Free welcome offers are a brilliant way for small businesses to win and keep customers. They provide ways of engaging with people at the consideration stage of buying; it can help them to decide that your company offers what they want. We’ve highlighted four examples of companies and industries that use free welcome offers. These examples explain why they’re great tactics and how your small business can apply the lessons they provide.
Take Tips from Streaming Sites (like Spotify)
Streaming sites have mastered the art of using free welcome offers to get people hooked on their products and turn them into customers. The idea is simple: offer a free trial period where you can use the product for nothing.
The genius of this strategy is that you allow people to learn to love your product in their own time. This relieves the pressure of having to spend money to find out if they do like a product; this removes one of the key sales barriers.
There are many great examples of this approach being put into practice and Spotify is perhaps the most notable. For no cost, you can get a 60-day free trial to use the service. This is enough time for Spotify to become a part of peoples’ everyday lives. So when it comes to the end of the trial period, they don’t want to give it up and opt to pay for it.
This tactic is given added effect by the fact that you have to enter your bank details to sign up and make a conscious decision to opt out of paying for it, otherwise you automatically become a customer.
If you run a small SaaS company, then this will be a simple approach to use. Where you might encounter problems is if you sell physical products, such as clothing. The reason for this is that you’ll lose money if your customers use your products and then return them.
Observe the Methods Used by Credit Card Companies
Credit card companies are experts at using free welcome offers. They often encourage customers to interact with their product and get more custom from them. It’s a straightforward approach: get people to sign up and then give them rewards when they hit certain spending targets.
The brilliance of this approach is your customers have to invest money into your business to get the free welcome offer you’re giving them. This means that you get a guaranteed income for your offer, reducing the risk of making losses from it.
Reward points are how this sign up tactic is used by credit card companies. There are various ways your small business can use this welcome offer. You could use a tiered approach; they buy one product to earn X amount of points and get XX amount of points for purchasing two items. Or you could devise a different reward program — whatever works for your small business.
Learn from Online Delivery Services (like Bloom and Wild)
Delivery services are outstanding at enticing new customers. They generally use free welcome offers that give customers discount coupons on their first purchase. It’s not rocket science — you give people money off the items they buy as a welcome gift.
What makes it such a great tactic is that it incentivizes customers to act now, for fear that the discount may not be there if they hold back on buying the items it can be used on. There’s also nothing new about this method.
Indeed, Coca Cola is believed to have invented the coupon tactic back in 1888 by offering customers a free glass of Coke. This means it’s something used by a huge number of businesses, with Bloom and Wild being one of the best at putting it into practice.
Bloom and Wild gives customers a 10% discount on the first items they order. This means it’s not an entirely free offer, with just a small amount of the goods being given to customers for free. What’s really impressive is Bloom and Wild continues to offer 10% coupons after you’ve made your first purchase. This means it’s great for both acquisition and retention.
Your small business could follow the exact example set by Bloom and Wild, giving a first purchase discount and then sending out regular coupons to your email list. You can also expand on the approach by doing things like giving discounts for recommending new customers.
Follow the Examples Used by Online Casinos
Online casinos are exceptional at giving their players free welcome offers that gamify the process of customer acquisition. It’s an uncomplicated tactic: give your customers free access to an element of your product/service offering.
What’s so clever about this is that gamification builds an emotional connection (happiness, intrigue, excitement) between customer and product. This is exactly the sentiment you want your customers to have about your products — to feel good about using them.
There are lots of ways your small business can gamify the free offers you give to your customers. It could be a rewards system similar to those used for supermarket cards and credit cards, where you earn points and get ‘prizes’ for doing so. Alternatively, if your company is in the gaming industry, then you could just follow the lead of online casinos by giving out free plays on the game(s) you sell.
The Bottom Line
Streaming sites, credit card companies, online delivery services and online casinos all offer great lessons on how your small business can use free welcome offers to attract and retain customers. While not all of the examples used in this article will be an exact match for your company, each of them can be applied in a way that helps your business to flourish. So, decide which of these four lessons can be used first, try it out, then make your way through the other three.