Maximizing Impact: Business Promotional Giveaways for Brand Growth

B usiness promotional giveaways are a powerful marketing tactic commonly used by brands to acquire new customers and increase brand awareness. These giveaways can be categorized into two types: sweepstakes and contests. Sweepstakes involve winners being selected from a random draw. Prizes in these giveaways can be anything imaginable, from cash prizes to an all-inclusive paid vacation getaway. Each type has its own entry method and winning strategy, such as online website submission, text messages, and emails. They are also an effective technique for driving website and app traffic, which may generate customer interest while simultaneously increasing brand recognition. Contests, differing from sweepstakes, require participants to complete a task or challenges. The winner is chosen based on criteria like the best photo, video, caption, or logo redesign. Contests can boost audience engagement and provide brands with more opportunities to record customer interactions. Moreover, they encourage customers to connect with the brand in anticipation of fun and the possibility of winning something valuable. Everyone loves the chance of getting something for free. Therefore, even if there are a limited number of winners in a giveaway event, the brand can be confident about its instant recognition as the giveaway likely increases brand visibility and customer engagement with the brand. Understanding and leveraging these giveaways for marketing purposes can significantly enhance a brand's outreach and consumer connection.

Business promotional giveaways have the advantages of getting the attention of potential customers and helping brands increase sales. A case study discovers how the KnivesShipFree company achieved huge success with their business promotional giveaways. KnivesShipFree is an e-commerce store selling different types of premium knives online. In early 2020, their company created a monthly rolling giveaway ahead of plans to launch new knives later that year, with winners announced each month. They prepared a series of lightbox popups to collect registration information for the contest. A lightbox popup is a window that appears in the center of a webpage when a visitor is browsing. It uses an overlay to darken the background and partially obscure the webpage content until the visitor closes the popup or takes the desired action, such as signing up for the newsletter, getting special offers, and limited deals. Lightbox popups can grab visitors' attention and grow your email lists. By taking advantage of this opportunity, registrants were added to the company's email newsletter after participating in the monthly contest. The result of this giveaway is astounding — Just 3 months after sending out the contests, KnivesShipFree collected over 5,000 new email addresses and earned more than $4,000 in first-time sales from new subscribers. For some brands, hosting giveaways is not just about gaining followers and subscribers, but also about increasing interaction in brand engagement and reinvigorating relationships with former consumers. In an increasingly competitive market, customer acquisition is a key element of a brand's future success. According to ProfitWell, they reported Customer Acquisition Cost (CAC) has increased by 50% in both B2B and B2C companies over the past 5 years. CAC is calculated by dividing the total cost of sales and marketing expenses to acquire a new customer divided by the number of new customers a company acquired in a given period. It measures how much a company should spend to acquire a new customer. The use of CAC is growing in popularity as companies use it to make data-driven decisions and to determine a company's profitability. Besides looking at CAC, a company should also consider its Customer Lifetime Value (LTV). LTV. LTV is the revenue that a company earns from its customers. A well-balanced company requires its LTV to exceed CAC. The number of people who remain as customers and the amount they spend will greatly impact a company's growth because losing money on each new customer is undesirable. To maintain a brand's sustainability and loyalty, a company should lower its CAC by prioritizing customer engagement and using marketing strategies like business promotional giveaways to target audiences that want cost-effective products. Therefore, running a giveaway is a cost-effective strategy to boost sales, increase customer satisfaction, and improve retention.

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Giveaways for Marketing Success - The Power of "Free" in Consumer Psychology

The best time for a company to host a giveaway is before a new product launch, during the holidays, or to celebrate the company's anniversary. Incorporating giveaways for marketing purposes can significantly enhance brand visibility and customer engagement. Giveaways can leave a positive impression and that in return encourages them to buy more. There are several psychological factors behind giveaways for marketing that can help demonstrate why "free" is compelling. People go through three stages of emotional experiences when they receive free products:

1. Low expectations, people have low expectations towards that free product because it is free;


2. Neutral perceptions, people tend to stay calm and feel nothing when trying the product in particular;


3. Positive impression, if the product is better or more useful than expected, people's perceptions will be elevated from neutral to positive.

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But keep in mind that a customer is more likely to purchase your products and have a good impression of your brand when they receive high-quality and useful giveaways. This phenomenon is also called the Zero Price effect (Shampanier, Mazar, Ariely, 2007). People are unable to make rational decisions about whether an item is worth buying when it is priced at zero. "The word "free" only implies benefits and no costs," said Juan Nicolau, a professor of economics at the University of Alicante. Our decision-making is influenced when it comes to zero benefits. The term affect heuristic refers to our made judgments that heavily relied on our emotions. This is a mental shortcut that allows us to reach a conclusion quickly and effortlessly. This type of heuristic is often used for a range of consumer judgments, including product pricing (zero price effect) and product innovations, etc. When zero-priced items are introduced, customers will take less time to make the purchase decisions because free items have extra pulling power that gives people pleasure. As a result, people often perceive the item as having high potential benefits and ignore possible risks. In other words, when we are offered a free item, we tend to expect so little of the offering, our perceptions become distorted: "there is nothing to lose and why not try it out?" If the item exceeds expectations, people will have left with a positive impression which will gain their trust and most importantly, make a purchase from the company.

Another factor is the principle of reciprocity. The theory of reciprocity refers to the tendency of wanting to give something back when something is received. Giveaways for marketing are one of the strategies to get customers to reciprocate and can be the key to building a long-term, mutually beneficial relationship with the customers. People have a sense of obligation to return favors when someone gave us something beneficial. When potential customers receive free gifts from the company, they will purchase some of its products or services from the company in return for their kindness. Free products are also a means of establishing mutual trust. For example, giving a free sample of a skincare product allows the customer to test them out first before purchasing a full-size product. The company can keep the reciprocation going once the customers have repaid the goodwill by buying your products or accepting your services, by giving them VIP cards or exclusive promotions.