You are here Giveaways: Sound Strategy or a Waste of Resources?
I believe everyone loves to get something for free. But does it make sense to do giveaways or promotions? This is something that every business owner struggles with from time to time. I routinely get offers for a free iPad, free software, product samples or a trial membership. Pay attention to this last one because it is hard to get off the list when that trial membership automatically signs you up after thirty days.
The practice of giving away something for free has escalated to the point where people expect these freebies without ever thinking about the fact that someone had to design something, make it, build it , buy it and market it. So should you consider giving something away as a sound business strategy? Maybe yes… maybe no. I think there are a number of questions to ask yourself before you consider a giveaway.
First, will the giveaway actually get you more business and entice customers who might never think about doing business with you to try you out. Be honest. Will it drive repeat business or just give you a temporary bump in revenue? Will it get someone into your store or operation where you might benefit from additional sales?
Second, what do you give away? Is it going to be something valuable enough to drive interest? Is it related to your core business? Will it drive future sales because it will cause someone that might not be your traditional customer to experience your products and services?
Third, who is eligible for the giveaway? Is it a new customer or a way to get existing customers to try new products or services?
Finally, when do you give something away? Be really careful here. If you choose to do a giveaway when you are really busy you may not be able to accommodate all the work that occurs with the promotion. I also generally recommend putting a reasonable time on redeeming the offer.
One thing to note, giveaways are not just for retailers. Service businesses can also benefit from using them. Think about what you might be able to offer. Can you provide an initial consultation at no cost? Can you present a mini- workshop or class? Can you do an audit of a business’s equipment or technology needs to suggest cost savings?
Here’s something that many business owners fail to consider. What you know… the knowledge that you have gained from running your business can be a differentiator. Today, knowledge can set you apart. I am not suggesting that you give away trade secrets or proprietary information. But, if you can help a potential client see the value of your services by sharing some tidbits of information you have a greater chance of bringing them into your client portfolio.
As an example, my company recently offered to giveaway three media training sessions in a Facebook sweepstakes. Our goal is to identify companies or organizations that need that service, offer them a high quality seminar and hopefully introduce them to us and the many services that we offer. Will it be a successful giveaway? I hope so. But, if not the time invested will not be a significant burden. I’ll consider it a business development effort. I’ll be sure to pass on the results and any lesson learned in a future post.