If your business currently offers free products and services to new and existing customers, you already understand the value of this marketing strategy. If you think the concept falls somewhere between silly and total insanity, this article may change your mind.
Free offers, sometimes referred to as a loss leaders, are an enticing way to draw attention to your business. With thoughtful planning and a sensible approach, your phone starts to ring, your website traffic increases and more customers visit your store to take advantage of the offer. Before you jump in and start giving away the farm, consider the following guidelines when creating your giveaway promotion...
1. Offer a product that you manufacture or resell to keep costs down. In your offer, you advertise the full retail value of the free product. In actuality, you are only out of pocket for the cost to make the product or the cost to buy it at wholesale prices.
2. Advertise a service that you normally offer for free and publish its full value in your ad.
3. Consider using the €buy one get one free' strategy to partially recover the cost of giving away free products and services.
4. Advertise the date your promotion expires, making it obvious to the customer that they must act quickly to take advantage of your offer.
5. If you expect a very favourable response to your offer, you might consider adding the words €while supplies last' in your ad.
Giving free products and services to customers is only a good idea if you have high repeat business. It is an ideal strategy for restaurant owners, hairstylists, automotive tune-up specialists and other similar high-volume, high-traffic businesses. If you are a roofer or painter, the strategy is not recommended. It would be more sensible to offer a free inspection to attract new customers.
The goodwill created by giving customers something of value for free helps them to remember your business when they are ready to buy. If the customer returns to your website or store repeatedly, the long-term business more than pays for the small cost of free product or service they received. Calculated over a year or more, the sales and profitability from repeat customers can be substantial.
Still not convinced it is a good idea? Perhaps you can think of it as a part of your advertising budget. You need to spend money to attract new customers and repeat business from existing ones. In the long run, using a smart approach to offering freebies may actually cost less as compared with online and print media charges.
The good news is that most people are creatures of habit. If you give them good quality, value and service, it is unlikely that you will lose their business to a competitor. They will continue to shop on your website or in your store. This is especially true if you develop a rapport and excellent business relationship with your customer. Make them happy and they will keep making you happy by purchasing often and recommending you to their friends and associates.