How Free Services Lead to Increases in Revenue
Giving away goods or services sounds a bit counterintuitive, doesn't it? After all, it costs you time and money to offer services to others, even if just in the bandwidth used by your site. However, providing free services without expecting anything in return may lead to an increase in revenue for your business.
One of the highest levels of human interaction involves reciprocity — whenever someone gives you a gift, you feel as though you should give them one back. This type of mutuality drives business, but smaller companies often overlook mutual benefits in their marketing efforts.
Think of your free services as a "give, give, give, get" marketing model. Not everyone you offer a free service to will buy from you, and that's okay, because some will. Offering free services leads to an increase in revenue over time and examples show companies using the principle of reciprocity effectively.
1. Attract Browsers
In an ideal world, every person who visited your website or popped onto your social media page would become a customer. In real life, very few people who land on your page convert into actual leads. You have a few seconds of their attention to grab them and collect their contact information. If you offer a free service, they're much more likely to share their email with you so you can make a deeper connection later.
2. Establish Your Expertise
No matter what industry your business falls under, you must establish that you're the authority in your field. You know more than the competitors, stand out in areas others don't and you connect with your customers on a level higher than other brands in your genre.
Offering something free that ties into how much you know not only establishes you as an authority but enacts the reciprocity principle so buyers will think of you when they're ready to buy.
Wishpond establishes their expertise in matters of marketing to help promote their all-in-one platform solution. Webinars are free for anyone to watch and include topics such as "Collecting and Nurturing Leads with Your Website & Email Marketing" and "How to Get Thousands of Clients Using Sweepstakes and Contests." Wishpond doesn't ask for anything to view the webinar, but they do point out how their services help business owners grow their contact list and client base.
3. Gain Social Media Shares
One of the ways reciprocity works is when you give someone something of value, and they want to tell others about your generosity. While the person may not be in the market to buy what you offer, they are more likely to share your resources with others via social media and word-of-mouth marketing. It doesn't cost you much to provide a free service, such as a webinar or a free guide, but the results can drive traffic to your site and give you increased brand recognition.
4. Offer Free Information
For businesses where customers invest a chunk of money in your brand, offering a free quote may entice them into sharing their information and investing time in your business. If you run a service business, free quotes are often expected and may keep the competition from overtaking you.
Garrety Glass offers a free quote on their landing page. The call to action (CTA) button is larger than the other buttons on the page and invites users to "Click to request a free quote." They also offer a look at some other projects they've completed in the area in case you'd like to see some of the work they've done before contacting them for a quote.
Offering a free quote gives the user something without expecting anything in return. They may or may not buy the windows from Garrety Glass, but they're more likely to if the company spends time with them showing how they can meet their individual needs.
5. Give a Bonus
One way of enticing customers into ordering from you now is offering a bonus if they do so. There are any number of offers you can provide, including buy one get one free or additional add-ons for one of your services or products.
In one study, an author looked at the difference between offering something for free and something for a penny. He offered a chocolate kiss for a penny and then for free. The value of the chocolate when offered free was perceived as higher. The moral is that you don't have to provide something which costs your business a lot of money, but if you offer it free, it has instant value.
Whatever you offer does have to actually create value for your user. Offer something that makes their lives easier or helps them in the industry you're already in. Make sure the bonus is relevant to your business. Don't give away golf tees when you own a restaurant.
6. Try Before You Buy
Free trials are another way of attracting users, particularly if you sell software, a service or some type of food product. When the user tries the item, they're more inclined to buy it as long as it meets or exceeds their expectations. If the sample is free, they tend to think, "Why not?" Then, if the item is valuable to them, they're likely to buy.
7-11 started giving out free samples of their Slurpees on specified days and saw their sales skyrocket. The brand put no limitations on the free sample cups, other than the size of the samples. However, people could refill their cups or get as many samples as they wanted. People didn't, though, instead they purchased full-size Slurpees after tasting the treat and made other purchases as well.
7. Establish Goodwill
There is something to be said for establishing goodwill in your local community. Have a presence at a local event and give away something free to build a positive brand image. If you sell heating and cooling systems, give out hand fans at the local fair. Offer free trials of your product at a booth at a trade show. Give back to local charities.
Your brand is more than merely the products you sell, so giving something away should also reflect the values and concerns of your top executives and what you stand for as a company.
Offering something for free for a limited time creates a sense of urgency where users feel they must sample your offering and share their contact information before the offer goes away. Be careful here that you don't just say something is limited and then offer it for five years. Users don't appreciate feeling duped, so if you want to provide a limited freebie, make sure the number and period are minimal. You can always offer something else later.
Rise Above the Competition
Today's global marketplace is highly competitive. Successful businesses find ways of standing out from other brands. Offering a freebie is one way of attracting attention and drawing in new customers. Not only will you attract new customers but the principle of reciprocity will make them more inclined to buy from you in the future.