Pros and Cons to Promotional Giveaways as a Business Strategy - Growth Freaks

Pros and Cons to Promotional Giveaways as a Business Strategy

promotional giveaways

Sometimes, less is better than nothing. But how often would that work? Some businesses always struggle to keep up with the competition, and as such it might be preferable to offer some promotional giveaways. But is it really worth it? Let’s see.

Pros and Cons of Promotional Giveaways

Pros of Promotional Giveaways

Offering promotional giveaways is a neat way to attract more customers. You can attract an exponential percentage of new customers by offering them promotional giveaways (or freebies).

This will drive traffic to your store. Especially if you’ve gone digital. However, you must be careful, as it may have a negative impact on your business, as we will later see in the Cons section.

Another great benefit of offering freebies is for new businesses. If you’re an emerging company, then you might want to make your portfolio of potential and actual customers. As such, offering a promotional giveaway will attract customers. This way, for first-time buyers, you can offer them a freebie only because they’re new (as long as they buy something) as regards you, as a seller/ service provider.

So, by using freebies (buy something, get something free; or buy this, and get the next one free), you’re not only engaging with your customer, but you’re also making sure that your database is growing. You can offer promotional giveaways by asking the (potential) customer to either use his full name & mail address to receive the (e-coupon) or to receive it at the register, in your store.

Cons of Promotional Giveaways

Keep in mind that, nonetheless, if not used appropriately, the practice of promotional giveaways can ruin you and your business. For example, there might by price or gift shoppers, who will only visit you on a giveaway basis. These shoppers are different from your customers because they don’t look to get a product with or without a deal. They only want the giveaway. So make this a random practice, or as occasionally as possible. Otherwise, your clients might get the hang of it. And this means lower or lost revenue.

Also, think about your loyal clients. If they feel betrayed by the fact that you’re giving these promotional giveaways to the new clients too often, maybe, they will leave you and go with someone else. In other words, offering too many times giveaways can ruin your brand. Or make you seem too cheap, especially for the elite clientele.

One final con of using promotional giveaways as a marketing strategy is as follows. While creating buzz and engaging your customers or attracting new ones, you might be put in the position of having, laterwards, to negotiate with those shoppers mentioned above. So you might have to steadily negotiate with them because they’re saying this: “If you won’t give this for free or at a lower price, I’m going to your competitor”. Thus, it won’t be good for business. Or it might very well start a price war. And then one will go into bankruptcy. That would be disastrous.

As such, be careful how you manage and organize your promotional giveaway marketing strategy as to not go into a descending spiral where you’ll only lose, and not gain anything. Be smart and clever, outweigh the pros against the cons. And you’ll only have to gain, not lose.

Image source: ileads.com

Author: Amanda Knowles

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