Marketing Via Free Samples

Oct 17th

Seth Godin recently posted the difference between monopolistic businesses and those which actually appreciate their customers.

If you think about buying more marketing but have holes in the conversion process eventually you are going to get priced out of the market. Sure free samples may be a cost, but it is probably some of the cheapest marketing available, because free samples help you build trust and increase conversion rates by associating your brand with the product your customers want while they are actively looking for it - in a sense it is like an enhanced feature rich version of search. If giving away a sample costs $20 and samples lead to a 10% conversion rate, how does that compare to buying clicks at $2 each and ending up with a 1% conversion rate? If you do the math both of those will lead to a $200 cost per action, but one of them requires you to deal with far fewer people, and will be far more scalable, because any market is limited in size.

Popular bloggers that use their blogs to sell a book (maybe like me) sell many books or ebooks because their blogs keep the attention of potential clients and posts act as free samples. The beautiful thing about selling or giving away information is that there is an unlimited number of new things you can do or say, and an even larger number of ways to restate old thoughts or repackage old ideas. I still have at least a half dozen projects I really want to do soon, and rather than waiting on what to do there is always something I could be doing.

Getting people to pay attention is a cost. People not only convert better when given free samples, but free samples give people something to talk about and link at. If you are trying to build a brand from scratch and sell information then making piracy easy might be the difference between a successful business model and a failed brand that never got much exposure.

Branding and search relevancy are both largely about building mindshare. If you have no free samples, and expect people to take the plunge buying from an unknown source, you are going to need a rather compelling offer or a lot of hype to make many sales. Or you can take the desperate act of trying to win out on pricing, but in most cases that does not make for a sustainable long-term business model. Plus if you build significant trust you not only lower your marketing costs, but you can also increase your prices and expand your margins.

Published: October 17, 2006

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Comments

October 22, 2006 - 1:13am

It really varies with industry. Need to calculate cost of acquiring new customers. In my case, it may work but there are a lot of unqualified prospects out there that will waste your time and money. The plus side is that word gets out on the product/service you are promoting. If you are going to shell out $12-15 dollars on samples, then it will be beneficiary if you get as much information you can from the prospect. This blog is a good example of the free sample deal. Your prospects can come here to find tons of valuable information on SEO for free, everyday. I know I did and eventually bought the book.

October 17, 2006 - 2:40am

Aaron,

I agree with you completely. An example of someone who gets a lot of business by first giving away something for free is Perry Marshall. I first signed up for his Adwords e-mail course about a year ago, but didn't buy anything from him until six months later. I have since bought several products from him. If he hadn't given me his free e-mail course to begin with and followed up with his free newsletters he wouldn't have built up enough credibility in my eyes that I would be willing to spend hundreds of dollars on his products.

Brian M
October 17, 2006 - 2:47am

I believe that free samples build the ultimate trust between businesses and potential clients. Most people today are very skeptical about everything.
A perfect example of this is the free trial i offer. Call me crazy and i'm sure people will be (including you aaron).

I offer my SEO Services as a free trial, i allow people to pay me after they have at least 5 top rankings within Google, Yahoo, or MSN.

This allows people (i feel) to have trust in me. Alot of people think i'm out of my mind for doing this, but to tell you the truth most people are very willing to pay after they see results. I have never had a client not pay me for my services, and i still maintain them all, till this day.

When SE's update and a slight change in rankings occur, i tell them don't worry, you'll be back in no time. They believe what i say and trust in my word, all because of the initial trust, i put in them from the start (hoping joe shmoe half way accross the world pays).

I really don't mind working pro-bono a little from the start, because i have "PASSION" in Search Engine Optimization and love doing it.

October 17, 2006 - 6:39am

Aaron:

Ironic that you should be talking about free samples. Friday, I posted a cautionary tale for business owners about about 10 ways consumers can get revenge online. One of my warnings/suggestions was about suck sites, inspired by your experience with Traffic Power.

Another warning is about samples. Free samples work great as a trust building technique, but they don't work when the traffic comes from searchers looking for something free.

During my tenure at an online printing company, someone posted our sample request link on freebie sites. We got over 1,500 sample requests in 3 days, versus the normal 200 or so. We had 200 legitimate prospects mingled with 1,300 freebie request. Each sample pack cost about $5 to fulfill, so it could cost $6,500 to send samples to people who want free notepads and don't care what's printed on them. Each legitimate request costs about $25 in marketing, so not fulfilling the 200 legitimate requests would cost $6,000 in invested dollars and around $25,000 lost revenue.

Samples are great, but you are advised to think through the whole process before you get started.

October 17, 2006 - 8:52am

Good points ROIGuy. While I do agree with Aaron that giving something away helps to build trust and leads to more conversions you should still think through what you're giving away.

A free sample can work well if you have a quality product that people who try once are likely to want more, but you do need to factor in the costs of the sample and the potential number of requests.

The idea is sound. The details can come back to bite you if you're not careful

Out of curiosity ROIGuy do you know if or how many of those 1,300 freebie requests later bought something. Did you see an increase in sales or did the 1,300 take the freebie never to be heard from again

October 17, 2006 - 3:44pm

I love free samples, and will soon be giving some away myself.

But a warning: people like my wife post "free offers" on free stuff boards, and you may get lots of requests from people who just want it because it's free! They are usually not valid prospects.

On the other hand, having a great time reading Aaron's great SEO book and I'll post a review soon(ish - I'm slooooow). I'm reading it sooner because of Aaron's free sample philosophy. And I expect some folks to buy based on my review

October 17, 2006 - 5:50pm

Steven:

I can't tell you if any would convert for sure because we didn't send them the samples. The company is a B2B that requires customers to have print ready artwork to order anything. Print-Ready artwork is a pretty high barrier to entry for a non design, non marketing prospect, so the a business model aims at designers and direct marketers.

The free sample crowd may have been worth fulfilling for someone like vistaprint.com who allows customers to design online, but not for me.

October 17, 2006 - 5:51pm

Steven:

I can't tell you if any would convert for sure because we didn't send them the samples. The company is a B2B that requires customers to have print ready artwork to order anything. Print-Ready artwork is a pretty high barrier to entry for a non design, non marketing prospect, so the a business model aims at designers and direct marketers.

The free sample crowd may have been worth fulfilling for someone like vistaprint.com who allows customers to design online, but not for me.

October 17, 2006 - 6:46pm

I'm willng to try it. I guess I could have my visitors sample a vacation from the travel pack.
But do you think that will weaken the perceived value of my product?

October 17, 2006 - 6:51pm

Hi Sue
You don't want to give your for sale product away for free. What would be ideal is to come up with something related that you can give away that is hopefully valuable to prospective customers and search engines alike...and if it was comment worthy and citation worthy that is all the better.
Cheers,
Aaron

October 17, 2006 - 6:53pm

What I'm asking is, don't you think that when a product is underpriced or given away, especially a quality item, that it then loses credibility as being valuable?
Well, I'll try it--I have an endless supply of vacation vouchers; I just wonder if this is the best marketing strategy to use in my particular industry (travel).
Comments?

October 17, 2006 - 6:59pm

There is always a fighting balance between expsosure, price point, and the perception of value.

Getting people to even pay attention is hard in a cluter filled world.

Put another way....if you make ads for your product look like content then that is way better than having to buy ads.

Even if my book were twice as good as it is right now, the book would probably have limited value and limited exposure if I did not blog about marketing often.

Sue
October 17, 2006 - 7:05pm

Wow, I didn't know you guys could answer a post so fast.
Thanks.
Okay, so are you saying to give away something other than a free vacation? What could I give? All that I offer is vacations bundled in one travel pack.
Since my web skills are green (which I'm sure must show on my site), I strongly sense that visitors are leaving due to my lack of flash, formatting, and general webbuilding know how.
If I personally am to compete with all of the wonderful, spiffy, highly visual, smoothly navigatable sites out there,
then I wonder if giving out a vacation might work.
Some leads are better than none.
And how else can I garner email addresses, other than offering a free vacation? Maybe a *chance* to win one?(sounds cheasy).
But i certainly do NOT want to come across as the desperate web newbie that I am sure I am perceived as.BECAUSE I know my product is a great deal
I don't ahve the time or money right now to market it in the wonderful setting it belongs in.
But I also don't want to scatter free diamond dust out there, just because I am lost at online marketing.
Oh, what to do???? (help......)

October 17, 2006 - 7:13pm

I would...

  • Read the cluetrain manifesto, the purple cow, and my ebook
  • Get a better site design that reflected the value of your brand
  • Create useful compelling content
  • Ask people to link at it
October 17, 2006 - 7:42pm

I would alo recommend another Seth Godin book (right on topic), Free Prize Inside.

October 17, 2006 - 8:35pm

Thanks everyone! I will try all of those, right after I give the free vacation thing a test run.
Should have the page up in a few minutes.
Let meknow if it's up to pat, pleaseee?

Thank you,
Sue

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