ISSUE NO. 65 06/06/12

The old saying that there are no free lunches certainly doesn't apply to today's retail environment. Though marketers have debated the efficacy of offering freebies to lure new customers into trying their products and services, a study by iYogi finds the "try-before-you-buy" model to be an effective strategy for converting consumers into shoppers. Among the 2,000 people surveyed who had sampled new products or services for free, nearly half (42%) did end up buying additional products or services.

A brief look at this month's offers shows that a number of chains are putting this finding into practice, though most for a very limited time. For example, for three days only, members of the Chili's email club who sported an official coupon received a Free Chili's Appetizer with the purchase of an adult entrée. 7-Eleven hosted Free Slurpee Day by offering a free Slurpee to anyone who walked into one of its stores nationwide on May 23. But it's not just appetizers and Slurpees. Both Amazon and IKEA are getting into the one-day giveaway act. On May 24th, Amazon gave away a $2 MP3 credit to consumers who shared the name of their favorite song on Facebook. IKEA offered a twist on its day of freebies by giving away free IKEA Blue Bags on May 24th as well, though the bags weren't given away at the stores. Rather, IKEA used Twitter to direct consumers to "high traffic areas" throughout the country where they could get their Blue Bags.

Giveaways are a staple of the marketing mix but it can be hard to measure their effectiveness. As a result, marketers can be reluctant to use this type of promotion to build buzz and drum up new business. But the findings of this research make a solid case for including freebies in your programs. Giveaways can be a very powerful tool, especially when deployed with creativity: take note of the limited-time offers as well as the clever way IKEA incorporated social media into its offer.

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"Promotions from the U.S. Retail Industry (EAT, SVDNF, AMZN, FB)," Retail Industry, 5/21/12

"Consumer Adoption of Freemium Products and Services," iYogi Insights, downloaded 5/24/12
7-Eleven, Amazon, Chilis, give-aways, IKEA, shopper research

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