People love the idea of getting something for nothing. Marketers use this love of anything free to spread the word about products, find new customers, and increase sales. From free books on Amazon to free samples in the grocery store, giveaway marketing makes products free to increase sales even more in the future.
Giveaway Before You Sell
When companies introduce a new product to the market, whether it’s a perfume or a pizza, they often distribute marketing materials and free samples. They hand out products to consumers and send free coupons in the mail. They offer free coupons to people who “like” the product on Facebook.
While people may be hesitant to try something new if they have to pay for it, they’ll have wasted their money if they’re disappointed. Many people will try anything once if it’s free. If the product is good, they’ll want another pizza or more perfume. Even when the product is no longer free, they’ll come back to buy it. With this kind of marketing materials, companies target likely purchasers.
They give away free products to people who are already in grocery stores shopping or the restaurant eating, or to people who page through Sunday coupon circulars. They already know these people buy similar products, making them likely candidates to like the new product.
Free products can play the role of a loss leader in stores. Offer something free to get customers in the door, and chances are they’ll buy something else while they’re there. Penzey’s Spice Company periodically sends customers coupons for a free bottle of spice to bring the coupon to the store. Once there, the array of spices with their enticing aromas tempts people to purchase more. The makeup counter at a department store may offer a free sample of a new lotion, but while you’re picking it up, the counter clerk will also show you the new lipstick and eye makeup. Enough people buy these other products that the giveaway is worthwhile.
Sometimes a freebie gains company attention it couldn’t afford to buy. When Oprah Winfrey gave everyone in her studio audience a new car in 2000, GM received tons of press for donating almost 300 of its new Pontiac G6s. Every paper in the country had news about the giveaway and television, radio, and website coverage. An ad campaign with similar coverage would have cost more than the giveaway. GM not only got everyone talking about its new car, but it also got to be the good guy, enhancing its public reputation.