Profits are based on sales, so giving things away for free may seem counterintuitive. If used properly, however, freebies can be quite lucrative for a business. Giveaways have the potential to create a positive buzz, get customers in the door, and keep them coming back for more.
Here are some great ways freebies can benefit a company’s bottom line.
Getting People Talking
A free download only costs a company in time and manpower, yet provides a powerful advertising tool. A high-quality download helps establish a company as a thought leader in its field. Creating a unique voice and becoming a trusted expert is great for brand recognition.
Giving out a free product requires more capital, but can bring great returns. People love spreading the word when they discover a great new product. Maximize this advertising potential by providing a platform for sharing reviews on desired social media handles and platforms.
Inviting bloggers and social influencers to check out a new service for free is a great way to get the word out. It also provides an opportunity to resolve any small problems that come up with a new product launch. An influencer will be more forgiving of small mistakes when they haven’t had to pay for the service.
Bringing in New Customers
Freebies are a great way to get shoppers to try something new. Once a potential customer begins using the free product, they can be asked to pay for upgrades or extra features. This opens the door to ongoing profits for a business.
Take an online casino, for instance. Despite its continuous promotion of freebies, it is a business first and foremost. And the fact of the matter is, no business gives away things for free without there being some sort of guaranteed return. So one can think of free spins bonuses as a marketing ploy to reel in (excuse the pun) players to try their luck at one of the latest online slots that’ll eventually require them to deposit a minimum amount.
For businesses with a successful email marketing campaign, freebies can be a great way to retain customers. Coupons offering 10% off of any purchase over 50$ bring long time and newer customers back into the store. Offering something free with a purchase, such as a monogram, entices customers to check out what products you have to offer.
Freebies are also a great way to make customers feel special. It lifts the company’s image and keeps the business in the forefront of customers’ minds. To guarantee these freebies are good for the bottom line, make sure the business can afford them, and that it’s something customers want!
If a business needs to make room for new inventory, freebies for loyal customers can be a win for everyone! It not only shows appreciation, it also creates space for the next new product customers will love to own!
Avoiding Common Mistakes
A business shouldn’t give away anything for free without a guarantee of profitable returns. To be sure your business’s freebie is worthwhile, watch out for these common missteps.
- Avoid the freebie devaluation effect. This is when shoppers view free products to be less valuable and of inferior quality. To avoid this effect, associate the free product with another high-quality product. For example, giving away a free food item at a gourmet grocery store. In addition, make it clear that the item is being given away free temporarily, as a promotion to learn about this new product.
- Don’t give away more than the company can afford! Small companies have less capital at their disposal, so unless your small business has the cash to spare, don’t give a product away for free without a guarantee of a profitable return.
- Have clear expectations and measure results. Measurable goals may be to grow an email list, increase returning customers, or get more tweets on social media. Whatever it is, those goals should be tracked frequently. If the goals aren’t being met, a different strategy may be a better way to go.
- Don’t forget about the basics. Freebies are a great tool, but they are a small part of an overall marketing campaign. Knowing the market, establishing the company voice and maintaining a great website are the backbone of a successful business.
- Freebies don’t guarantee a profit for your business. Like any marketing tool, they should be used strategically and carefully. When implemented well, however, they can be a great boost to the bottom line.