Online Marketing Strategy: The Power of Freebies

January 29, 2010 | By Marc Porcelli | No Comments »

Always a fan of infomercials since I was a little kid, and fascinated as an adult at just how large the infomercial industry is. The “As Seen on TV” vertical has always been large and has significantly expanded in recent years. This expansion has been turbocharged due to the recession, and larger brand advertisers pulled back from their media buying, particularly on traditional platforms such as television. As these larger and more traditional advertisers pulled back, in came the infomercials whose advertisers were more than happy to take their place pay much lower rates for primetime television spots that typically would be way out of reach.

Take a look at products such as Sham-wow or Magic Jack. These are now household names, brought to us predominately through infomercials which have driven users into store and online to make impulsive buys. Being as impulsive as mass consumers are, this has and continues to be the perfect environment for the vertical.

You can’t walk into a Wal-Mart, Target or Bed Bath & Beyond without seeing infomercial products in displays in the walkways or on shelves. You get the point, infomercials are huge, but why are they so profitable?
The user is generally presented with only one product and then the marketing strategy kicks in. They are bombarded with messaging such as, “but wait if you order now you can get a second product for free” AND a freebie of some sort which costs the marketer virtually nothing. The second product for free automatically makes the consumer feel that it is a great deal, but now you throw in a freebie and hook the user, the $9.95 for S&H doesn’t even resonate with users. This is all very profitable.

The freebie is often times the deal-closer in the direct-response world of infomercials, but it doesn’t just have to be limited to just infomercials. If you look at holiday shopping studies and what users value most when making a decision, it is free shipping.

Take online dating, users are often presented with a purchase wall that can have numerous membership or subscription options. Generally there are three options. Option 1, which is a one month membership for say $29.99; Option 2 which is a three month membership for $69.99 (a savings of $19.98) BUT with a three month date guarantee where if users can not find a date in three months, they get three for free; and option 3 a six month membership for $139.99 (a savings of $39.95).

Based on the average churn of a paying online dating member (about three or four months) option 2 is what a typical online dating organization would want to push and feature. The freebie of “get three months for free” not only removes doubt from the users mind and eases the decision to put in their credit card, but it is also a win-win for the online dating advertiser based on their particular business model.

As an online marketer, think of high margin products or services based on your unique business that you know will resonate well and be valued by your users and test it out. If you don’t know what this is, tell your users and market based on the perception of value that you create. For B2B marketing, White Papers have long been offered as a Freebie for basic users information that is used for lead generation. Car manufactures offer Freebies to get you in the doors. At end of the day, the freebie can be a very powerful psychological tool to remove doubt and increase conversion.

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Category: Marketing Strategy, Online Marketing

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