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Giving away free products to grow your business might sound counterintuitive.
However, giveaways or contests are one of the most cost effective ways to grow.
A giveaway is something that is given free to selected individuals or individual who have opted to participate and complete certain actions in exchange for a chance at winning.
Here is why giveaways work for your business growth.
The goal of marketing is to constantly bring new people and feed the funnel. Acquiring new audience is always necessary for the business to grow. To understand that, you will have to understand your product or service life cycle. How long does your customer need before they make a repurchase or engage your services again?
You know that you cannot rely solely on your existing customers as it will take too long before a repurchase. Hence, you need to bring new people into the sales funnel.
As customer acquisition is the most expensive part of marketing, giveaways can help to reduce that cost.
Another reason why giveaways work is that they help in getting existing customers back on your site to participate. Maintaining your brand at top of mind. You will want existing people who know about your brand to participate. The reason for that is so you can leverage on your existing followers’ network. Have you ever seen giveaways that gives you more chances if you invite more friends to participate?
Just imagine, if 1000 of your existing customers shared the giveaway with 3 friends each. You will have a whole bunch of people getting exposed to your business!
Although discounts are a good way to push sales, they work better for people who already are in your marketing funnel. Giveaways are a good way to reach to new people without giving up your pricing position. Free is better than a discount and getting something free is always exciting. If you want to build price position, avoid giving too many discounts.
Since giveaways are effective in customer acquisition, this allows you to spend less on running ads to cold traffic. In turn, you can direct money and resources for retargeting.
Retargeting is where the money is at. Put it this way, the chances of a customer purchasing is significantly higher for someone who knows about your brand as compared to someone who does not. Your marketing becomes more focused and less costly as you are only targeting a select group who have already expressed interest in your products.
Ultimately, the long game is to build a large enough customer base that is self-sustaining by retargeting them. The more people you can get into the sales funnel initially, the less you have to spend acquiring in the future.
Use giveaways as the path to expand your customer base! Your giveaway may just be what it takes for new customers to take the first step towards your business. There is a reason why successful brands run weekly or monthly giveaways.
