free

While I was at a ComicCon in 2019 (yes, I’m also THAT kind of guy) I’ve witnessed a rush for freebies from the thousands of people present. Every youngster was just taking free stuff and only seldom buying from the merchants. I’ve approached several stores I have good relations with and asked them why don’t they engage more with the customers when they come for freebies. Why don’t they make giving out freebies a marketing tool they could use in the future. Just giving away free stuff without a future result (or an uncertain one) is not good business.

In 1887, Coca-Cola distributed the first-ever coupon. Little did the company realize how important the concept would be in shaping the future of commerce.

With the Coca-Cola voucher, recipients could redeem one free glass of Coke at any dispensary. Coke, which was introduced a year earlier, benefitted from this marketing strategy, as it encouraged both consumer and vendor adoption.

According to Coupon Sherpa, “Between 1894 and 1913, an estimated one-in-nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895, Coca-Cola was being served in every state”.

“Free stuff”, “Promotions” and “Discounts” are always looked after by clients

As shown in the survey below, there’s no doubt that e-commerce customers are highly influenced by promotions.

Hawk Incentives found that 97% of consumers (eCommerce and otherwise) say they look for deals as they shop—with 92% saying they are always on the lookout for promotional offers. Backing this data up, PRRI found that 92% of consumers used a coupon or otherwise took advantage of a discount or offer in 2017. The world has definitely changed since 2017, but the clients’ appetite for discounts and freebies will never disappear.

Check out Google Trends on some terms like “Free stuff” or “Discounts”.

While there are plenty of forms of promotions, like vouchers, sales, sweepstakes, competitions or lotteries, we find that offering free gifts with a purchase, or any promotion over a certain threshold, works especially well, creating a perception that the customer is getting something for free.

Why does “free” work?

The power of “free” is both surprising and irrational. In a Marketing Science Journal study, scientist Dan Ariely noted that “People appear to act as if zero pricing of a product not only decreases its cost, but also adds to its benefits.”

Essentially, and against all logic, customers feel they are getting more of a bargain when they receive something for free with their purchase than when they get a discount on that purchase, even when the free gift is worth less in monetary value than the discount they would get. From a retailer’s perspective then, it’s cheaper, and also creates a perception of more value, to give away a free gift than to offer a discount.

Free stuff sounds great on paper, but more than likely, you have already run a few quick calculations in your head and determined that there’s almost nothing you can give away for free while still turning a profit. After all, we’re in the business of selling stuff online to make money, not lose it. But, you can give away free stuff and actually generate real profits because doing so offers simultaneous benefits:

  1. It increases marketing power.
  2. It establishes customer trust.

Earn new (potential) customers

Don’t think of giving away free stuff as a loss-making exercise. Think of it as earning an opportunity to reach out and build relationships with new and existing customers. Unlike traditional marketing and advertising, though, when you give away free stuff, you also build trust by delivering something of value to the customer first.

Snippet from a POD newsletter

In the case of this Print on Demand (POD) business, they run DAILY campaigns on Facebook offering freebies IF they like the promoted posts and the clients can increase their chances in receiving a free t-shirt if they share. The engagement on most of their sponsored posts are generally very good. They also do daily eMail marketing where they present their new tees and also offering free ones – an incentive for them to open the mails.

Hundreds of comments and reactions in the hopes they will win FREE stuff

Giving away stock that requires little to no cost

Giving away stock that requires little to no cost creates a great marketing hook. Think along the lines of giving away an awesome free gift for any customer that purchases more than, say, $100.

Instead of offering a discount on the entire cart, maybe pick the smallest item and give it to the customer for free. That way, customers get something they actually want (because they chose to add it to their cart) as their freebie. This could be even more effective than offering a cash-value discount (in terms of having a lasting impact in the mind of the customer) and might actually save you money.

For example, picking a $6 product from the customer’s basket and giving it away for free costs you less than offering a 10-percent discount on carts of $100 or more. This can be especially effective for retailers selling on Amazon, as there is plenty of scope to sell bundles of products on these larger, third-party platforms. All you have to do is market one of the products in the bundle as free.

Offer free help

Sometimes people don’t know what they want or don’t quite know they want THAT particular item in their lives. And you’re there to help them.

Optometrists, for example, could offer free eye tests and, if it turns out a customer needs glasses, they can sell their products as the solution. Depending on what you’re selling, there might be an opportunity to help customers online with some sort of analysis, and then use the value you provide as a lead-capture tool that draws them into the sales funnel.

Offer a free digital service

Like an eBook, for free, on their eMail. You can give an already written eBook as a gift, in form of a voucher to redeem on Amazon.com, for example, OR try putting together a beginner’s guide that helps people understand and use your products better. Another is to create a big list of ideas that will inspire people to buy what you’re selling.

Remember, you’re in control of what goes into your eBook. If you think customers might be interested in ordering goods and services from your store at different points in the eBook (e.g., at the end of a chapter), there’s nothing stopping you from putting in a link to let them check out immediately with one or more items pre-populated in their cart. Not only that, but eBooks integrate well with other marketing activities (like growing an email marketing listgenerating passive income, widening the sales funnel, etc), so there are a host of knock-on marketing benefits to publishing great downloadable content.

Offer free product samples

There are plenty of benefits in offering free product samples. Raise awareness on your products, create reciprocity (read more about this great sales hack here), get feedback and reviews, thank existing customers, enhance your social media presence, make shoppers feel more confident.

What’s your promotions strategy? Have you given away freebies? Let us know in the comment section below.