Giveaways as Marketing for Small Business

[dogememe]

I know there are a bunch of business owners on here, so I'd love some input on a marketing plan that I came up with. I got this idea yesterday when I was behind a work van of some company, and they had an advertisement for something simliar on the back... you could enter to win a free service (it was a completely different industry).

I'm a small business owner entering a highly competitive industry. I have a decade of experience in the industry, but I'm starting my company and brand fresh after working for a friend's company for the last couple years, and just doing it casually freelance before that. Instead of investing heavily in traditional marketing, because that didn't work too well for my friend's company, I'm considering a strategy of offering free services to gain visibility.

Has anyone tried a similar approach? My plan is to promote the giveaway through targeted Facebook ads, which are cost-effective for reaching local customers, and rely on organic word-of-mouth in the community to reach more people, since not everyone is active on Facebook.

My service, valued at $1,200 on my website, costs me little beyond my time. While my expertise and time are valuable—core to what customers pay for—this promotion is designed to quickly and affordably showcase my business to potential clients.

I plan to give away one free service each month for the foreseeable future. With my current schedule at my other job, I can handle 3-5 paying clients monthly alongside the giveaway. The service also offers potential recurring revenue of $10-$60 per month per client.

Not only would this get my business in front of a bunch of potential customers, but I'd also be giving back to the community. I know running a small business is expensive... whether it's through my current full-time job and/or my previous job in my industry, I talk to small business owners on a daily basis. People are struggling with the price of everything, and a free (the thing I provide) could really help them.

By making it a giveaway with a random winner, I don't have to choose someone. Yes, I'd have some terms and conditions about who is eligible, and they'd sign an actual contract as if they were a paying customer, to protect both me and them. People that don't win could always re-apply next month.

Does this sound like a viable strategy, or is it crazy? Any feedback or experiences with similar promotions would be appreciated!

 

[Zee09]

Since it's mostly your labor than it shouldn't be too bad and I'm sure you'll cut it off if it becomes a problem..

Years ago I did many promo codes.
A bit of a hassle as I gave all requirements upfront but after the sale many wanted the promo price even if they didn't follow the rules.

In the end if I didn't have a promo code people wouldn't buy....
I had people wait for the promo to buy a $3 item...

Best of luck

 

[demarpaint]

Hard to tell w/o knowing what the service is, or what the recurring revenue is based on. For me more info is needed.

 

[mk378]

You have to be careful as there are a lot of rules about running a sweepstakes or contest even if there is no entry fee.

 

[dogememe]

Hard to tell w/o knowing what the service is, or what the recurring revenue is based on. For me more info is needed.

I kept it intentionally vague, sorry. I don't feel comfortable disclosing what the service is, and although it's not hard to figure out, I'd prefer if anyone who does know what I do, wouldn't post it in this thread

 

[dogememe]

You have to be careful as there are a lot of rules about running a sweepstakes or contest even if there is no entry fee.

I may have to pay a lawyer to help me write the terms and conditions for this, but I think that will still be cheaper than traditional marketing haha.

 

[demarpaint]

I kept it intentionally vague, sorry. I don't feel comfortable disclosing what the service is, and although it's not hard to figure out, I'd prefer if anyone who does know what I do, wouldn't post it in this thread

Gotcha, tough for me to give an opinion. Good luck, with whatever you do decide, I hope it works well for you!!

 

[Boomer]

My son sells HVAC equipment all over PA for a privately owned company. What his customers really go for is a new desk calendar at the end of the year and a T-shirt/i jacket with his company name and logo. Everybody gets the same and no paperwork/POd people who did not win. If you only have a dozen customers to start with, this should not be a big expense for you.

 

[2005jettatdi]

I have used pens, notepads, etc. The best advertising is still word of mouth.

13 years ago newspaper still worked. That is over. What I did to build my practice here was to advertise in the local paper with articles on income taxes. People loved them. I think informative advertising is best for any business. I would not bother now because no one reads the paper any more.

 

[02SE]

When I started my business, I went into it knowing I was primarily competing with a company that sold nationally, whereas I would just be a region of a few States. It was difficult to break into the market as potential customers knew the other company, and my company was an unknown. For several years I had to sell at a loss, in order to have a hope of winning bids.

After awhile, customers realized I was selling a better product, with better customer support, at a better price. Gradually I was able to win bids while making a profit, because customers knew they would get a better product and service, even if I was no longer the absolute lowest bid. So for me success was due to superior customer service, and simply a better product, even if I wasn't the cheapest.

I never had any promotions or advertising, as I was dealing almost exclusively with Government entities, and taxpayer dollars. Ultimately the best 'advertising' was simply word of mouth, and people in charge of making purchasing decisions, knowing what they would get.

I built that company into a success, and then sold it when I got an offer too good to refuse.

I will say there has never been a more stressful time in my life, than when trying to make that business successful. I worked far harder than any boss could legally make me work as an employee. Ultimately the struggle was worth it, but there was no guarantee it would work out.

I wish you the best in your venture.

 

[97prizm]

I know there are a bunch of business owners on here, so I'd love some input on a marketing plan that I came up with. I got this idea yesterday when I was behind a work van of some company, and they had an advertisement for something simliar on the back... you could enter to win a free service (it was a completely different industry).

I'm a small business owner entering a highly competitive industry. I have a decade of experience in the industry, but I'm starting my company and brand fresh after working for a friend's company for the last couple years, and just doing it casually freelance before that. Instead of investing heavily in traditional marketing, because that didn't work too well for my friend's company, I'm considering a strategy of offering free services to gain visibility.

Has anyone tried a similar approach? My plan is to promote the giveaway through targeted Facebook ads, which are cost-effective for reaching local customers, and rely on organic word-of-mouth in the community to reach more people, since not everyone is active on Facebook.

My service, valued at $1,200 on my website, costs me little beyond my time. While my expertise and time are valuable—core to what customers pay for—this promotion is designed to quickly and affordably showcase my business to potential clients.

I plan to give away one free service each month for the foreseeable future. With my current schedule at my other job, I can handle 3-5 paying clients monthly alongside the giveaway. The service also offers potential recurring revenue of $10-$60 per month per client.

Not only would this get my business in front of a bunch of potential customers, but I'd also be giving back to the community. I know running a small business is expensive... whether it's through my current full-time job and/or my previous job in my industry, I talk to small business owners on a daily basis. People are struggling with the price of everything, and a free (the thing I provide) could really help them.

By making it a giveaway with a random winner, I don't have to choose someone. Yes, I'd have some terms and conditions about who is eligible, and they'd sign an actual contract as if they were a paying customer, to protect both me and them. People that don't win could always re-apply next month.

Does this sound like a viable strategy, or is it crazy? Any feedback or experiences with similar promotions would be appreciated!

I detailed vehicles for many years. When the local pool hall/ poker place had fundraisers every year. I'd donate a coupon for one free wash and wax valued at $150. It almost always went for more than that at auction. Do other similar businesses in your area offer similar promotions? What type of industry are you in?

 

[97prizm]

When I started my business, I went into it knowing I was primarily competing with a company that sold nationally, whereas I would just be a region of a few States. It was difficult to break into the market as potential customers knew the other company, and my company was an unknown. For several years I had to sell at a loss, in order to have a hope of winning bids.

After awhile, customers realized I was selling a better product, with better customer support, at a better price. Gradually I was able to win bids while making a profit, because customers knew they would get a better product and service, even if I was no longer the absolute lowest bid. So for me success was due to superior customer service, and simply a better product, even if I wasn't the cheapest.

I never had any promotions or advertising, as I was dealing almost exclusively with Government entities, and taxpayer dollars. Ultimately the best 'advertising' was simply word of mouth, and people in charge of making purchasing decisions, knowing what they would get.

I built that company into a success, and then sold it when I got an offer too good to refuse.

I will say there has never been a more stressful time in my life, than when trying to make that business successful. I worked far harder than any boss could legally make me work as an employee. Ultimately the struggle was worth it, but there was no guarantee it would work out.

I wish you the best in your venture.

If running a business was so easy I think everyone would do it. It truly is mindboggling all the aspects of starting and running a business. I give praise to families that own and run multiple restaurants. A couple in my town own four or five different restaurants.

 

[duck__dodgers]

IMO....

don't make it random. Make the "winners" high visibility targets who'll generate word of mouth: schools (public/private), local emergency services, VFW hall, food bank, local Rotary club, local sports boosters, etc. (or whatever target can make the best use of your services)

 

[SC Maintenance]

You need to identify your target audience. The older and wealthier someone is the less likely they are to sign up for your promotion. This is not good or bad, but if your target is the good side of the tracks, it will be less successful. If your targeting younger or less affluent - it might be very successful.

If the purpose is promotion, you might do better to give your service away to a visible charity - if they need your service of course. Something like an animal shelter or senior center or whatever - in exchange for posting a sign saying "provided by you". Just a thought.

Most advertising fails because companies fail to identify their target and their objective.

 

[97prizm]

You need to identify your target audience. The older and wealthier someone is the less likely they are to sign up for your promotion. This is not good or bad, but if your target is the good side of the tracks, it will be less successful. If your targeting younger or less affluent - it might be very successful.

If the purpose is promotion, you might do better to give your service away to a visible charity - if they need your service of course. Something like an animal shelter or senior center or whatever - in exchange for posting a sign saying "provided by you". Just a thought.

Most advertising fails because companies fail to identify their target and their objective.

As much as I despise social media, if you have customers that have millions of viewers you may have people lining up for your services. A really cool example on YouTube recently in Oklahoma City a guy with a hotdog restaurant wasn't selling much. A Youtuber highlighted His business and immediately started having customers come in droves.

 

[The_Jeff]

The TV station I worked at had a promotion deal where they advertised local businesses and sold (gift) certificates for half off. The business gave the station the certs for free in exchange for the on-air promotion. While, yes, people would see the ad and buy the certificates, there would be others who see the ad and think of you when they're ready to buy.

Media like this is shady, though, and make sure you get on-air promotion and not just the station website, which will only catch the eyes of penny-pinchers looking for a deal.

 

[Pablo]

You need to identify your target audience. The older and wealthier someone is the less likely they are to sign up for your promotion. This is not good or bad, but if your target is the good side of the tracks, it will be less successful. If your targeting younger or less affluent - it might be very successful.

If the purpose is promotion, you might do better to give your service away to a visible charity - if they need your service of course. Something like an animal shelter or senior center or whatever - in exchange for posting a sign saying "provided by you". Just a thought.

Most advertising fails because companies fail to identify their target and their objective.

This. When we started we had no idea there were so many people who lost their licenses to drive because of EtOH - this, along with young guys and geezers with money would be our 3 core customers. Married and kids? Nope. Point being we started blind - but meetups and web forums and trade shows freebie stuff - the good stuff went to the core.

 

[SC Maintenance]

As much as I despise social media, if you have customers that have millions of viewers you may have people lining up for your services. A really cool example on YouTube recently in Oklahoma City a guy with a hotdog restaurant wasn't selling much. A Youtuber highlighted His business and immediately started having customers come in droves.

Well yes, but were back to target audience. If one of my 23 yo daughters million follower influencer channels promoted life insurance, they likely would get zero sales. If the channels I watch on youtube advertised make-up - they also would get zero sales

 

[Doc8404]

They say pens, good ones, are better than business cards because they get passed around.

I use Amsterdam Printing but am open to other suggestions.