Nothing is free in life, so why should your business spend money to help others? There’s no doubt it will cost you money, and the return may not be as lucrative as you imagine. When you consider it from this perspective, avoiding freebies is a no-brainer. Continue pricing your products and services correctly and remain relevant as your company should be fine.
That’s a common attitude towards “free” marketing today. However, it’s short-sighted as there is more to freebies than meets the eye. You may have to stump up the initial investment, and there are zero guarantees, yet refusing to adapt to the times could cost you a lot of money in the long run. It doesn’t seem that way on the surface, but you shouldn’t take the following for granted as an entrepreneur.
Customer Expectations
The evolution of customers’ expectations is very interesting. A decade or more ago, the business was firmly in charge. You could tell people what they should expect and control the narrative. Fast-forward ten years and the landscape is dramatically different. Modern consumers don’t negotiate. Access to digital services is a powerful example as two billion people shopped online in 2020. If you didn’t have a classy website or app, you lost a chunk of your market share to your rivals.
Freebies aren’t necessarily as important as online solutions, but they are transforming into a formative issue. It started with butchers and bakeries offering samples to try and convert leads into sales and it has turned into businesses actively giving people rewards for doing nothing other than registering an account. Amazon Prime has millions of users since newbies can access all the services for free for 30 days. Netflix has a seven-day trial, while Spotify created a free account option years ago. However, online casinos are the undisputed kings of the freebie marketing sector thanks to the range of rewards, such as no wager free spins, no-deposit matches, and cashback, all of which put the rest of the industry to shame. To put it into perspective, the strategy means the sector is now worth billions and is rapidly becoming the number one platform for gamblers of all types.
You may not be a direct rival, but you are competing with these industries because they engage consumers and change their perceptions of what is expected. Therefore, you almost have to keep up with the times or face annoying your base.
The Cost of Free Marketing
One of the problems with a freebie is the cost involved in manufacturing and advertising the product or service. Take a t-shirt as an example. The average price of making a tee in the UK is over £8, making the process too costly to just give them away from nothing. Of course, this does ignore a couple of important caveats.
Firstly, bulk buying is used by most companies to reduce overheads, so it’s almost certain that you will have the materials. Secondly, networking is a significant part of success. You need to introduce the brand to customers and get them to pass on the news to their peers. Without a positive intro, there’s no way this will happen since 67% of shoppers leave empty-handed due to a bad first impression. The third point is critical – you get to decide what the freebie is.
Although this may not sound like it’s a game-changer, the key is to remember that the biggest or most expensive items don’t make for the best freebies. As long as there is value in what you’re giving away, people will love the fact that they receive something for nothing. A free trial is relatively unintrusive for the business, whereas customers will love access to your content. Plus, it increases the chances of them signing up after the fact.
Instilling Loyalty
There’s no getting away from the fact that modern shoppers are disloyal. To consumers, this is healthy as it stops them from wasting money. Sticking with a brand for the sake of it is lazy and leads to greater expenses.
For businesses, the key is to encourage loyalty, which is harder to say than it is to do. However, freebies may hold the answer as they give people a reason to spend with brands that have gone the extra mile. After all, customers will spend 40% more with businesses they have engaged with online. If some extra value is thrown in for good measure, there’s no doubt the figure will increase.
Loyalty is hard to come by, but it isn’t impossible to find. It’s down to the individual company to show shoppers why they shouldn’t search elsewhere.
The short answer is “yes” – businesses do need to understand the power of free marketing. It could revolutionise your future.