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Utilize the “Power of Free” to Increase Online Sales for Your Business


What comes to mind when you hear the word “free”? It probably grabs your attention. You are being offered a risk free trial of a product or service. Say you are strolling through a mall food court and one of the vendors puts out a free sample. They are letting you try their product before you buy it which gives them a leg up on their competition. If you already know you like something, you feel better about purchasing it.

Even if you are not interested in what is being offered, chances are that you will try it out. After all it’s free right?

Being a customer and receiving a free product or service is quite different than being a business owner and giving away your product for free. How can giving away a free product possibly help you increase online sales? Well, you’re about to find out!

As a business owner your main goal is to grow your business. About 96% of Americans shop online so wouldn’t it be smart to try to increase online sales? The key to increasing sales is to increase the number of customers you have. It all begins with the customer value optimization funnel. This is a seven part funnel that can take your business to the next level no matter how big or small your company is. This funnel is clever because if people do not advance through the funnel, they are retargeted until they move to the next step.

First you must define your target audience. These are the people who will be interested in your product. Typically products solve problems for people, so make sure you target the correct buyers. Next choose a traffic source with which to target these buyers such as social media or email marketing. Once these two steps are complete, you can jump into the funnel.

Introduce a lead magnet.

This is where your journey to increase online sales begins. A lead magnet is how you gain leads or people who haven’t heard of your product but might be interested in it. Your lead magnet can be something simple like a free eBook, but it must be given in exchange for potential customers’ contact information. This is the first interaction people will have with your brand so make sure you come across as professional and legitimate. You will want to build trust with leads so that they continue on their buying journey.

lead magnets

Eating Well is a company dedicated to producing healthy recipes through their magazine and website. In exchange for your email, you can receive a free membership where the company will send you healthy recipes and nutrition tips. Once they have your contact information they will of course send these free recipes and tips but they will also be able to contact you with other offers.

The next step in the funnel is a tripwire.

This is where you give something away for free (or at an extremely reduced rate)! This step is crucial and will convert leads into customers. Although you are not making money with a tripwire, you are trying to acquire customers not turn a profit. The profit part comes later as the customer continues through the funnel. This is one of the most important steps in the customer value optimization funnel because you are growing your list of customers who will buy your product.

Sunny Co Clothing was founded by two college students at the University of Arizona. In May 2017, they offered their popular red Pamela Sunny Suit bathing suit (a $64 value) for free. All customers had to do was pay shipping and handling. This promotion ran on Instagram and quickly went viral, receiving over 100,000 likes. Clearly this tripwire gained them publicity and added to their customer base which in turn was able to increase online sales for Sunny Co.

Now you are ready to offer people your core product.

Now that customers have had a sample of your product, you can offer the real thing in order to break even. Your core product is the main component of your business. It might not make all the money, but it is the core of your business. For example, McDonalds sells hamburgers as their core product, but this is not where they make all of their money. This brings us to the next step in the customer value optimization funnel.

Next, offer a profit maximizer.

A profit maximizer is an add on to your core product. This is where you actually make money. The profit maximizer for McDonalds are add ons like fries and drinks which are typically bought alongside their hamburgers. This is why you are used to hearing the phrase “Would you like fries with that?” McDonalds makes $200 million just by saying these 6 words. This is where their sales are coming from, not the core product and not the tripwire. Since you have already built a solid customer base, you should have no problem selling these products!

Create a return path.

How will customers continue buying your product? You need to continue communicating with them via a return path such as social media, email marketing or blogging just to name a few. Communicate with customers on social media channels like Facebook, Instagram and Twitter. Create an effective social media strategy so that you can continue to increase online sales.

Did you see how the tripwire worked in this funnel? By acquiring more buyers with a free product, you can actually increase online sales. Over the course of this funnel, cold leads or people who have probably never heard of your company before are transformed into potential customers and then lifelong buyers.

Free is a powerful word and it is hugely important for businesses in order for them to increase online sales. If you are planning on doing a free giveaway for your business or passing out free samples, you should definitely have a strategy first.

Increase Online Sales with Ambassadors

When you give potential customers a freebie, you are essentially paying them to become ambassadors for your brand. Giving away your product for free buys attention. You can think of it as an advertising cost. This is your chance to show potential customers why your product is the best of the best and convince them to keep coming back to you for more.

Once they are convinced, they will spread the word like wildfire. Have you ever tried a new brand and then told all of your friends and family about it encouraging them to try it too? Oftentimes people are brand ambassadors and don’t even know it!

Product Test Run

You can give people a sample of your product and if they like it, they will come back for more and turn into paying customers. They will also be likely to check out some of the other products you carry. For example, you offer a small sample of your product on social media. It’s free so people give it a try because they don’t have anything to lose. If they like your product, they will return. It’s that simple.

Many brands spend their budgets on customer acquisition but how many of those first time customers actually return? After one purchase, customers have a 27% chance of returning to purchase again. After a second purchase there is a 45% chance they will buy from you again. New customers are great but returning customers are the key to success for your business.

The Psychology of Giving to Increase Online Sales

If you give people something, they will feel obligated to return the favor. Does this happen 100% of the time? No, but chances are if you give a customer a free product, they will reciprocate and be loyal to your brand. Think of it this way, if you are nice to someone they will more than likely be nice back. Provide your customers with free content, tips, tricks and the occasional free product and you will build a loyal following of people who love your brand and continue to buy from you.

Look at the tremendous response this client (local massage business) got after we launched the Facebook ad campaign highlighting their special offer.

Who should you give free products to?

Well the answer to this is everyone. But if you are trying to strategize try giving your product to influencers in your industry or on social media. Your potential customers are following these people and looking to them for the next big trend.

So how do you go about finding the right influencer? People, especially millennials follow online personalities and vloggers (video bloggers) and will try or buy anything that they review and endorse. Research people in your industry who make YouTube videos for a living. Find several and follow them on social media, watch their videos and reach out to them.

Build a relationship and promote them in your industry. This is a mutually beneficial partnership – promote them and they will return the favor and promote you – kinda like the being nice to people situation we mentioned earlier. Send some free products to your new influencer friend. Chances are they will review it and their following will want to try it out as well. By giving away free products to influencers, you are paying for exposure. This is a great way to increase online sales as well as connect with powerful people in your industry.

Here is an example from a company called Butcher Box. They are a subscription meat service delivering grass fed and grass finished organic meats straight to your doorstep. They have given their box to an influencer in their industry to review and have used this video as an advertisement on Facebook. They also combine this with an offer for free bacon and free shipping to further entice potential customers.

Social Media Giveaways – Best Practices

In order to increase online sales you must be online. Platforms like Facebook and Instagram are perfect for giving away free products or having contests to win free products. This increases customer engagement and brand awareness. So how can you set up these campaigns and what should you do to promote them?

Video

Video has clearly taken over the internet. Scroll through Facebook right now. How many videos do you see on your feed? Trying to increase online sales? Short videos of your product work great. This allows customers to quickly see what your product is and how it works. Your video needs to show your product in action.

PrettyLitter is a cat litter subscription that ships cat litter straight to your door so customers do not have to carry heavy boxes from the store to their homes. They use a testimonial along with a short video to show that their product is hassle free. They also advertise free shipping!

Limit Your Freebies

Create hype by offering your free product to a limited amount of buyers. The people who receive your product now feel like they are part of an exclusive club. The people who missed out on this offer might even be intrigued enough to buy your product at full price to feel like they are part of that exclusive club you created. The customers who were lucky enough to get your product for free will more than likely tell their friends. You have just paid these customers to become ambassadors for your brand by giving them a free product to try.

Free Samples

Giving people a free sample also works magic and can increase online sales. If you do this right and really “sell” your product people will come back for more. Many companies offer free samples or free products when you spend a certain amount of money. This is a sure way to increase online sales. If people have to spend a certain amount to get the free product they will definitely spend this and sometimes more!

What if your favorite brand offered you a gift set or free product when you ordered one of their other products? Would you do it? Chances are you probably will if it is a company that you know you already like and they are offering samples of other products you might like to try! Estée Lauder offers a free gift when customers spend $35 or more on their products. As an added bonus, you as a customer have the ability to choose which products you want!

Online Contest

Create a contest to win a free product. Have participants share or like your Instagram post, tag three friends or post their own photo on social media and tag your brand. Nikki’s Coconut Butter partners with other brands for giveaways. They ask for users to like their post, follow both brands on Instagram and to tag friends! Follow through with announcing the winner on the giveaway post. You will build trust with your followers for your next giveaway!

This bleach company generated 112% revenue growth with the help of our social media contests.

Free Trials

Offering a free trial can also be beneficial. You can ask recipients how they like it, what you can improve, and if they would pay for your service. You have given them a free test run and now is your chance to ask for feedback! Even if people who use your free trial and do not move on to purchase your service, may be able to give you valuable feedback which you can use to make your future offers even better.

So many companies offer free trials of their products. Companies like Hulu, Amazon, YouTube and Netflix have clearly been successful. Although there is no guarantee that users who try your free trial will buy your service afterwards, you are expanding your potential customer base.

Offer a Clear Discount

Although it’s not completely free, offer a clear discount or price cut. If people can visibly see what they are saving, they are more likely to purchase. Bon Appétit Magazine uses a short cooking video along with this clever statement. By crossing out the original cost of the subscription, users can clearly see that they are saving money.

Free Products with a Purchase

Offer free products with a purchase. This is a sure way to increase online sales, especially if you can target people who might already be looking at your products. Nectar Sleep ran a Memorial Day sale advertisement on Instagram offering $125 off in addition to two free pillows. If you have already gained leads who are interested in buying, offering incentives will encourage customers to make that purchase. Putting a time limit on these offers will also help increase online sales for your business. Customers will feel the pressure and will need to quickly make a decision. Adding pressure like this can easily push potential customers to convert or buy your product. 

Offer Free Shipping

58% of online shoppers think paying for shipping is inconvenient. If your company offers free shipping (even if the shipping cost is calculated into the price of your product) customers will feel like they are getting a deal! Pro tip: if you do not want to offer free shipping, be transparent and upfront about your shipping costs. If customers get all the way to the end of the online ordering process and then see that shipping is going to be $20 there is a good chance they will exit out of the checkout page.

If you don’t want to offer free shipping you should consider offering shipping for a really low rate like $0.99. Customers are still paying a buck for shipping but since this is a small amount of money they feel like they’re saving a ton!

Mystery Offers

Believe it or not, curiosity can help increase online sales. Entice your customers with mystery discounts, offers or products. Even if they don’t make a purchase, the suspense will make them click to see what discount they’re going to get. If it’s good enough, they’ll make a purchase.

Increase Online Sales with Recurring Sales

If you are a well known brand a recurring sale is a great way to increase online sales for your company. Victoria’s secret’s much anticipated semi-annual sale is held twice a year. Shoppers can find discounts, free shipping and clearance items at reduced rates. This sale has become vital to the company and loyal customers are obsessed with it.

First Time Purchase Discount

What if you only offer one product? Offer the first one customers buy for free or at a discounted rate. This way customers can feel better about trying a product they haven’t tried before. Subscription boxes often offer 50% off their first box or even the first box for free when you sign up. Hellofresh, Dollar Shave Club and Fab Fit Fun are all subscription services that offer first time users deals on their first boxes as a way to get customers in the door. If they like the first box, they’re likely to sign up for a second and a third and so on.

Coupon Codes Increase Online Sales

Coupon codes are one of the most successful ways to increase online sales. Add one as a banner on your website, promote one on your social media channels or send one out in an email to your list of subscribers. Come up with a fun and creative way for customers to obtain the coupon code. Have them play a game on your site or spin a prize wheel. The more they engage with your brand the better!

Shaka’s, a sunglasses company based in Hawaii offers a discount to customers who are willing to give their email. They then get to spin the wheel to earn a coupon code! They also create urgency by showing a progress bar of offers that have already been claimed.

If you are nervous about giving away free products or services, view this as an investment not a loss. You are building a customer base, acquiring brand ambassadors and forming lifelong relationships with loyal shoppers. Giving away free products sounds easy enough but you have to convince customers that your company is worth buying from after they try out your free product. Looking for more ways to increase online sales? Check out our 25 online marketing tips!

Are you ready to increase online sales for your business? Let our specialists come up with creative ways to engage your customers and beat out your competitors. Contact LYFE Marketing today!



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