I’ve been rewatching one of my favorite shows, Breaking Bad.
During this second viewing, one thing that has really jumped out is how often Walter White and Jesse Pinkman give away their product for free to potential partners, customers, and distributors.
Obviously, I don’t condone what Walt and Jesse are selling or most of their business practices. But giving away your product for free? That’s a strategy I can get behind!
So in this article, I want to talk about why freebies — like free trials, free-plus-shipping offers, and even free downloads — are a smart marketing tactic that can help attract new customers to your (much more legal) brand.
3 Reasons to Give Away Your Product for Free
Giving away your product for free can help you overcome some of the toughest challenges in marketing.
Here are 3 of the big ones:
Overcoming Resistance and Gaining Trust
Many customers hesitate to buy a new product online, especially when they don’t know your brand. After all, how are they supposed to trust that your product will deliver on its promise when they can’t see it in person?
Of course, there are many different strategies designed to build trust — such as:
- Featuring reviews and testimonials
- Offering easy returns
- And highlighting proof points and other credibility boosters
But the best way to overcome resistance is to remove all risk from the equation, and simply give your product away for free.
A SaaS company, for example, might offer a free trial. If the customer has a positive experience with the product, that can go a long way toward building trust and convincing the user to become a paying customer.
Here, MailChimp offers their standard plan for free:
They hope this free offer will get the user “hooked” on MailChimp, and then the prospect will become a paying user when they need more advanced features and/or more than 500 contacts.
Sounds like a page straight out of Walter White’s book.
Demonstrating Your Value
There are some products whose value is difficult to demonstrate online. In these cases, a free offer can help overcome that barrier and expose your product to new prospects.
For instance, consider a mail-order meal delivery service like Factor.
It’s hard to show people just how good these meals are without letting them try the food for themselves, so Factor wisely offers free meals and other discounts to entice new users.
Again, the idea is the same: lure users in with a great front-end offer, wow them with an amazing experience, and make your profit on the backend.
Overcoming Low Conversion Rates
These days, the competition for people’s attention is fierce — and that can make it hard to get the kind of results you’re looking for from your marketing campaigns.
If that’s the case for you, freebies can help increase your conversion rate and potentially improve your ROI.
I know it’s counterintuitive, but offering your product for free can actually decrease your acquisition costs (even when you factor in the cost of the product itself) by getting your product in the hands of many more prospects.
A classic example of this strategy at work is the Columbia Music Record Club.
They made the insane deal of offering 13 records or tapes for just $1.00, with a requirement that customers had to agree to buy several full-priced albums in the future.
While they undoubtedly lost money on the initial sale, Columbia eventually profited on the backend when those new club members purchased additional records at a higher cost.
3 Tips for Turning Freebies into Paying Customers
OK, now that we’ve discussed some of the challenges that giving your product away for free can help you overcome, let’s dive into some of the strategies you can use to leverage this tactic successfully.
Maximize Product Utilization
When you’re offering your product for free, remember that a conversion does not necessarily equal a sale. Only a percentage of freebie takers will convert into a paying customer.
So in order to maximize your paying customers, you’ll want to do everything you can to get trial users to start using your product — and getting maximum benefit from it — as quickly as you can.
This can be especially tricky with complex products, such as software.
That’s why, if you’re giving a free trial to your SaaS product (for instance), you’ll want to take advantage of product tours and other onboarding efforts to help get new users up-to-speed ASAP — like Pendo does here:
Or for ecommerce brands, one could use a simple post-purchase sequence explaining features and benefits to encourage use.
A few simple nudges can get customers to start using your product, while minimizing confusion and floundering.
Make the Right Offer at the Right Time
Sometimes, a well-timed free gift can turn a complete stranger into a loyal customer.
For example, in the early 90s Gillette started sending free shaving kits to young men on their 18th birthday along with a branded message about the importance of a man using the right razor.
It’s a brilliant strategy: give new shavers a free razor, knowing that some of them will be convinced into buying Gillette replacement shaving heads (which is where they make their real money).
The lifetime value of these new customers is bound to make the cost of the free gift easily worthwhile.
Get Customers to Commit
Another way to make the most of trial redemptions is to attach your freebie to a larger commitment.
There are a lot of ways you could do this, so here are a few examples of how other companies have done it successfully:
Require a subscription or additional purchase. Just like Columbia Records gave away a bunch of low-priced music albums to attract new members to their mail-order music club, you can also offer free products to entice people to sign up for a subscription or auto-ship program.Use upsells and cross-sells. Another technique is to give away one product for free, then present several upsells and cross-sells to generate additional revenue. Most “Free + Shipping” offers use this approach:
Offer a sliding discount. One strategy that is working incredibly well for some brands is to offer free products to shoppers whose purchase passes a certain threshold.
While this isn’t a freebie offer exactly, it does encourage users to try your brand by enticing them with free products.Here’s what this looks like on oVertone:
We recently published a blog post with our results from a split-test involving this technique. Read the post here.Stretch out your discount over time. Earlier, I mentioned that Factor is known to offer free meals and other discounts — but rather than giving you the free meals all at once, they’re stretched out over the course of multiple meal deliveries.
So the only way buyers can get the full benefit of the offer is by sticking around as a paying customer for several weeks, giving the company a much longer runway to show their value and (hopefully) convince these buyers to stick around for the long term.
Should You Give Away Your Product?
Walter White may not be role model material, but he sure was a savvy entrepreneur.
By strategically giving away his product to the right people, at the right time, he managed to corner the market in a highly competitive industry.
And depending on your product, you might be able to do the same.
It’s hard to make a blanket recommendation here, since every company is different. If you sell yachts, for instance, I don’t recommend giving your product away for free. ?
But if it’s feasible for you to give away products or offer free trials — and you believe you can recoup your costs on the backend — then this could be a good way to get new prospects in the door.
Get creative, and find out if freebies are the key to unlocking the next level of growth for your company!
