By David Frey
Offering free giveaways to prospects and customer is a powerful business building strategy that can result in a flood of new and repeat spa and pool customers.
It may seem counterintuitive to give away your products and services to build your business; however, people can’t resist the lure of receiving something for free. The word free, as worn out as it may seem, is still the most powerful word in marketing and has a hypnotic effect on people.
Why Free Giveaways Work
The reason free giveaways work so well is two-fold. First, prospects that test your product or service risk-free will hopefully recognize its value and continue purchasing what you offer. Or even better, your prospect will get “hooked” on your product or service and won’t be able to live without it.
Second, the fact that your product or service was given to your prospects as a free gift will compel them to return the favor by continuing to purchase from you. This principle is called the “Law of Reciprocity,” which simply states that people naturally feel an obligation to return favors as a way of expressing their thanks.
The Law of Reciprocity works! For example, the Disabled American Veterans organization reports that its simple direct mail request for donations produced a response rate of 18%. But after they started giving away personalized mailing labels to potential donors their success rate nearly doubled to 35 percent. It worked like a charm.
Know Your Total Customer Value Before Giving Freebies
The key to safely offering free giveaways is to know your “total customer value.” This is the amount of profit you will receive from your spa and pool customer over the total length of your relationship. This figure not only includes business that you will receive from your customer, but also any referrals you may receive from them.
For instance, suppose your average spa customer stays with you for five years and the average spa sale amount is $5,000. Now consider that your average annual chemical sales are $180 ($15/month), parts sales average around $60 a year, and your average customer purchases two spa covers at $160 over the life of their spa.
Hypothetically speaking, your total customer value over the length of your relationship could amount to over $6,520 in total revenue. But wait. What if your customer, whom you have served well, brought you two referrals?
Now, your total customer value will leap from $6,520 to $19,560! Assuming you have a 30% gross margin, one customer could mean $5,868 to your business. Knowing this, how much would you invest to acquire one customer? $100? $200? $300?
The answer is “yes” to all of the above.
Why wouldn’t you invest $100 to gain $5,868 in profits? Coincidentally, this is why most spa and pool business owners are nervous about offering free giveaways. They don’t understand the principle of “total customer value.”
Information – The Ultimate Free Giveaway
Ideally, it’s best to offer free giveaways that are low cost but have a high perceived value to the person you are giving it to. Information is a great example of a free giveaway that has a low product cost and a high perceived value. This is why it’s smart for small businesses to use special reports containing “insider” information as a free giveaway for new customer lead generation.
Your special report could be a written document, an audiocassette, or a video containing subject material that your target market would be interested in. Videos especially have a high perceived value. A valuable reference guide that I use often is “Spencer’s Guide To Special Interest Videos” which has over 13,000 hard-to-find videos.
For instance, the following are some home improvement videos that you’ll find in this guide that you can purchase as free giveaways for your spa and pool prospects:
“101 Hints from Heloise” – The number one name in household management now brings her favorite hints to you on video!
“Attic Conversion” – Step-by-step instruction on how to convert your attic to a conventional and useful additional room.
“Basic Home Repair” – Basic home repair “how-to’s” such as replacing a faucet and toilet, sweating copper pipe, unclogging drains, caulking a tub, replacing light fixtures and switches etc.
“Building a Deck” – Simple steps to building your own deck that anyone can do on their own.
“Ceramic Tile: Floors and Countertops” – Everything you need to know about installing ceramic tile floors and countertops.
“Be Your Own Plumber” – There is no need to call a plumber for minor home plumbing jobs when you have this video program.
“Roofing” – Learn the secrets to re-roofing your home from tearing off old roofing to installing ridges and plumbing vents.
The list goes on. There are hundreds of useful videos that you can give away as a premium to lure customers to your store. There is even a “Saunas & Spas” video that shows you step-by-step how to install a portable spa, an outdoor deck and starting a chemical maintenance program. It also teaches how to build an indoor sauna.
Giving away free informational videos can turn a mediocre offer into a valuable and compelling offer.
Free Giveaway Case Studies
There are a myriad of ways to offer a free giveaway and many effective types of giveaways (other than information) that your spa and pool business can use to attract new and inactive customers. The following are a few ideas on how to give away products or services to build your business:
Idea # 1 – Free Pool Cleaning Services
Offer your pool cleaning services for several months completely free of charge. Once you are onsite, do a thorough pool structural and chemical inspection and present a written report of findings to the owner as your leave.
Idea # 2 – Free Chemicals
Make an offer to pool owners who are not your current customers to receive a free chemical package. When the customer comes in have them fill out a short questionnaire about their pool and chemical usage that you can use to market to them in the future.
Idea # 3 – Free Accessories
Build value by giving away a poplar pool accessory that is low cost to you but has a high perceived value such as a spa side table or a towel rack.
To attract new customers you must offer your free giveaways to prospects that haven’t yet done business with you. Explore the possibility of exchanging a “free gift certificate” stand at businesses that sell complimentary products. You might even partner with a non-competing, but complimentary business and do a joint mailing to each others customer base.
Justify Any Deal That’s “Too Good To Be True”
If your offer that includes free giveaways appears “too good to be true” to your prospect, it could decrease it’s believability and your credibility. To avoid this you should always give the reason why you can offer such a great deal.
It might be that you goofed and are now overstocked, you got a great deal from your supplier, or you just want to say thank you in a meaningful way. Whatever the case may be, give a reason. It doesn’t even have to be a good reason; it just needs to be believable.
Remember, your prospect is very skeptical and has good reason to be. We’ve all been duped at one point in time by a “too good to be true” scam. Furnishing your prospects with the reason why you can offer them such a good deal helps them to logically reconcile your offer in their minds. In turn, this will give your prospect the comfort level needed to act on your offer.
Conclusion
Using free giveaways is an effective spa and pool marketing strategy if used correctly. Think about what you can offer free-of-charge that your prospects would consider valuable and that you can give at a low cost to you. Don’t forget to compute your total customer value so you know how much you are able to invest in attracting a new customer. Lastly, make sure your justify any offers that are just too good to be true.
