3 Benefits of Giving Away Freebies

As we explained in one of our recent articles, giving out promotional products can be a great way to obtain brand exposure and keep your company name in front of past and potential customers. It cannot be denied that people love freebies, whether they feel like they need it or not, a person will almost always take a freebie being handed out to them. Although on the surface, handing out freebies such as personalised notepads, pens, and mugs, may seem like a money loser, it can, in fact, be the opposite – when done correctly, these giveaways can effectively boost sales. We’ve put together 3 benefits of giving away promotional merchandise to your clients.

1) Getting More Is Better Than Getting Money Off

Studies have shown that people actually prefer getting more of something than receiving a discount. For instance, studies in the Journal of Marketing showed that when participants had the choice between receiving 33% more coffee or 33% off the price of a regular coffee, most people picked receiving more coffee, regardless of the fact that the discount is a better deal in terms of the cost of coffee per ounce. In other words, people will perceive receiving a freebie as a gain, whilst perceiving a discount as just a reduction in the loss paid out of pocket, therefore although it does not make economical sense, we would rather gain than lose.

2) Giving A Free Gift With Purchase Boosts Sales

Studies in the same journal found that when offering a freebie with a purchase without specifying what this gift would be increased sales. Our purchase decisions are often based on emotion, therefore if a surprise is involved, retailers can get away with giving away small freebies as the uncertainty of what the gift is has a stronger impact than simply offering more to consumers.

3) People Will Return The Favour

Think about when you last went to a dinner party … you probably brought the host a bottle of wine or some flowers as a gift? Now, think about when you had a dinner party … your guests probably brought you a gift to thank you and return the favour. The same concept works when giving away freebies to your customers – this is known as the reciprocity principle. A study by Gardner (2005) found that feeling obligated to reciprocate a favour “can occur despite the fact that we may never have requested the favour in the first place”. Therefore, once your customer has had a taste of your brand, they will likely feel obligated to buy more than what they have been given for free. Another example of the reciprocity principle would be when you are in a supermarket and there is a stand handing out free food samples – you take one, and then feel obligated to purchase a full-size version of whatever it is.

These three benefits show you how when your customer receives a gift for free, they often respond in surprising and often unconscious ways. From this, your business will ultimately be ‘thanked’ for its generosity by having increased custom.