There are few business marketing practices that have stood the test of time as well as free giveaways. Whether offering products or services, this arm of advertising is popular for a reason. It gives customers a chance to get something for nothing, and it gives a business an opportunity to illustrate their strengths to the greater market. When done right, in many ways, it can be a win-win.
With that that in mind, it’s also important to remember that this can be a dangerous game. Making an avoidable mistake, or working without full comprehension of the possible positives and negatives of a position, can put both finances and reputations at risk.
When Should Giveaways be Avoided?
One of the biggest issues with free giveaways is how nebulous the results can be in terms of costs and benefits. Larger businesses might have the ability to hire marketing firms or invest in research to accurately predict the outcome of a free giveaway but, for small to medium-sized businesses, such actions can be an impossibility.
To address this issue, it can be a good idea to look at the worst possible outcome of a free giveaway, and check whether or not a bottom-line can afford the hit. Imagine a struggling Ford garage offering incentive projects where specific vehicles purchased within a set time-frame go into a draw to be fully paid off by the dealership. In the worst-case scenario, no more cars would be sold than usual, effectively adopting an enormous financial hit for zero real monetary rewards.
Businesses also need to know that not all that glitters is gold, and not everything that is offered for free is appreciated. While this is only one aspect of the free giveaway game, it is one of the most fundamental features, which even the biggest businesses can overlook.
Take, for example, how Apple made headlines by giving away a free U2 album to iTunes users back in 2014. Apple saw this is a way to give people some of what everyone loved. Unfortunately for them, they vastly overestimated U2’s actual appeal. On top of this, the act of downloading the album automatically onto people’s devices used up room and bandwidth and messed with their shuffle functions.
In other words, just because you have the stock, doesn’t mean customers will necessarily care. Instead of such a broad shotgun approach, it’s best to narrow your sights to those who show informed interest.
When Should Free Giveaways be Used?
The most important part of this question lies, again, with the potential cost. Can a business afford the cost no matter the outcome? Then, and only then, should the business continue with this plan of action.
In the modern age, free giveaways are used to draw attention to not just a business as a whole, but also to a specific part of a business. This saw an enormous take-off at the turn of the new millennium as businesses increasingly turned to creating their own websites and, more importantly, online ordering systems.
Online ordering and interaction systems are an enormous boost for businesses, in that they free up man-hours for staff, they can handle much more traffic than direct human interaction can, and they can operate 24/7. In these instances, free giveaways tied to online ordering systems could create unprecedented leaps in productivity. Walmart was one such example of this, where already legendary convenience was raised to an entirely new level.
More recently, this has taken the form of mobile-focused ordering systems. As more users turn to mobiles for internet use, this has again pushed for fresh illumination. Again, smaller free promotions can drive engagement, and can help spread word of mouth. This can be especially useful for businesses offering smaller goods and services, as they won’t have to eat significant costs. This might not matter so much for Walmart-sized franchises, but it will for almost everyone else.
Another method, as utilized by some businesses, is to extend already common bonuses one step further. For example, some businesses, such as online casinos for example, have long offered deposit matches as bonuses for new users, to the point where these are usually standard. New casinos, trying something different, turned to giving away no deposit bonuses, effectively one-upping the competition.
Of course, this particular industry can protect itself from what is known as wagering requirements, but the general concept of one-upmanship can still apply to a wide range of other markets.
Looking From Inside and Out
Measuring when a free giveaway is and isn’t worth the effort means walking a balancing act. What works for one industry or business might not work for another, even if the two are nearly identical. Because of this, the most important part is not to get lazy, and not to make assumptions on what will work.
By taking a step back from the industry, and doing individual research on what customers want, it can be possible to gain a much clearer picture. Work for success, but protect against failure. Try something new, but observe what others have done that worked and didn’t. Remember that there is no easy solution, but performed at the right place and the right time, a free giveaway can be a business-saver.0