by John Larkin
John runs the blog here at eCommerceLift and is a verified Shopify Expert. Interested in an initial growth consultation? Click here
8 years ago
Giving your Product Away for Free? How Brands Prosper with Competitions
Pretty much all eCommerce retailers have the same experience. You are trying to grow your business while competing with rivals who can better you on price, promotion or even service. For most eCommerce retailers, and especially start-ups, each and every sale is something to be celebrated. So the notion of giving your product away for free... well that just seems counter-intuitive to most of us.
Here at PropelAd, one of our goals is driving people from your social media profile to your website. Facebook, Twitter or Pinterest show who you are and are great for getting your message out there – but in terms of cold, hard cash – getting customers to your website and online store has to be the endgoal.
The truth of the matter is – sometimes it makes sense, real business sense, to give away your product. Competitions and giveaways can drive business towards your site, provide you with leads to explore in the future and even help you determine the demand for your product.
The key is to move away from the notion of “giving your product away for free”. Yes, you are giving it away, but if you do it right, you can receive far more back in return than the cost of giving away some products.
You are not just giving it away for free. An effective competition can capture customer data, increase the traffic to your website, increase your social media followers and ultimately, help you reach customers that might not have heard of you.
Competitons can provide a valuable way to gather customer information. When entering a competition, a customer is likely to provide really accurate information about themselves – it makes sense – they will tell you where they live so that you can contact them when they win. Market research is usually really expensive – but here is a way you can get customers to volunteer their information – without hiring a pricey market research firm to gather it for you.
We will now look at some examples of brands that used competitions to drastically increase their sales.
Here at PropelAd, one of our goals is driving people from your social media profile to your website. Facebook, Twitter or Pinterest show who you are and are great for getting your message out there – but in terms of cold, hard cash – getting customers to your website and online store has to be the endgoal.
The truth of the matter is – sometimes it makes sense, real business sense, to give away your product. Competitions and giveaways can drive business towards your site, provide you with leads to explore in the future and even help you determine the demand for your product.
The key is to move away from the notion of “giving your product away for free”. Yes, you are giving it away, but if you do it right, you can receive far more back in return than the cost of giving away some products.
You are not just giving it away for free. An effective competition can capture customer data, increase the traffic to your website, increase your social media followers and ultimately, help you reach customers that might not have heard of you.
Competitons can provide a valuable way to gather customer information. When entering a competition, a customer is likely to provide really accurate information about themselves – it makes sense – they will tell you where they live so that you can contact them when they win. Market research is usually really expensive – but here is a way you can get customers to volunteer their information – without hiring a pricey market research firm to gather it for you.
We will now look at some examples of brands that used competitions to drastically increase their sales.
Ford Fiesta
The compact car market has long been a buoyant one in Europe, but in the US, it was a different matter until relatively recently. Cheap gasoline, low taxes and an almost non-existent environmental policy meant that cheap, fuel-efficient cars were not a priority for American motorists. Between 1997 and 2009, Ford didn’t even sell a “subcompact” car in the US.
But in 2009, Ford decided they were going to relaunch the Fiesta, already a success in Europe and Asia, into the American market. They decided to promote this fact via a campaign they called “The Fiesta Movement”.
Basically, this was a competition whereby Ford gave 100 people a Fiesta for six months. They then had to complete a different mission every month. Ford didn’t overly burden the contest winners with instructions – they just had to do something with the car – and document it online (YouTube, Facebook, Twitter and Flickr).
Some winners used their cars to deliver Meals on Wheels, some used them to bring nursing home residents to church, some used them to bring all their friends to music festivals.
According to Businessweek, “The effects of the campaign were sensational. Fiesta got 6.5 million YouTube views and 50,000 requests for information about the car—virtually none from people who already had a Ford in the garage. Ford sold 10,000 units in the first six days of sales. The results came at a relatively small cost. The Fiesta Movement is reputed to have cost a small fraction of the typical national TV campaign.”
Bud Caddell, of Undercurrent, the marketing firm who came up with the idea of the “Fiesta Movement” said, “ We wanted to make contact with a very specific group of people, a passionate group of culture creators. The idea was: let's go find twenty-something YouTube storytellers who've learned how to earn a fan community of their own. [People] who can craft a true narrative inside video, and let's go talk to them.”
“People are not just telling stories for the sake of telling stories, though certainly, these stories have their own rewards. They were making narratives that would create economic value. The digital space is an economy after all. People are creating, exchanging and capturing value, as they would in any marketplace. But this is a gift economy, where the transactions are shot through with cultural content and creation. In a gift economy, value tends to move not in little "tit for tat" transactions, but in long loops, moving between consumers before returning, augmented, to the corporation.
“In this case, adventures inspired by Undercurrent and Ford return as meaning for the brand and value for the corporation.”
Lilly Pulitzer:
Lilly Pulitzer is an online retailer (it was an established “traditional” retailer too with over 50 years experience) that sells really brightly coloured clothing, diaries and accessories. One of their key items is called the “Agenda” – which is basically a diary – but in the vivid colours and patterns that are the company’s trademark. The company decided to run a competition to give away 50 of these “Agendas”. To enter the competition you had to register your personal details and e-mail, select your favorite Agenda and share out to your friends.
The results, again, were fantastic. They captured over 9000 email addresses, 23,000 likes and over 40,000 page views on the landing pages of the completion. And perhaps most importantly, there was a 200 percent return on investment in orders within the first 10 days of the “Agendas” launching.
Rachel Crews, the eCommerce manager at Lilly Pulitzer said “In today’s digital world, a marketer’s biggest challenge is to practice accountable social marketing. We really see the value of online and social media communities. Lilly Pulitzer is a brand that is passed down from generation to generation of women. What better way to reach like-minded and connected women than on Facebook and Lillypulitzer.com. We found that competitions allow us to add reach to our digital campaigns and talk to consumers via in-app mobile ads that are respectful of user experience.”
Competitions are one of the cheapest and most effective tools an eCommerce retail store can use when trying to reach new customers – but they are also massively effective when it comes to retaining your current customers too. There is nothing more irritating than opening your emails to see your inbox flooded with emails from retailers offering you absolutely nothing. But an easy-to-enter competition? That’s something different altogether.
The compact car market has long been a buoyant one in Europe, but in the US, it was a different matter until relatively recently. Cheap gasoline, low taxes and an almost non-existent environmental policy meant that cheap, fuel-efficient cars were not a priority for American motorists. Between 1997 and 2009, Ford didn’t even sell a “subcompact” car in the US.
But in 2009, Ford decided they were going to relaunch the Fiesta, already a success in Europe and Asia, into the American market. They decided to promote this fact via a campaign they called “The Fiesta Movement”.
Basically, this was a competition whereby Ford gave 100 people a Fiesta for six months. They then had to complete a different mission every month. Ford didn’t overly burden the contest winners with instructions – they just had to do something with the car – and document it online (YouTube, Facebook, Twitter and Flickr).
Some winners used their cars to deliver Meals on Wheels, some used them to bring nursing home residents to church, some used them to bring all their friends to music festivals.
According to Businessweek, “The effects of the campaign were sensational. Fiesta got 6.5 million YouTube views and 50,000 requests for information about the car—virtually none from people who already had a Ford in the garage. Ford sold 10,000 units in the first six days of sales. The results came at a relatively small cost. The Fiesta Movement is reputed to have cost a small fraction of the typical national TV campaign.”
Bud Caddell, of Undercurrent, the marketing firm who came up with the idea of the “Fiesta Movement” said, “ We wanted to make contact with a very specific group of people, a passionate group of culture creators. The idea was: let's go find twenty-something YouTube storytellers who've learned how to earn a fan community of their own. [People] who can craft a true narrative inside video, and let's go talk to them.”
“People are not just telling stories for the sake of telling stories, though certainly, these stories have their own rewards. They were making narratives that would create economic value. The digital space is an economy after all. People are creating, exchanging and capturing value, as they would in any marketplace. But this is a gift economy, where the transactions are shot through with cultural content and creation. In a gift economy, value tends to move not in little "tit for tat" transactions, but in long loops, moving between consumers before returning, augmented, to the corporation.
“In this case, adventures inspired by Undercurrent and Ford return as meaning for the brand and value for the corporation.”
Lilly Pulitzer:
Lilly Pulitzer is an online retailer (it was an established “traditional” retailer too with over 50 years experience) that sells really brightly coloured clothing, diaries and accessories. One of their key items is called the “Agenda” – which is basically a diary – but in the vivid colours and patterns that are the company’s trademark. The company decided to run a competition to give away 50 of these “Agendas”. To enter the competition you had to register your personal details and e-mail, select your favorite Agenda and share out to your friends.
The results, again, were fantastic. They captured over 9000 email addresses, 23,000 likes and over 40,000 page views on the landing pages of the completion. And perhaps most importantly, there was a 200 percent return on investment in orders within the first 10 days of the “Agendas” launching.
Rachel Crews, the eCommerce manager at Lilly Pulitzer said “In today’s digital world, a marketer’s biggest challenge is to practice accountable social marketing. We really see the value of online and social media communities. Lilly Pulitzer is a brand that is passed down from generation to generation of women. What better way to reach like-minded and connected women than on Facebook and Lillypulitzer.com. We found that competitions allow us to add reach to our digital campaigns and talk to consumers via in-app mobile ads that are respectful of user experience.”
Competitions are one of the cheapest and most effective tools an eCommerce retail store can use when trying to reach new customers – but they are also massively effective when it comes to retaining your current customers too. There is nothing more irritating than opening your emails to see your inbox flooded with emails from retailers offering you absolutely nothing. But an easy-to-enter competition? That’s something different altogether.
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