Promoting your business and gaining more customers by giving away freebies may seem like a harebrained selling tactic, especially if you have just started your business. But the marketing tactic works—if you know how to do it properly.
If you’re selling a service, you can give freebies by including no-charge items on invoices, which you can read more about here.
As far as freebies go, it’s worth acknowledging that there’s an inherent danger of bundling items together and appending the term “free” in the bundled package. Researchers have identified a phenomenon they call the Freebie Devaluation Effect, whereby individual products previously sold in a freebie-inclusive bundle are viewed by shoppers to have low quality. To avoid the freebie devaluation effect, you must make it clear that you simply want more people to become familiar with the free item (and the fact that it isn’t always free).
Since many customers may be inclined to blog about or socially share their experience, your “free” service may be a gold mine for word-of-mouth recommendation opportunities. Free services are a great incentive for people to refer your services to someone. Everybody loves sharing great apps, restaurants, movies, etc. when they discover them, so use that to your advantage. Including “no charge” items on your invoices as mentioned above is a great way to prove your value and end each transaction by leaving a good impression on your customers.
So how do you strike a balance between being able to promote your business with freebies and making a profit?
When to Avoid Giving Freebies
If offering freebies is something that you cannot afford, just resist the temptation to do it. Refuse to give in even if that person promises to be a loyal customer after receiving a free sample. Unless there is a guarantee of a profitable return or at least the strong potential for referrals, don’t do it.
What to Expect
You should get something in return—either a clear long-term sales prospect or a major boost to your company’s profile. Freebie marketing is supposed to be a barter—think of Starbucks providing free Wi-Fi access to encourage more customers to enter its stores.
Something else to factor in: does the person you’re working for have a strong social profile? Do they have plenty of followers, Likes, etc.? Is your service going to be publicized by a blogger who is considered by others as an industry expert? If yes, we don’t have to tell you to do a spectacular job and let them know how much added value your work included. If you’re not sure, be careful and don’t blindly give away freebies that could strain your company’s resources.
The Bottom Line
The promotional value of offering freebies must always be balanced with what you can afford to offer. The smaller your company, the more difficult it is for you to go on a freebie giveaway for marketing purposes. So if you foresee that the return will be small or nonexistent, then avoid giving away your efforts for free.
What do you think—have you included free services or giveaways? Did it help or hurt your business? Please share with us.
About the Author: Steven Burns, FAIA, spent 14 years managing his firm Burns + Beyerl Architects. After creating ArchiOffice®, the intelligent office, project management and time tracking solution for architectural firms, Steve brought his management expertise to BQE Software, where he is perfecting the business strategy and product development.