Marketing 101: Free Gifts As Alternatives to Giving Discounts
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Marketing 101: Free Gifts As Alternatives to Giving Discounts

Discussed in this topic are marketing techniques that could significantly increase the number of sales without resulting to discounting your products.

Giving sales discounts generally increase sales. But if giving discounts is not your thing, there are alternative ways to increase sales that do not require you to give discounts. They are as follows:

  • Free gifts (or nearly free gifts)
  • Prizes
  • Emotional benefit (image)

(Image by: Master isolated images)

Giving Free or Nearly Free Gifts

To be offered something free is one of the more pleasant things that can happen. In advertising terms, this usually means one of two things: either a free product so we can try it to see if we like it; or a free gift if we buy a specific item. Rewards often include some costs, thus the words “nearly free”. Though some may say that there’s no such thing as a free lunch, most customers often appreciate the straight forward nature of a free gift.

When giving away free products it should either:

  • Create a better value for money package (like bonuses bundled with the product purchased); or
  • Give free trials

Giving people free trials is very important. It is more than offering interesting rewards as part of another promotion; it is providing an opportunity to drive your product forward. Giving products away may mean a real sample to use. In others, it might be all about free trial of a service (like membership sites) for a limited period. In giving free trials, you can either decide on two possibilities:

  1. Providing the full-size product/service (complete features)
  2. Providing sample sizes (incomplete features)

Full-size products are more expensive to give away but clearly are highly impactful. Providing sample sizes (or limitations in the functionality of the product) gives the client some sort of anticipation or excitement in buying the full-size product. Giving trials could further be classified into two:

  1. Completely free trial – this gives the customer the capability to try the product totally free of charge.
  2. On approval – this is an offer where the product or service can be tried at low risk. The usual arrangement is that the customer can try the product for a certain fee. If the customer does not like the product, the customer can either return the product or cancel the service. The catch is that the customer has to return the product at his/her own expense. If the cancellation date is missed, the customer is stuck with the bill and should pay it entirely. This is completely legal and ethical as long as the terms are clearly stated to the customer.

*Tip: The customer should keep track of the deadline of cancellation so as not to miss it just in case he/she wants to return the product or discontinue the service.

(Image by: digitalart)

Advantages of Providing Completely Free Trial

  • Affirmative buyer reaction
  • Increases goodwill
  • Easy client participation
  • Strong customer motivator
  • Rapidly drive purchases

Disadvantages of Providing Completely Free Trial

  • Expensive
  • Could be a complete waste if the wrong audience (niche) is targeted
  • Tends to attract pure bargain hunters that have no intention of buying the product

Advantages of Trials on Approval

  • Allows consumers to make up their minds on intricate or expensive propositions
  • Shows there is nothing to hide
  • Sometimes draws applicants who would have declined under a free trial program

Disadvantages of Trials on Approval

  • Bargain hunters may apply for the trial period only
  • Products that are returned may be damaged (for non-digital products)
  • Could be annoying for customers

Free Items

Here, a customer is rewarded with a special gift (which may also be called a premium), for buying your product. A gift is always nice to get and increases the value of the product being sold. They can be broadly classified into two:

  • Free gifts bundled with the product (like the case now in internet marketing)
  • Sendaways/premiums that need proofs of purchase

Advantages of Free Gifts Bundled with the Product

  • Perceived value can increase up to three or four times the actual value of the product
  • The product sold will look more striking and marketable
  • Fresh and unique
  • Can highly tempt customers to buy the product because of the bonuses that come with the product
  • High incremental sales

Disadvantages of Free Gifts Bundled with the Product

  • Providing bonus items may be expensive
  • May cause packaging difficulties (for non-digital products)
  • Gifts may be wasted on customers who do not want them
  • Risk of pilferage (for non-digital products)
  • Difficult to find items that appeal to all users

Advantages of Sendaways(for non-digital products)

  • Can provide a premium of higher value as the budget is carried over more packs and not everyone will take up the offer
  • Can drive loyalty to the product
  • Novel and unique

Advantages of Sendaways (for non-digital products)

  • This way of providing gifts is not that popular with customers
  • Redemption is difficult to forecast
  • Mostly appeals to existing users

(Image by: Stuart Miles)

Points/Collector Schemes

These schemes reward the customer with certain number of points depending on the purchases made. In this day and age, points are given electronically by the use of cards. The most common example is a credit card company giving points to customers for every purchase they make. This type of scheme can temp the customer to buy more items due to the fact that they can earn points by purchasing. The points accumulated can in turn be redeemed for special items.

Advantages of the Point Scheme

  • Can build customer loyalty
  • Can offer a wide range of rewards

Disadvantages of the Point Scheme

  • High spending required to qualify for rewards.
  • Not easy to opt out once committed

(Main image credit goes to: pixbox77)

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Comments (1)

I shy away from free or nearly free offers, they always seem to have large strings attached! Voted!