This archive report was first published on 22 September 2021.
Published on September 22, 2021, a study by Facebook, Google, LinkedIn and other successful companies highlights the effectiveness of giving away products or services for free as a marketing technique.
One of the most powerful marketing techniques is giving away your products or services for free. This strategy has been used successfully by many software companies, offering a freemium version or a limited trial period to draw in new customers.
While this marketing technique is most common in the digital space, it also works for businesses that sell physical goods. In 1895, King Gillette invented the first disposable shaving razor blades. Initially, the company sold a measly 51 razors and 168 blades in the first year, 1903.
However, Gillette's company grew exponentially in the next two decades. The success of the company can be attributed to one thing: the power of free. He sold his razors to the army at massive discounts so that they could be given to soldiers. He also approached other companies to bundle their products together with his razors.
Gillette only gave away razors, which were useless by themselves. By doing so, he created demand for his disposable blades. Now Gillette is the world's leading brand in safety razors and shaving supplies.
One of the reasons 'freeconomics' is an effective marketing technique is the psychology of reciprocity. Once you give someone something for free, they feel compelled to give something back to you.
However, this marketing strategy isn’t for everyone. To make this marketing technique work for your business, you need to give something of value to the customer. It should result in high customer satisfaction, which means they’ll be more willing to buy it after the free sample, and even recommend it to their family and friends.
Many businesses make the error of giving a free sample or freemium product that gives the customer little satisfaction. That can end up being frustrating to those customers – which doesn’t give them a positive association to your brand.
Before you implement the technique, you should define your objectives. Do you want to create awareness, social media following, or increased sales? With that in mind, you can now come up with metrics to determine the Return on Investment (ROI).
