeed.

To put a face on this, consider the number of successful companies, products, and people in the world. Is there a company that you don’t hesitate to buy from? A product that you knowingly pay a premium for? An associate that you regularly work with because you know what they are capable of?

Think for a moment about a company / product / person that you knowingly choose over a more convenient alternate, because you prefer the service, quality, speed, or history of ‘always getting it right’. I’d like it if you could share that experience here – if only to show that these kinds of relationships are worth striving for.

I’ll start the list with one – there is an ice cream place (Brusters) down the road from my house that serves their own creations like “pumpkin cheesecake” in October. They offer free small cones to youngsters shorter than a certain height. Yes, they are a bit more expensive than some of the others, but I know that they will serve the best possible product to me, and so I go there.

Where do you turn without question – and isn’t it because of the value you have received?

3 thoughts on “Give First Economics – Part II

  1. Howdy,
    I love your 2 articles, (give first economics 1 & 2 ) and I would like permission to use them on my website.
    I would also like your feed back on my site, if that is ok with you?
    I have a link to your article already, on the front page.
    What do you think?

    warm regards
    Graham Hyndman

  2. Hello Steve – within the last couple of weeks I read “Banker to the Poor, Micro-lending and the battle against world poverty”. Dr Muhammad Yunus not only founded the now highly successful Grameen Bank based on his demonstration that give-first economics works in Bangldesh and other quasi-impoverished economies. (We even have banks founded on the social-consciousness principles profiting financially and morally in U.S. neighborhoods.) He was awarded a Nobel Prize in Economics for his “discovery” that Giving with respect and trust is repaid in kind.

    It seems plausible that through recognitions such as he demonstrated and that you have eloquently articulated humankind has the opportunity to eradicate poverty early in this twenty-first century.

    Thanks & All the Best – Rusty

  3. Thanks for the kind words Rusty.

    I don’t know that poverty can ever be eliminated, but we can surely do better than we are today.


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