Profits are based on sales, so giving things away for free might seem counterintuitive. If used correctly, however, giveaways can be very lucrative for a business. Freebies have the potential to create positive buzz, attract customers and keep them coming back for more.
Here are some great ways giveaways can benefit a company’s bottom line.
Get people talking
A free download only costs a company time and labor, but provides a powerful advertising tool. A high quality download helps establish a business as a thought leader in its field. Creating a unique voice and becoming a trusted expert is great for brand recognition.
Offer a free product requires more capital, but can bring great returns. People like to spread 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 spread the word. It also offers the possibility of solving small problems that arise during the launch of a new product. An influencer will be more forgiving of small mistakes if they didn’t have to pay for the service.
Attract new customers
Freebies are a great way to entice shoppers to try something new. Once a potential customer starts using the free product, they may be asked to pay for upgrades or additional features. This opens the door to continued profits for a business.
Take an online casino, for example. Despite its continued promotion of gifts, it is first and foremost a business. And the thing is, no company gives things away for free without some sort of guaranteed return. So free spins bonuses can be considered a marketing ploy to entice (excuse the pun) players to try their luck at one of the latest online slot machines that will eventually require them to deposit a minimum amount.
Build consumer loyalty
For businesses with a successful email marketing campaign, giveaways can be a great way to build customer loyalty. Coupons offering 10% off any purchase over $50 bring long-time customers and new customers back to the store. Offering something free with a purchase, like a monogram, entices customers to check out the products you have to offer.
Gifts are also a great way to make customers feel special. This enhances the image of the company and keeps the company at the forefront of the minds of customers. To ensure 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, giveaways for loyal customers can be a win for everyone! This not only shows your appreciation, but also creates space for the next new product that customers will love to own!
Avoid Common Mistakes
A business should not give away anything for free without a guarantee of profitable returns. To be sure your company’s gift is worth it, watch out for these common missteps.
- Avoid the devaluation effect of free. This is when buyers consider free products to be of less value and lower quality. To avoid this effect, combine the free product with another high-quality product. For example, giving away free food at a delicatessen. Also, make it clear that the item is temporarily free, as a promotion to learn more about this new product.
- Don’t give more than the company can afford! Small businesses have less capital at their disposal, so unless your small business has money to spare, don’t give away a product for free without the guarantee of a profitable return.
- Have clear expectations and measure results. Measurable goals can be develop a mailing list, increase the number of loyal customers or receive more tweets on social networks. Either way, these goals should be tracked frequently. If the goals are not being met, a different strategy may be a better solution.
- Don’t forget the basics. Giveaways are a great tool, but they’re only 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.
- Gifts do not 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.