Will Customers Buy the Cow if You're Giving the Milk Away for Free?

Small Business GiveawaysOnce the initial buzz around Groupon and similar services died down a bit, there were (and are) plenty of skeptics that concluded that offering deep discounts on products or services just wasn’t an effective customer acquisition strategy for small businesses. A lot of customers, it seemed, were taking advantage of the discounts but weren’t necessarily coming back.

Even so, there’s still a significant contingent of small business professionals who say that giving away products or services for free can actually grow your business. Crazy, huh?

Vertical Response CEO Janine Popick is one. Writing on Small Business Computing, she says that although it depends on the business, a free-products-or-services strategy is one that can be very effective for small businesses.

Popick uses software as an example, where free-trial versions or even full versions as free trials are common. This is a sign of confidence, Popick says, because companies feel certain that once customers use their products, converting them into sales is easier. These businesses also use a lot of reminder emails, tips and other content to nudge customers along the buying decision path, and ultimately, it all works together to close the sale.

Popick is quick to acknowledge that giving away free stuff isn’t feasible for every business. But there are other things of value you can give to prospects, including guides or how-to handbooks; white papers; checklists; and other kinds of exclusive content or tools related to your business. The more value you provide to customers who may be on the fence, the more you can influence their purchase decisions.

Ideas 4 Small Biz agrees and suggests six reasons giving away free stuff can work for your small business:

    • It can create buzz.


    • It encourages trial with no risk for customers.


    • It can be a hook to pull customers in—where hopefully, they’ll buy more.


    • It can cause customers to evaluate more generously.


    • It can boost your brand or enhance your association with well-known brands.


    • It can lead to repeat purchases.

Giving away free stuff, the site says, is no guarantee, but it’s certainly worth trying. In fact, many see it as a long-term strategy, so if you decide to try it, be sure to give it time to work.

Intuit’s blog included a post a couple of months ago that explored the how-to's of using freebies to get customers. Intuit says you definitely need a plan—and offers tips for using freebies to attract customers, as well as some pitfalls to avoid.

    • Provide samples. This helps give buyers a hands-on perspective.


    • Combine samples with a marketing push. You’re reinforcing your promise while customers are experiencing it, hopefully bringing them that much closer to buying.


    • Give away only items (or services) of value. We’re not talking about throw-aways or trinkets here.


    • Don’t dismiss the idea of a free video. This can build confidence in your brand or products.


    • Don’t give too much away. Especially in the case of giving services away for free, it can lessen their value in the eyes of prospective customers.


    • Keep your budget and time in mind. Make a solid investment but not one that you’ll regret if you don’t get the results you’d hoped for.


    • Track follow-up purchases. Knowing what’s creating longer-term customers and what’s not will help you tweak your strategy going forward.

Does giving stuff away for free make sense if your business has been around for a while? Yes, says Small Business Computing. In fact, writes contributing editor Pedro Hernandez, freebies can be an effective way to “reboot” and re-invigorate an established small business.

If you feel you need a reboot, click here to find out more.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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