Why Do Businesses Choose To Give Away Free Stuff?

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There are distinct reasons why businesses across a host of sectors opt to build freebies into their operating margins. The freebie philosophy is one that many brands abide by, including online as well as offline. We’ve all experienced walking through a shopping mall and being offered tasty morsels of food, drink or even cosmetics and clothing. It’s a process that online retailers are increasingly adopting too.

What types of companies can you expect to get something for nothing from?

The simple answer is — more than you would think. According to this infographic, the most common free sample products distributed to consumers in the UK is beauty products. The beauty industry is always launching new products that can solve long-standing problems with skin and other blemishes to help improve an individual’s self-esteem. By giving away free samples, the beauty industry can put their new products firmly on the radar of their target demographic to try and land repeat customers.

It’s a similar case in the iGaming industry, where operators choose to award free spins bonuses that can be played on real-money slot games. Free spins are one the easiest ways for operators to introduce brand-new slot titles, giving loyal customers a taste of what to expect on the reels without having to risk a cent of their own money.

The household goods industry is also one of the most popular sectors to supply free products that can make home life easier. Whether it’s new and innovative cleaning products, clever technology or white goods, all of which are often distributed free to raise awareness of the power of efficiency and productivity.

Free stuff helps build brand reputation

In many cases, brands that embrace the freebie philosophy are those that don’t have a readymade reputation to fall back on. They need to give away free products and samples just to get their brands under the noses of their target demographics. Businesses not only choose to supply free products to increase the exposure of their brands, but they also hope to forge customer loyalty. If their goods or services enhance the everyday lives of their customers, it’s an easy sell and increases the prospect of these customers turning into repeat customers and brand advocates both offline and online via social media. After all, customer retention has long been the bedrock of taking small businesses to the next level.

Brands can distribute new products to cultivate genuine product reviews

For brands that are still relative unknowns in their respective industries, giving away free products in exchange for genuine customer reviews is common practice. It’s a case of ‘you scratch our back, and we’ll scratch yours’. Consumers place increasingly high importance on product reviews before parting with their hard-earned cash. Savvy shoppers can also sniff out fake or disingenuous product reviews too, so the importance of genuine feedback cannot be overstated. It is said that more than 10 million product samples are distributed to consumers across the UK each year. This means that millions of product reviews are cultivated annually across genuine portals like Google.

Sharing free products can help build trust in your brand

There is also a sense that the more consumers are exposed to a brand, the more they grow to like and trust them. Free product samples and giveaways help to keep brands relevant. It’s also a way of rewarding customers for their loyalty too. Some businesses will operate loyalty schemes, whereby free products are awarded after a predetermined number of transactions.

An easy opportunity for brands to build customer databases

For retailers and suppliers that are starting from the ground up, they are highly unlikely to have a ready made database of customers to target. Many businesses instead give away free samples and products to consumers in exchange for their personal contact details, be it email addresses or telephone numbers. Technically, businesses state in the terms and conditions that they are allowed to use these contact details for future promotions to market upcoming sales and deals.

Giving away free stuff isn’t a way for brands to cheapen their products or name. Instead, it’s a way for businesses to play the long game, without breaking the bank and affecting their margins too heavily.

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