How To Make Money By Giving Things Away For Free
Profiting via giveaways works in retail outlets to this day. Create a “loss leader” to lure people into the store – this would either be a free product or something so deeply discounted that it may as well be free – then once they’re in the store, make strategic recommendations about other stuff they need and profit from it.
Internet marketers took the concept a step further by doing much the same thing online, and there’s little to no reason that you can’t take advantage of the idea the digital marketers came up with to enhance the profits of your own business.
In short, on the web, just as in retail, there’s money to be made in free. Note that I’ll be keeping this as generic and industry neutral as I can, so that it applies to a broad cross section of businesses. The idea works something like this:
Create Your Free Product
It all starts here, doesn’t it? Before you can profit from this strategy, the first step, of course, is to actually have or develop something you can give away to your customers. Digital products are best suited for these purposes for a variety of reasons, but the two biggest are these. One, it doesn’t cost much of anything to create a quality digital product, and two, it’s easy to insert “hooks” to paid products into a digital offering.
Spend some time here and get this right, however. Whatever you create, you want it to add real value to your customers. It can’t be fluff, and it can’t be something they can get or find out on their own with a bare minimum of research; you need to actually bring your A-game to your free product’s design. If you don’t, your customers will treat it like the prize in a box of Cracker Jacks. An amusing distraction for all of about thirty seconds, and then they’ll forget all about you. That, of course, defeats the entire purpose of the exercise.
At Intervals In Your Free Product, Advertise Paid Services
Just to use an example so as to better wrap your head around it, let’s say you make customized iPhone cases. I would propose giving them away, and offering various means of customizing said cases as paid add-ons (this will become important to my next point too). So you give the case itself away, and your in-store app – you do have one of those I hope – recognizes when this “purchase” is made, and at intervals begins suggesting various bits of bling the user can buy to begin customizing the blank template that your case represents. Sequins for girls, something else for the boys, your app probably knows the age group and purchasing preferences of your customers, and can make additional recommendations based on their ongoing, evolving purchasing history.
Lock In A Profit Stream
To take this idea to the next level, you don’t want to recommend one-offs. You want an income stream. That’s why you want to create a “Razor and Blade” model with your giveaway promotion. Give the razor away, and charge for the blades. You lose a bit of money up front, and make it back many times over as they keep coming back to you to “buy the blades.” That’s where your profit is. That’s where your ultimate success lives.
Market The Free
Once you’ve got the basic system set up, don’t market your company’s “blades.” Market the razor. Market the free thing and tell everyone how amazing and wonderful it is that they can get it for absolutely nothing. That expands your customer base like wildfire, and they’ll connect the rest of the dots all by themselves. Your customers do not need you to spell out that even if you give them the printer, they still need ink.
Just about any business can find a way to profit from giveaways. What have you given your customers lately?