Use giveaways wisely to boost your sales, not shoot them down. To facilitate, not frustrate your sale. Now then. Giveaways or freebies include marketing merchandise (brochures or pens, for instance). Or, demonstrations (Sampling a new food or soap, for instance). Or free use of a product or service (use of a room at a hotel for changing, for instance).

You can use any of these giveaways as an effective way to boost your sales. But you must be wise about it. Otherwise, customers will slice and dice you to their benefit and your detriment.

Here are 4 reasons why you should use freebies wisely.

  • You can’t always win
  • You weaken your sales muscle
  • They work
  • And, they cost

Let’s look at each

You can’t always win; so use giveaways wisely to boost your sales

There will always be bigger and better merchandise than yours. The more if you are a small fish in a big pond. For instance, every medical rep has branded giveaways in their briefcase to give to doctors. It is not uncommon for medical representatives while detailing to have a doctor pull out a drawer and derisively state, “This is the pen (big boy competitor’s Pharma name) gave me. Now look at your puny one.” Ouch! How do you proceed with the sale?

You weaken your sales muscle

The ineffective sales person leads the sale with the freebie. This is in the hope that the prospect will be won over by the ‘generosity’, design and content, and then eagerly sign on the dotted line. The prospect accepts the freebie wholeheartedly, or is blown away by the demo, but doesn’t sign. I witnessed this when I used to sell a niche financial service. It’s glossy, coloured, hard cover bound, intricately designed brochure, imported from South Africa, cost a thousand shillings ($10). Sales people would get as many as five or six every day, limited only by the carrying capacity of their arms.

In fact, “There are no brochures” was an excuse for not going out to sell. Potential buyers on the other hand, excited by the look and feel of the brochure would object thus: “Give me a brochure. Let me read it and get back to you.” They never did. Follow-ups would result in, “I’m still reading your brochure.” You see, brochures don’t sell, sales people do. Hoping the intricate brochure, jaw dropping demo, dazzling PowerPoint deck, or expensive flyer will do the sale for you is wishful thinking that weakens your sales muscle. You never learn to pitch and in essence are a freebie distributor.

How successful are giveaways?

Do giveaways work? Giveaways do work. Why giveaways work is because they ice the cake. It feels good to get something worthwhile for free. For instance, there’s a Chinese restaurant in town that gives away gift items (e.g. miniature torches, key rings) with the bill. In the immediate, the gift blunts the feeling of parting with money to pay and sharpens the feeling of ‘I’m getting something (tangible) in return. The cost is already factored into the meal, of course. So the gift is a feel good item and important. Giveaways are important because they increase the chances of you remembering the restaurant, talking about it and coming again. More sales all around. Just as with the pediatrician that gives his patients sweets. They will always tell their parents to take them back to ‘That doctor’. Giveaways can also come in handy post sale.

Use giveaways wisely

Like receiving an apology with a gift hamper for the item you tweeted complaining about that bought but found expired. Overwhelmed with feel good feelings, you are likely to also tweet the apology and hamper received inadvertently referring the apologetic institution and increasing chances of more sales to them. This is how you can benefit from a giveaway or giving free gifts to customers. But did you notice how targeted these giveaways are?

Poor timing and targeting

They are unlike the sales person at the hotel that starts the sale to the bride and groom seeking a venue, with, “We will give you a free wedding cake…” The timing is so poor that that gambit has zero stamina. It’s spent. And the sale has only begun. Now if only she had waited to hear what the couple were looking for and then (if at all she must) wisely insert, “We will let you check out at midday on your wedding night,” because, she realizes, “We will give you a free wedding cake” wouldn’t make sense and the late check-out freebie is much more appropriate given the couples need. This way she wouldn’t be selling but helping the couple make a buying decision.

Effective sales people know how often you should do giveaways. As such they use giveaways wisely by giving them away only when they must, always after the pitch and almost always to qualified prospects. Not indiscriminately to everyone that asks for them. These sales people know that giveaways can detract the sale and so use them wisely, sometimes not even carrying them (if tangible) or mentioning them (if intangible).

Use giveaways wisely. It’s a cost

The average sales person is immune to the cost he incurs to sell. “The farm manager was completely floored by the demo. He’s asked for another. Let’s just do it and they’ll buy, I’m sure,” he’ll naively argue. Forget that the biological pest control demo spans a season (3 months), will cover another 1/8th of an acre for free for the prospect, and costs almost a million shillings! It’s even worse when it’s a service you are selling because you don’t ‘see’ the cost. When he wants to give a hotel room away for free, the sales person argues, “But the room is empty” or “But they didn’t ask for drinks or meals.”

Constant reminders admonishing him that, “This things cost money” just fall on deaf ears. He cannot understand a cost he does not feel. And you might as well be speaking Latin explaining profit and loss statements and balance sheet to the short term thinking specialist, which is what a sales person is. Sales people are usually completely oblivious to cost. Enter the Sales Manager who should realize that ordering a mere 1,000 of said brochures already has him starting at minus Shs. 1,000,000 (1000×100) in departmental costs! Nothing wrong with this; unless as manager you fail to wisely create awareness of it to your sales team at which point you are always in deficit or struggling to get out of one.

Create awareness of costs

One  effective Sales Manager, used to ask his team to include costs of transport in their sales reports. He had an Excel Sheet for his team to populate and it would automatically calculate costs incurred that month on transport. In one of his comments on the sales reports he noted that, “Let’s all compliment Francis. Despite exhausting his transport allowance last month, this month he has met his targets at nil allowances.” His departmental costs tended to remain controlled because of such wise raising awareness of costs

If at all you must use them, use freebies to complement not replace the sale.

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