A Practical Guide to Free Samples, Free Trials and Free Promotional Offers

So many businesses these days seem to incorporate a "give something away" component to their marketing plan that such benevolence seems obligatory.  And, in truth, free gifts can be a very practical way to turn "suspects" into "prospects" and customers. For example, School for Startups lets people attend some of our events free online at S4Stv.com for just this reason.

But free samples, free trials, free promotional offers are beneficial to a business only as part of a well thought out marketing strategy.  If you don't take time to ensure that what you offer free will quickly lead to paying customers, your freebie will become nothing more than an expensive mistake.  This article reviews when and how to know if giving something away free makes good financial sense.

Why give anything to anyone free?

No one knows if they like a brand of cookie or a new soft drink without tasting it.  One can't really determine if a new accounting package is easy enough or full featured enough to use without trying it out.  One might not want a new credit card, but the prospect of 0% interest for a year and a free balance transfer might well make getting one financially rational. These are all good examples of times when "free" works to turn prospects into customers. The free sample is actually required to close the sale because it proves the value of whatever product or service you are providing.

Offering free leashes or collars to customers of your dog walking service, giving coupons for a free car wash to local customers of your car detailing service and offering a free meal to regular visitors to your restaurant, are all good examples of freebies being used to cement customer loyalty. In most cases, the easiest sales you will ever get will come from the customers you already have.  Since repeat sales to existing customers are so profitable, you usually have a little extra money in the mass of their transactions to invest a little in keeping them happy.  A free gift that enhances the value of what you provide them makes sense in this context. It is also worth remembering that the happiest customers often turn into the best advocates and salesmen for your enterprise.  Unsolicited recommendations from happy customers are the most effective form of advertising in the world.

Free matches, free pens and free pocket calendars offered to customers at no charge make sensible promotions because they often get transferred from one person to another.  This can generate enhanced brand awareness and new contacts quickly.  If you find a box of matches for a new Greek restaurant in your conference room after a meeting breaks up, you are likely to remember that there's a new Greek restaurant near by.  By the time you've seen three or four boxes from the same location, you'll probably even remember the name.

These are all good example of when free works well as a marketing technique.

When is free gift an expensive mistake?

There are several ways to tell when a free offer or promotion is a big mistake.  Your free sample, free trial or free promotion is a bad marketing tool if:

• The only reason people use your product or service is because they get it free.  
• The cost of delivering the free "gift" is so high that offering it dramatically cuts into company profits.
• The freebie becomes valuable in and of itself to those who will never become customers.
• The free gift actually results in fewer sales because the sample is so unsatisfactory.

When something you are giving away free does not almost immediately result in increased revenues, it should be abandoned as a promotion. 

Looking for More Practical Advice on How to Start and Run a Profitable Business?

School for Startups offers new face to face and online events every month, and post new articles almost every day.  You can learn more about us by visiting www.schoolforstartups.co.uk or following us on twitter at @s4s.  You can see video from one of our live online events at S4Stv.