The Value of Giving Items Away for Free

February 23, 2011

Be it samples at the makeup counter, bite-size desserts at the deli, or tchotchkes at conferences, there’s just something about getting a trinket or service for free that agrees with the human spirit.

In fact, digital technologies, including social networking and email sites that need not be named, seem to have built their very existence on a “freemium” business model.

Offering something for nothing gives a company three important things, according to Bob Bly, copywriter and owner of the Center for Technical Communication:

  • It builds an organization’s reputation.
  • Creates a feeling of obligation
  • Builds a company’s relationship with future prospects.

For example, say a company is giving away information for free. That gesture can help build the organizations’ reputation as an expert in a specific field. “If you give away a special report like the one I got recently from someone, 52 Tips to Improve Your Radio Advertising, it makes me think of her as a really knowledgeable radio advertising expert,” Bly says.

Freely giving things away can also generate an automatic feeling of reciprocity.

“They feel more predisposed to do business with you because you gave them something for free,” Bly says.

Think of how inclined you are to shop online if the website in question offers free shipping.

And, as is often the case when companies give out free stuff, it increases response rates to their marketing efforts. “If you market by email, direct mail, telemarketing, if you offer something free in exchange for either a purchase, a lead, or an inquiry, you’re going to get more responses,” he says.

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Bly offers free stuff in his own business. For instance, to build his e-newsletter subscriber list, he offered four free special reports to anyone who signed up for the e-newsletter, a retail value worth $100. “That doubled or tripled…the conversion rate of traffic to that page,” he says.

Not only does Bly use the free lure professionally, he’s not immune to its appeal personally. “One of the most interesting things that I saw was from Advertising Age. It’s a paid circulation. You open the mailing and there’s a color slick sheet with a picture of a coffee mug and written across the coffee mug it says, ‘Bob Bly wins marketing genius of the year award.’ They personalized it. And if you subscribed, they would send you the mug in the picture. That was really clever and very successful.”

He said if he wasn’t already a subscriber, he probably would have been after that promotion.

And giving things away for free is here to stay. In a January 2009 article in the Wall Street Journal Chris Anderson, editor-in-chief of Wired magazine and author of Free, said, “The psychological and economic case for it remains as good as ever…free has as much power over the consumer psyche as ever.”

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