The idea of giving away 'free' items was one of the toughest for me to wrap my head around. I've been in sales and marketing for over 30 years and owned a small business for 6 years. To me, there are no free lunches. Somebody has to pay. So how then can you use to earn a profit by giving away free products or services?
Smart small businesses think strategically before using this costly approach to generating traffic. What is the outcome they want to achieve? How can they turn the traffic from giving things away free into a profit?
Once you determine what benefit your small business will get from giving products or services away free, the real challenge comes in. How do you ensure that the money you invested in freebies actually increases sales - and most importantly, profits?
7 Keys to Free Giveaways Boosting Profits
- Have a plan of action for those who get your freebies
- Offer to a targeted audience
- Follow up with additional invitations to buy, e.g. sale fliers, newsletter, tips
- Offer upsells
- Get customers to come back so they can see your news products and services
- Strengthen customer loyalty
- Expect most customers to take time
1.) Have a Plan of Action for Those Who Get Your Freebies
Plan out in advance how you are going to encourage prospects who receive your free sample or gift to become a customer. Some of the following points will help.
2.) Offer to a Targeted Audience
Make sure, as much as possible, that you are offering your free product or service to someone who fits your ideal customer profile. If they have no need for what you sell, you probably wasted your money.
3.) Follow Up with Additional Invitations to Buy, e.g. Sale Fliers, Newsletter, Tips
This is why getting people to join your membership program is so important. Buyers are far more likely to buy again so you want to be sure to ask them to.
4.) Offer Upsells
While Internet marketers think they own this concept, it has been a standard practice in retail for decades, if not for centuries. In fact, you have to be careful with upsells that you don't get accused of "bait and switch," which was an unethical business practice whereby the product people came to buy wasn't available or the sales people pressured them to buy a higher priced item.
5.) Get Customers to Come Back so They Can See Your News Products and Services
This was the purpose of Radio Shack's free battery card so you could see the new products you might want for yourself or for gifts every month. Starbucks has free music downloads if you stop in their stores.
6.) Strengthen Customer Loyalty
There are numerous ways to use freebies to enhance customer's feeling of being appreciated. Hotel/motel chains and airlines have frequently traveler programs to reward loyalty. Supermarkets too have programs to show their appreciation for their best customers.
7.) Expect Most Customers to Take Time
Naturally, some sales can happen quickly from giveaways or freebies and samples. For instance, impulse buyers and food court samples can result in quick sales. Likewise, you might get lucky. Otherwise, the rule of seven impressions before buying means that they won't buy right away.
To make giving away freebies a strategic business decision, you need to know what you want your small business to accomplish by spending that money. Then you need to have a plan to turn freebies into profits. These seven points cover key areas to ensure that your investment in giveaways result in profitable sales.
Smart small businesses think strategically before using this costly approach to generating traffic. What is the outcome they want to achieve? How can they turn the traffic from giving things away free into a profit?
Once you determine what benefit your small business will get from giving products or services away free, the real challenge comes in. How do you ensure that the money you invested in freebies actually increases sales - and most importantly, profits?
7 Keys to Free Giveaways Boosting Profits
- Have a plan of action for those who get your freebies
- Offer to a targeted audience
- Follow up with additional invitations to buy, e.g. sale fliers, newsletter, tips
- Offer upsells
- Get customers to come back so they can see your news products and services
- Strengthen customer loyalty
- Expect most customers to take time
1.) Have a Plan of Action for Those Who Get Your Freebies
Plan out in advance how you are going to encourage prospects who receive your free sample or gift to become a customer. Some of the following points will help.
2.) Offer to a Targeted Audience
Make sure, as much as possible, that you are offering your free product or service to someone who fits your ideal customer profile. If they have no need for what you sell, you probably wasted your money.
3.) Follow Up with Additional Invitations to Buy, e.g. Sale Fliers, Newsletter, Tips
This is why getting people to join your membership program is so important. Buyers are far more likely to buy again so you want to be sure to ask them to.
4.) Offer Upsells
While Internet marketers think they own this concept, it has been a standard practice in retail for decades, if not for centuries. In fact, you have to be careful with upsells that you don't get accused of "bait and switch," which was an unethical business practice whereby the product people came to buy wasn't available or the sales people pressured them to buy a higher priced item.
5.) Get Customers to Come Back so They Can See Your News Products and Services
This was the purpose of Radio Shack's free battery card so you could see the new products you might want for yourself or for gifts every month. Starbucks has free music downloads if you stop in their stores.
6.) Strengthen Customer Loyalty
There are numerous ways to use freebies to enhance customer's feeling of being appreciated. Hotel/motel chains and airlines have frequently traveler programs to reward loyalty. Supermarkets too have programs to show their appreciation for their best customers.
7.) Expect Most Customers to Take Time
Naturally, some sales can happen quickly from giveaways or freebies and samples. For instance, impulse buyers and food court samples can result in quick sales. Likewise, you might get lucky. Otherwise, the rule of seven impressions before buying means that they won't buy right away.
To make giving away freebies a strategic business decision, you need to know what you want your small business to accomplish by spending that money. Then you need to have a plan to turn freebies into profits. These seven points cover key areas to ensure that your investment in giveaways result in profitable sales.
