Businesses are supposed to make money. Even those that declare themselves to be “not for profit” need to make money as they wouldn’t be able to stay open for very long if they didn’t. Instead, this not-for-profit label is simply a declaration that the organisation will focus on more than just its bottom line, often aiming to serve a social purpose. For not-for-profits, social enterprises and charities, the word “profit” is often replaced with “surplus” to signify that it isn’t going to be distributed to shareholders.
This need for profit (or surplus) is because all organisations have bills to pay, whether that be wages, rent, utilities, services, or buying raw materials, so they need some cash on hand to cover these expenses.
Therefore, it can seem pretty counterintuitive to suggest to a business owner that they give something away for free. But it can actually make good business sense to do this, provided you spend time carefully planning how you will do it.
The approach you take will depend mostly on the type of business that you operate, who your customers are, and the relationship that you have with your customers. Here are some of those different ways that you could give away free stuff in order to boost your business.
Let Your Product Do the Selling
Common sales patter often contains the line “these puppies will sell themselves”, referring to the fact that the product is so good that the salesperson doesn’t actually need to do any work.
Of course, the fact that there’s a salesperson to tell you this means it’s not strictly true, however, there is some merit in letting your products do the talking.
If you are supremely confident of the product or service that you sell, then letting your customers try it out for free is a great way to drive sales.
In the online sports betting arena, we can see this practice taking place a lot. For example, many of the companies that offer sports betting in Pennsylvania offer free bets to new customers as a way to let them try out their platform.
Similarly, marketing company Mailchimp operates on a freemium model where customers can use a limited version of the company’s platform for free forever, but if they want to unlock additional features or upload more contacts, then they have to pay for a subscription.
Demonstrate Your Expertise
Your expertise is what makes you good at your job. It’s why people pay you to deliver your goods or services to them. So it can seem a little daunting to give away some of this expertise for free.
However, it can actually work wonders for you, provided you know what you’re doing.
If you operate a search marketing company, publishing free advice about how to improve the on-site SEO for a blog may seem like you’re joining the fast track to bankruptcy, but it can actually help to improve sales.
It demonstrates your expertise to potential customers who are in need of help with improving their website’s search rankings. Someone will read your guide and decide it’s too much work for them to do so they will get in touch; others will use the guide to do the job themselves. This might feel like you’re losing customers, but those DIYers were always going to be DIYers, so it doesn’t matter.
As well as helping some freeloaders, you also picked up some fee-paying customers, which is all that matters.
Remove the Risk
People don’t like spending money if they think they’re running the risk of wasting it. This might be because they’re unsure about the quality of your product, they don’t know if it will be suitable for their needs, or they think they might change their minds afterwards.
You can remove this risk for customers by offering a guarantee that you’ll refund any customer that isn’t happy with the product. Research has shown that this approach can help to increase sales by as much as 10-25% and the return rates are generally much lower than this.
Even when products are returned, you can often still resell them as “open box” for a slight discount on the standard retail price. This helps to offset the cost to you even further, making it an attractive business prospect.
