The Real Cost of the Free Sample
The free sample is a staple of marketing. Just spend an hour walking through Costco or perusing a money-saving mommy blog. Look at the number of people who will give up a Facebook “like” in order to get one or how many friend’s email addresses they’ll pimp out in return.
The trouble is, free samples aren’t free for the business who provides them. They actually cost quite a bit of money, particularly if they have to be shipped to thousands of people. Consumers don’t get this. Especially if they’re asking a business to donate an item to a local charity. Consumers think, well, you’re making cookies anyway, so what’s the big deal about making two dozen more in support of the youth soccer team? After all, it’s good advertising for your company, right?
Cowboy Dan will tell you what the problem is. It’s Marketing Opportunity Bingo and you don’t always win.
Cowboy Dan is the CEO of Liz Lovely bakery. They made the spice cookies that arrived in my Foodzie box this month and I’m sure they hoped that free sample would make me go to their website to buy more. I did go and I found this excellent blog post about the real cost of providing free samples. Says Dan,
“Business is like bingo, not everything that’s offered helps you win.”
He says that if sample cookies and donations don’t lead to a direct link back to his company’s website, then they probably aren’t worth doing. That’s why he won’t give to a celebrity gifting suite but will give to a food blogger.
Ah, but what if a big star tasted his cookies at a gifting suite, fell in love and ordered 2,000 of them for a private party? It could happen, right? That’s where the cost of the sample comes in. Let’s say you could make the cookies for $100. Is that worth spending on potential word of mouth from influential people? In the blog Dan says, “Will a picture of Lindsay Lohan holding your [insert product here] really increase your sales?” In some cases, it will.
I live in the world of TV fandom and we often joke about the unexpected rise in sales when our favorite TV star offhandedly mentions a book he just read or a movie he saw on a plane. Lindsay Lohan may not work for your cookies, but if Justin Bieber is photographed holding your hair gel sales are going to go through the roof. Just look at the recent brouhaha when Tom Cruise’s daughter was inadvertently photographed holding naughty gummies. The store couldn’t keep them in stock.
So is it always worth it to give our free samples? No. Simply handing out freebies is no guarantee you’ll make it back in return business. Should you always say no to free samples? No. There are times when just the word of mouth will be worth the cost of the product.
How do you know when to say no and when to say yes? Trial and error. Figure the cost of providing free samples as part of your marketing budget. Then find away to carefully track return sales. It could be with a special code or a website affiliate tag.
Finally, if Justin Bieber asks you for a free sample, always say yes, then make sure you take a photo and blast it all over the internet. Then prepare for the onslaught of sales like your company has never seen before.
Do you give out free samples? We’d like to hear your thoughts on when to say yes and when to say no.
Oh, and Cowboy Dan, if you’d like to send a free sample of your Liz Lovely Peanut Butter Classic cookies my way, feel free.