The Art of Freebies: How Companies Benefit from Giving Away Products

Jan 2
12:38

2024

Nicole Seekely

Nicole Seekely

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The concept of companies giving away products for free often leaves many people puzzled. Recently, I received 250 business cards at no cost, leaving my friends baffled at my ability to acquire such a bounty of free items. The process may seem as simple as filling out a survey, but there's a lot more to it than meets the eye.

The Strategy Behind Freebies

One of the primary reasons companies distribute free samples is to lure customers to their websites. Often,The Art of Freebies: How Companies Benefit from Giving Away Products Articles users end up purchasing additional items, especially if they're on sale. This method of promotion is not only cost-effective but can also trigger a viral marketing effect. Most people who receive a freebie tend to share the news with their friends, who then tell their friends, and so on.

However, giving away free products can put a significant dent in a company's budget. To offset the cost of the freebies, some businesses resort to sponsorships. They may include co-registration checkboxes on the form or request the customer's email address to keep them updated on new products. It's crucial to keep the cost of the freebies low, even with sponsors. Typically, freebies range from 50 cents to a dollar, depending on the company's arrangement with the postal service.

Freebies as a Customer Retention Tool

Another significant reason companies offer free samples is to secure return customers. Freebies are an excellent way to generate product trials and awareness. If a user receives a product in the mail, tries it, and likes it, they're likely to purchase it the next time they see it in a store or online. Companies usually expect about 10 percent of consumers to redeem a coupon, but the request or return rate for freebies is often higher.

When asked about the feedback they receive, some companies reported an increase in response rates from 5 to 50 percent. The number of requests can vary from day to day, depending on who discovers the freebie. If a large newsletter publisher hears about an offer and publishes it, the company can expect an influx of requests.

Other Reasons for Offering Freebies

There are also other reasons or ways of offering freebies. For instance, Girl Power!, a national education campaign developed and supported by the U.S. Department of Health and Human Services, gives away free materials because the government recognizes their benefit to the American public's health. Many other U.S. Government organizations also provide free materials.

Most companies that give away freebies don't anticipate the high response rate they receive, and often, they can't afford to give away all of their freebies. Freebie hunters can help by only requesting items they are genuinely interested in. Unethical practices, such as providing incorrect email addresses or other information, can hinder the marketer's ability to afford to give out freebies. If you don't want to be added to a company's mailing list, it's best not to request the freebie.