Everyone loves a good freebie. Hearing the words “free stuff” always gets people’s blood pumping. It brings people into a flurry to try out or get those free items. Who wouldn’t, right?
From a business perspective, giving away something for free is not a new thing. In fact, it’s seen as an effective marketing tool for businesses. It’s a good way to promote products or services, and at the same time create a steady following for specific brands.
But even if giving away free stuff is found to be effective by a lot of companies, start-ups and small businesses still hesitate to use this strategy because of the substantial upfront cost involved in this venture.
So, can this work for your small business? Let’s take a closer look on how giving away free trials or samples can be good for your business:
It makes use of the power of the grapevine.
People like free stuff, plain and simple. People are also huge fans of social media. With today’s technology, spreading news on promotions, give-aways and offerings are done with lightning speed.
Social media serves as a magnet to attract people to take part in promotional events. You can enjoy a lot of exposure by giving something of value to your patrons and entice others to take part as well.
It triggers a psychological need to reciprocate
After receiving something, we often feel compelled to give something back. This feeling is usually referred to as “the norm of reciprocity.” Marketers have found that when consumers get something for nothing, they respond by buying more or giving more back.
In a restaurant study, the wait staff brought the bill with free mint gifts per diner. The study showed that the more mints received, the higher the tip left by the customer. How the waiter delivered the bill, whether they were courteous or not, affected the tip amount given too!
On a similar note, free samples in supermarkets help increase sales, at least in part, because customers who have availed of the freebie may feel obligated to pay for the product they received for free.
Marketers have studied this phenomenon and used this undeniable fact as an effective promotional tool.
It gives risk-free experience to your potential customers.
People will likely be more enticed to try something they normally wouldn’t if it’s free and without obligation. It’s in this light that companies offer free trial periods, complimentary one-day passes, or trial classes to let potential customers experience their offerings without obligation to purchase or subscribe. The idea is to let customers try something, and if they like it, they’ll be willing to buy, and come back for more.
Doing this step though, requires careful planning, as this could also be damaging to your company. If, for example, a trial service is very satisfying, people might no longer find the need to upgrade to a paid version.
Free-trials should offer the basic features of your product or service, and make purchasing other features inevitable and appealing. Make sure that you can get out of your free offerings at some point.
It adds mystery to your product and prompts people to buy.
Seeing the sign “free gift with purchase,” even without specifying what the gift item is, prompts most people to buy. The idea of receiving gifts at no cost creates a surprise and delightful moment, that customers will remember and most likely share with others.
Having a positive experience with this type of promotion also improves customer loyalty and re-buying opportunity. Customers are more likely to support companies that offer free gifts over those that don’t.
It helps connect with customers and develop positive brand associations
Give-aways are a great way to instantly connect with customers, and if free offers are positioned correctly, you’re essentially investing in creating a positive brand recognition for your company.
Customers react positively to getting something worthwhile with no strings attached. It makes them feel happy and special. It’s this association of a positive feeling with your product that will drive them to continue choosing your product over others.
Businesses are aimed at making money, and the word “free” can still be intimidating. But the benefits outlined in this article should help you see the advantages of giving free samples to your current and potential customers. Careful study and review is still needed to ensure that the right type and amount of promotion is done, without sacrificing the company’s welfare.