How and Why to Use Giveaways and Sweepstakes in Your Marketing Strategy

Why the Free T-Shirt?

Why do sports fans scramble over free T-shirts thrown at sporting events? How can a business give away free pens and increase their bottom line? How can a free sample at the grocery store boost overall daily sales?

Because the word FREE changes our brains. There are reasons why it just “feels better.” Let us tell you how FREE can be a win-win solution for both businesses and their consumers.

How “Free” Changes Buyers Behaviour

First, let’s look at the word FREE from the consumers perspective.

We’ve all been there. Walking around the store, convention center, or sporting event and gravitate to a sign that says “Free [fill in the blank].” When browsing the internet, the word “Free” sticks out like a sore thumb. It seems like we can’t click the button fast enough to see what’s on the other side.

Ever heard of SWAG before? It stands for “stuff we all get” and let’s be honest… we want it all.

Let’s check out a few psychological reasons we, as consumers, find it hard to resist.

No Risk Involved

When you trade your money for a service or a product, you’re taking a risk that it will actually provide as much value as you paid for it.

When you get something for free, the object is perceived as carrying a higher value because you didn’t trade any of your hard earned cash for it.

That’s why it feels so good. It’s a no risk/high reward situation, and WE got the best deal!

Low Expectations

If something is free, what is the worst that could happen? You are not investing anything except a bit of time and attention. Who knows! You might be pleasantly surprised. You never know unless you try!

Bragging Rights

If the item or service has a positive impression, you have something to brag about to your friends or have a new favorite “something”.

You might meet up with your friends and say “Check this out! They are giving them away for free over there!”

Regardless the circumstances, the word free is challenging to resist.

Why Free Products Are Not A Money Waster For Companies

Companies that give away free products as a marketing strategy find it to be one of the best (if not the best) thing they can do for their brand!

At first, spending hundreds or even thousands of dollars on FREE products might be perceived as cutting into the company’s bottom line. However, it can significantly increase overall sales. Let’s look at Costco a store that has used free samples to become the second highest retail store in the world.

These are sales increases after free samples were provided for specific products. Check out the frozen pizza which increased by 600%!

The money spent on giving away free product increases sales overtime so ask yourself:

What is the return on investment of you giving away free product?

Here are some reasons you should absolutely do some form of FREE for your customers.


Free directs the eye on a website or a banner in a store. It’s the fastest way to direct people over to a booth or an easy conversation starter.

I remember going to RC Willey on Saturdays with my Dad just for the free hot dog! Yes, the hot dog did cost RC Willy money, but how many people do they attract to their store just because of a hot dog that cost them less than $1.

Product In Hand

Getting your product into the actual “hands” of the consumer is a win. Not only do they see your logo, they touch, try, and possibly learn about your brand from a representative.

Journal of Marketing article found, when people get an item for free, they are 20% more likely to recommend to others by word of mouth.


Reciprocity sounds like a bad word so let me explain.

Dan Ariely said, “If somebody does something for you, you really feel a rather surprisingly strong obligation to do something back for them.” This isn’t a “scratch my back and I will scratch yours” expectation, rather, a subconscious level of loyalty for the company did something nice for you.

“Be the first to give something. In all circumstances, the person who gives first is in control. Whoever is on the receiving end of your gift is then in your debt. And that is the situation you want to create and maintain.” (The Rule of Reciprocity)

Even if you only get a few good online reviews, the effort is worth it. People trust a good online review 84% as much as a personal recommendation.  Have confidence that no effort goes unnoticed when you are the first to give.

Builds trust

If the item provides some satisfaction, it will leave a positive impression on the brand and company! In return, this builds trust and a better chance of doing business in the future. For example, back in the late 1800s, an estimated one-in-nine Americans received a free Coke from local pharmacies totaling 8,500,000 free drinks given away!  By 1895, Coke was being served in every state and a staple of the American diet. Today, Coke products are the worlds best selling carbonated drink. (Coupon Sherpa) I bet they are glad they gave those free drinks away!

Companies that understand the psychology behind FREE create a favorable brand image, deliver happiness to new and returning customers and boost long-term profitability and sales. Let them have a test drive on what you offer. A good experience will keep them coming back.

SO…What Are Your Options?

There are plenty of ways to incorporate some sort of FREE into your business strategy. Here are some creative ways that will add value to your brand.

Health Benefits Of Free

In 2012, Professor Paul J. Zak discovered that customers who received a $10 voucher experienced 38% higher oxytocin levels which made them 11% happier. It didn’t stop there! The participants had a 5% decrease in heart rate and 32% drop in respiratory rate. Pretty cool! So even a small discount can make your customers happy.

At Woobox, we are dedicated to helping you grow your business in the best ways! Sign up today and take advantage of plenty of features as well as great articles to direct you in your ventures.

The best part? You guessed it…

There’s a FREE plan that you can try it with today!