Freebies and Giveaways: The Oldest Marketing Trick in the Book

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You probably have not met anyone who does not enjoy getting free stuff. Whether it is in addition to something you have bought or if it’s something that a brand just gives away, getting a freebie or a giveaway is something that everyone loves.

But how do companies benefit from giving away free products? Well, there are many benefits that businesses see in handing out giveaways and freebies.


Increasing the Customer Base

First, this is a great way to get new customers. And if your freebies are good enough, they will turn these new customers into loyal returning ones. Small businesses often use this tactic. For instance, a new clothing label might give a discount to new customers who sign up on their website. Another industry that uses such promotions in a big way is online casinos.

Say you are a new player signing up to play online bingo at Paddy's, you might get offers like bonus money to play with as well as free spins. Getting such incentives acts as a great marketing strategy as it will often get customers to come back.

Increasing the Customer Base


Alternative Forms of Advertising

Another way in which this works is by providing non-traditional advertising. Companies that sell beverages often do giveaways in busy locations such as marketplaces. Having a few hundred people walking around with a bottle that has your branding on it is basically like having it advertised for everyone else. Moreover, if someone likes the free product you distributed, they end up telling others about it, and thus you get very effective word-of-mouth advertising.

Traditional advertising like billboards, TV adverts, print ads, etc, requires a large amount of money. On the other hand, offering products or services for free or at a discount can help businesses reach more people for a much smaller amount of money. Customers tend to lean towards products that have offers on them. And if your product is good, the customers will come back and be willing to pay full price later.

However, there is also a distinction between discounts and freebies. A study mentioned by Time magazine tells us that given the choice between a discount and getting something additional, most people choose the second option. This is because they perceive getting more as better than a discount. So, in some ways, getting something extra out of the same amount of money creates more value in the mind of the customer. And this is another reason why freebies are such a great marketing tool.

Alternative Forms of Advertising

Interestingly, if a company is giving out freebies that no one wants or it is a product that no one wants to buy when there is no offer, it tells a lot about the market. This can prove to be a cheaper way of testing a product in the market before a company spends a huge marketing budget on something that no one wants. This sort of data is gold.

Promotions guru Tom Bryant writes on Fresh Business Thinking that providing freebies is a great way to build up a valuable database of customers. Those who are requesting freebies or vouchers are the ones genuinely interested in the product. And this goes beyond just the marketing aspect of the business as this can give real insights into the development of the product itself.

Freebies and giveaways are a great way to connect with existing and potential customers. This is often the first point of interaction between a business and its consumers, and can actually be the building blocks of a long and sustaining relationship. That is why marketers will often try this technique to promote their products.

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