How Free Giveaways Can Boost Your Power Sports Revenues

By David Carleton

Offering free giveaways to prospects and customer is a powerful business building strategy that can result in a flood of new and repeat Power Sports customers.

It may seem counterintuitive to give away your products and services to build your business; however, people can’t resist the lure of receiving something for free. The word free, as worn out as it may seem, is still the most powerful word in marketing and has a hypnotic effect on people.

Why Free Giveaways Work

The reason free giveaways work so well is two-fold. First, prospects that test your product or service risk-free will hopefully recognize its value and continue purchasing what you offer. Or even better, your prospect will get “hooked” on your product or service and won’t be able to live without it.

Second, the fact that your product or service was given to your prospects as a free gift will compel them to return the favor by continuing to purchase from you. This principle is called the “Law of Reciprocity,” which simply states that people naturally feel an obligation to return favors as a way of expressing their thanks.

The Law of Reciprocity works! For example, the Disabled American Veterans organization reports that its simple direct mail request for donations produced a response rate of 18%. But after they started giving away personalized mailing labels to potential donors their success rate nearly doubled to 35 percent. It worked like a charm.

Know Your Total Customer Value Before Giving Freebies

The key to safely offering free giveaways is to know your “total customer value.” This is the amount of profit you will receive from your Power Sports customer over the total length of your relationship. This figure not only includes business that you will receive from your customer, but also any referrals you may receive from them.

For instance, let's say that you compute your average “total customer value” to be $5,000. How much money would you be willing to invest in free giveaways to acquire a new customer? $20? $50? $100?  

The answer is "yes" to all of the above. Why wouldn’t you invest $20 to gain $2,000 in profits? Coincidentally, this is why most small business owners are nervous about offering free giveaways. They don’t understand the principle of “total customer value.”

Information – The Ultimate Free Giveaway

Ideally, it’s best to offer free giveaways that are low cost but have a high perceived value to the person you are giving it to. Information is a great example of a free giveaway that has a low product cost and a high perceived value. This is why it’s smart for small businesses to use special reports containing “insider” information as a free giveaway for new customer lead generation.

Your special report could be a written document, an audiocassette, or a video containing subject material that your target market would be interested in. Videos and DVDs especially have a high perceived value. Go onto to half.com, eBay or google and type in special interest videos.  You'll find a host of options available at costs as low as $3.00.

Here are a few examples of what's out there...

“Basics of Better Bass Fishing” – 57 minutes

“Advanced Trolling for Saltwater Fish” – 60 minutes

“Fishing Bloopers” – 60 minutes

“Successful Fly Fishing Strategies” – 102 minutes

The list goes on. There are hundreds of useful videos that you can give away as a premium to lure customers to your store.

Giving away free informational videos can turn a mediocre offer into a valuable and compelling offer.

Free Giveaway Case Studies

Free Giveaway Case Studies

There are a myriad of ways to offer a free giveaway and many effective types of giveaways (other than information) that small businesses can use to attract new and inactive customers. The following are a series of case studies from different small businesses demonstrating how each uses free giveaways to build their businesses: 

Case Study #1 – Health Club

A health club gave away six weeks of free memberships has saved a fortune on conventional advertising costs by having health food stores and sports shoe retailers give their free membership away to their customers as a special gift. The majority of free trials tuned into paying members at over $500 per membership. 

Case Study #2 – Optometrist

An optometrist mailed a postcard to prospects offering free eye exams including four different types of eye tests (dry eye test, glaucoma test, visual acuity test, cataract test) to patients they hadn’t seen in two years. The optometrist grossed an extra $10,000 in two days and the phone rang off the hook, non-stop. 

Case Study #3 – Oil and Lube

An oil and lube center offered a free tire rotation, oil change, and fuel injection service. However, the customer was only allowed to take advantage of one of these services per visit. The free service giveaways resulted in significant "up sells" on each visit and the opportunity to capture the customer’s personal and automobile information for future offers. 

Case Study #4 – Hair Styling Salon

A hair styling salon offered a free children’s haircut with every visit. Most of the customers brought an average of two to three of their children to get their hair cut resulting in a doubling of their weekly sales figure. 

Case Study #5 – Chiropractor

A chiropractor offered a free back massage gift certificate for Valentine’s Day with a free new patient exam including an x-ray, neurological and orthopedic exam. To make this offer super successful, he went around to local businesses and gave several gift certificates to the local owners and managers to give to their employees as a free gift. 

Case Study #6 – Dentist

A local dentist offered a free teeth whitening with a comprehensive new patient exam, including x-rays. To make this particular offer a winner the dentist sent several coupons to existing customer’s who had already received the teeth whitening service to give to their friends as a special gift. To make it even more effective he coded each coupon and offered three free whitening sessions to the customer that sent in the most referrals. 

Case Study #7 – Carpet Cleaner

A carpet cleaner offered to steam clean two rooms absolutely free. No strings attached. Once the cleaner was in the home he checked for stains on the floor, rugs that needed stretching, holes or weak spots in the rug, and he even performed an air duct inspection. The result was an average of $60 - $80 dollars worth of services sold per free cleaning. 

Case Study #8 – Vacuum Cleaner Retailer

To attract new customers you must offer your free giveaways to prospects that haven’t yet done business with you. Explore the possibility of exchanging a “free gift certificate” display at businesses that sell complimentary products. You might even partner with a non-competing, but complimentary business and do a joint mailing to each others customer base.

Justify Any Deal That's "Too Good To Be True"  

If your offer that includes free giveaways appears “too good to be true” to your prospect, it could decrease it’s believability and your credibility. To avoid this you should always give the reason why you can offer such a great deal.

It might be that you goofed and are now overstocked, you got a great deal from your supplier, or you just want to say thank you in a meaningful way. Whatever the case may be, give a reason. It doesn’t even have to be a good reason; it just needs to be believable.

Remember, your prospect is very skeptical and has good reason to be. We’ve all been duped at one point in time by a “too good to be true” scam. Furnishing your prospects with the reason why you can offer them such a good deal helps them to logically reconcile your offer in their minds. In turn, this will give your prospect the comfort level needed to act on your offer.

Conclusion

Using free giveaways is an effective marketing strategy if used correctly. Think about what you can offer free-of-charge that your prospects would consider valuable and that you can give at a low cost to you. Don’t forget to compute your total customer value so you know how much you are able to invest in attracting a new customer. Lastly, make sure your justify any offers that are just too good to be true.

About the Author:

David Carleton is the CEO of Power Sports Success and the Senior Editor of the "Power Sports Success eNewsletter." To get your free lifetime subscription visit http://www.PowerSportsSuccess.com

To your success.

David Carleton

Power Sports Success