Free gifts are small items given to customers without any charge as a way of attracting them to start buying the product. This enables customers to enjoy a certain product without necessarily buying it hence he or she will be able to decide whether to go for the good or not.
Pros of Free Gifts
- It increases customers satisfaction
The customer will be able to go for the good now that he or she will be sure of the product he or she is going for and the side effects of the products.
- It attracts customers
Free gifts may attract customers who may decide to go for the product hence improving the quality of sales to the company.
- Setting standards
The company will be able to set standards for the product in the market. By giving free goods the company may eventually bring the real good to the market and put it at a high price hence getting back the money that was used on the free samples that were used by the customers and they liked the product.
- It may attract customers to buy a large volume of goods to get the gift
Some companies will put the free gift on a certain amount of volume of goods. This may make the customer go the extra mile so that he or she can reach the target in order to get the free gift. This will also increase sales of other related goods as they will really be bought.
- May help create loyalty to the company
The company may get earn loyalty from the clients and this will really make the customers go for the good because they are sure that the goods are of good quality.
Cons of Free Gifts
- Some middlemen may keep away the gift
There is a challenge of some middlemen putting away the free gift hence not reaching the intended clients. This may make the clients think that the company is only luring them to buy the product and in a real sense, the gift is not there hence tarnishing the name of the company.
- It may lead to impulse buying
A customer may end up buying goods that he or she does not need in order to get the free gift which will be a waste of finances as well as the resources to the buyer.
- Highly costly
It may really be costly for the company to produce the goods that will be given as free gifts to the customers. The expense is to be met by the company which may turn out to be a heavy burden.
- No guarantee that the customer would buy the good
Some of the customers may only take the free gift and in the end may not really buy the goods due to one reason or another. This may end up really costing the company as the expenses that were met in the production of the free goods will be met by the company hence running at a loss.
Free goods are an expensive way of promoting a product and the returns may be low hence not meeting the expenses that were used in the production of the goods.