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Marketing Tactics

4 Creative Ways To Use Free Samples To Grow Your Business

All you coupon clipping customers out there know exactly what that means.

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As a consumer, I’m a big fan of free samples. (And who isn’t?) I love getting stuff for free, trying new stuff risk-free. Costco is a favourite store of mine for this reason.

And, again for this same reason, as an entrepreneur I’ve been collecting creative strategies for using free samples in my business. You might want to try them, too.

In particular, small businesses can learn a lot about free samples from the world of SaaS (software as a service).

Online software services have a variety of pricing models, but most of them offer something along the following lines:

  • A one-month free trial
  • Data for one domain at no cost
  • A sign-up for the basic plan for free.

Most SaaS companies know that people hesitate about signing up for a new service.  But, offering a free trial means you can see what the service is like, with no risk. SaaS companies also understand that somebody already using their service for free is more likely to upgrade to a paid subscription than is a total stranger.

Here are four creative ways to turn free samples into bigger profits, whether yours is a SaaS business or not.

1. Free samples as part of your branding

natures-path-cereals-logo

This week, I am the proud owner of two huge boxes of Nature’s Path cereals, thanks to a taste test last week at Costco. Already, the brand is one of my favourites. I even found a flavour my wife and daughter would like, and discovered that I pay less at Costco than at my local store. That free sample probably sold me dozens of boxes of cereal over the months to come.

What is also amazing about Costco is how it has made free samples part of its broader marketing plan. There are times when we’ve gone to Costco just because our stomachs were getting grumpy and there was free food to sample while we shopped.

Even if the store had not sold me cereal this week, free samples are a form of in-store entertainment. Costco has probably sold us hundreds of dollars of various products, just by pulling us into the store for the samples.

Another example? The Cora breakfast/lunch chain offers people a free sip of mango smoothie while they wait to be seated and a free “sucre à la crème” while they pay (my kids love that part!). I wonder if some people go to Cora just for the freebies – or maybe even subconsciously.

2. Free samples as a customer bonus

recreate-yourself-logo

My Australian friend found that she gets free samples when she orders her hair products. Recreate You sends “2 Free samples with every order.”

To the consumer, it’s a nice bonus gift.  It’s like getting more than you paid for. For the company, it’s a way to expand the number of products it sells to each customer.

Taking a page out of the SaaS handbook, once consumers use even a sample of a product, they are more likely to buy it than if they have to pay for a whole bottle just to try it. If each customer ends up buying one new product as a result of the free samples, the company has just doubled the value of each customer.

3. Free samples to kick-start a new business

Every start-up knows how hard it is to make waves in this era of information overload. Offering free samples is one way to get people to stop and take note.

If I was to open a restaurant, I would have someone standing outside the door offering a free sample of one of the signature dishes to everyone who walked by, along with a business card or take-out menu or whatever publicity I had.

Bar a bar called Louie did something similar, creating enough buzz that people came out just to try its free cucumber martinis.  They created so much buzz that people were talking about it in social media for days.

4. Free samples to sponsor an event

thecolorrun-south-africa

People build an affinity for events in which they participate. When my daughter and I ran The Color Run this summer, we trained for a couple of months.  When it was over, we took home souvenirs.

Sponsoring events is great branding, because you connect with your audience members where they are emotionally invested.  So, what a great place to offer free samples: The official sponsors of The Color Run were Fruit2O and Sally Hansen. Specifically, Fruit2O offered free drinks for hydration, which I certainly appreciated. And we saved a couple of the little cups; we still use them.

Sally Hansen, meanwhile, left an array of nail polish colors sitting out on tables for runners to try, post-run.  I declined. But my daughter had fun plastering her nails with the samples.

Similarly, Artic Ease used a similar strategy at the run. Its cold wraps are designed to ease pain after an injury, but they work just as well on sore muscles after a really good workout. Although we had just run three miles that day, consider that marathoners run 26 miles.

Imagine how sore their muscles are when they reach the finish line; imagine how grateful they are when someone provides relief!

In fact, Arctic East shipped 80,000 samples to the Chicago and Philadelphia Marathons. How many runners went on to buy them at full price later, to use for training for their next run?

Free samples are a versatile marketing tool.  Here are those four ways listed to leverage them:

  • Part of your branding
  • A customer bonus
  • A kick-start for a new business
  • Sponsorship of an event

There are many ways to leverage free samples to boost your business. You can probably think of more.

This article was originally posted here on Entrepreneur.com.

David Leonhardt runs THGM Writing Services, a freelance writing agency that helps clients write books, articles, blogs, press releases, screenplays and speeches. He has authored his own books and ghostwritten books for others. His background is in media relations and public affairs, before becoming an entrepreneur. He is a people-oriented writer, focusing on topics related to small business, personal finance, communications, lifestyle and healthy living.

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Marketing Tactics

Useful Marketing Tactics For Growing Businesses

Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.

Jandre de Beer

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Digital marketing offers the business world so many advantages, including the ability to communicate with their target markets quickly and easily. Unfortunately, digital marketing has also opened doors for companies to flood mail boxes, news feeds and ad spaces with junk mail and spam resulting in customers tuning out to anything irrelevant and suspicious.

Customers have become less likely to trust companies and less receptive to messages. The only way for valuable messaging to stand out from the noise is if a business knows how to market itself properly.

Over and above advertising, there are a lot of other aspects that contribute towards an effective marketing strategy, these include research, email, content creation, list curation, social media and even customer service. To be a successful marketer it isn’t necessary to become an expert in every single marketing tactic, but it is important to master the most important areas. Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.

1. Customer acquisition

Of course, not all customers are the same. Some customers are only interested in buying products on sale from a particular brand and then never interact with that brand again. Acquiring, and of course retaining customers with a high lifetime value should be the overall objective for businesses, but this requires more time and money being invested in better, more qualified leads. While the upfront costs might be higher, in the long-term this investment will pay off with continued business from these lifetime customers.

2. Customer experience

Competitive pricing can’t be the only aspect that businesses focus on in order to stand out against competitors. In the current digital era customers expect a good customer experience when they deal with brands so this should be an important focus area for all businesses. Customers expect fast and seamless experiences such as intuitive user interfaces and processes, fast websites and service response times, as well as accurate information about the problems they face.

Customers don’t want to waste their time on websites that require them to jump through hoops, and they definitely don’t want to feel misled by anything a business is communicating. Customers will quickly move on to other sites that offer better experiences as well as other businesses that are more trustworthy. Good customer experiences can go a long way.

Offering more personalised, interactive engagement tactics and improving the customer technology interface should be high priorities for businesses.

3. Content marketing

Marketing is no longer about telling customers that your brand is the best. With the movement towards content marketing, marketing has become about showing customers why you are the best. Content marketing is a legitimate, effective strategy that every business and brand should make use of. While content marketing is a lot more cost effective than outbound marketing, it also generates three times as many leads and offers many other benefits.

Content is a key feature for growing businesses who want to survive in an information rich environment. Customers are looking for brands that provide value beyond their products so creating high-quality content can help you grab your audience’s attention.

In conclusion

Although there are many other factors that are involved in an effective marketing strategy, seeking out customers with a high lifetime value, providing them with a great customer experience while also providing them with valuable content is a recipe for success.

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Marketing Tactics

An ‘Outside-the-Box’ Approach to the e-Commerce Unboxing Experience

Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.

Daniella Shapiro

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With a predicted 24,79 million e-commerce users in South Africa by 2021, online shopping is here to stay, making it impossible to escape the predicament of perfecting the art of product packaging. It’s time to think outside the box when it comes to creating a meaningful unboxing experience. Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.

Recyclable/Re-Usable Packaging

Certain types of product packaging are having a tremendous negative impact on our environment, with 5.35 trillion pieces of plastic debris littering the world’s oceans, and with 269,000 tonnes of this amount floating on the surface – and plastic isn’t the only culprit. Did you know that it’s impossible for Styrofoam to ever be broken down completely? And that 1 million single-use coffee cups wind up in landfill every single minute of every day? These statistics make it obvious as to why it’s becoming so important for business owners to be more conscious about the type of packaging that they use.

Many business owners wonder if their customers really care whether their business is doing its part to protect the environment. According to Forbes and a 2017 Cone Communications CSR Study, the answer is a resounding ‘YES, they most certainly do!’.

87% of the consumers surveyed stated that they always have a more positive image of a company that supports social or environmental issues, and 88% claimed that they usually feel more loyal toward a company that they know supports social or environmental issues.

Thoughtful Thank-You Notes

The unboxing experience should be a unique and personal one, and it should be just as memorable as the experience of utilising the product itself! So, make it all the more special and build customer loyalty by including a personalised thank you note. Address the customer by their first name, thank them sincerely for their patronage and end off by giving them some helpful advice regarding the product, or share an interesting benefit of using it. Go the extra, extra mile by hand-writing the letter too.

Free Samples

Everyone loves getting free stuff. Why not bolster the unboxing experience by sending over a little bit more than expected? Not only will a free sample put a big smile on the face of the receiver, if they actually enjoy using it, there’s also a good chance that they’ll be coming back to order more. According to Shopify, free samples have the potential to boost sales by as much as 2,000%.

When it comes to packaging, make the right choice. Sustainable, thoughtful, memorable. Your customers, and the environment, will thank you for it.

 

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Marketing Tactics

The Facebook Ads Strategy That Can’t Lose

It’s a numbers game.

Entrepreneur

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Running a profitable Facebook Ads campaign is simple. Not always easy, but simple.

There is a formula that can guarantee a profitable Facebook Ad campaign. Once you know the formula and the values to plug in, you’ll never sink money into a losing digital ad campaign again. I know it sounds too good to be true, but stick with me…

The Guaranteed Growth Formula

Here’s the entire formula: CPA < AP

Were you expecting coefficients, remainders and dividing by polynomials? Nope, there are only two values that matter when assessing your digital marketing funnel.

1. CPA – Cost Per Acquisition

2. AP – Average Profit Per Client

If your Cost Per Acquisition, the amount you pay to generate a paying customer using Facebook Ads, is less than the Average Profit you make from each new customer you’re guaranteed a profitable campaign.

Calculating Average Profit

To get average profit per client, sum your total revenue from new clients and subtract what you spent to serve them. Divide the result by the total new clients. For example, if you made $75,000 from 10 new clients over the past year and it cost you $40,000 to serve them, your average profit is:

 ($75,000 – $40,000) / 10 = $3500 Average Profit Per Client

If your average acquisition cost for similar future clients is less than $3500, your campaign will technically be profitable.

Of course most businesses won’t want to spend all of their profit on acquisition. An average business can expect to invest at least 7 percent but no more than 15 percent of revenue in sales and marketing. If Cost of Goods accounts for 60 percent or more of total revenue, your low profit margin may make it difficult to afford successful advertising. Decrease operating costs by increasing efficiency or adjust your margin by raising prices.

Don’t make the mistake of calculating Average Profit based on revenue only from the first sale. Use at least six months of revenue or your lifetime client value as the basis for your calculation, or you risk underfunding your marketing and sales budget.

Related: Here Is Why Your Facebook Ad Campaigns Aren’t Producing Results

Calculating Cost Per Acquisition

Let’s assume you’ve considered all of your marketing and sales costs and determined you can spend $350 per new client on Facebook Ads. Let’s reverse engineer your ad campaign to see if a $350 cost of acquisition is reasonable.

The simplest Facebook ads funnel includes four metrics that build upon each other to determine your acquisition cost. I’ve included standard benchmarks for use as a starting point, but your results may differ:

1. Click-Through Rate (CTR) – Percentage of people clicking on your ad. Your CTR should be near or above 1 percent.

2. Cost Per Click (CPC) – The cost of one website visit. CPC should generally be below $3.

3. Lead Conversion Rate – The percentage of site traffic that becomes qualified leads. This value should be 20 percent or above.

4. Sales Conversion Rate – The percentage of leads that convert to a sale. Aim for sales conversion at or above 5 percent. (E-commerce companies often skip the Lead Conversion stage and have a Sales Conversion Rate of 1 percent or greater.)

If 10,000 people view your ad at a 1 percent CTR, you’ll get about 100 website visits. At a $3 CPC, you’ve spent $300. Since 20 percent of your traffic will become leads and 5 percent of those leads become closed sales, we can calculate that you’ll generate approximately 60 leads and three new customers.

Your estimated acquisition cost using Facebook Ads is $100 per client, which is well within your budget of $350. This cost may rise as you scale and target less optimal prospects, but as long as your acquisition cost is less than $350 you’ll make an acceptable profit.

Complex funnels can include several ads and conversion points, but the Guaranteed Growth Formula of CPA < AP still applies. There’s no immediate reason for concern if your metrics differ from the benchmarks. You can and should split test ideas for improvement if your numbers are far from what you expect, but don’t mess up a good thing until you’ve got a better one.

Optimising Your Guaranteed Growth Funnel

If unhealthy metrics cause your acquisition to cost more than what you’ve budgeted, start with these adjustments:

Click-Through Rate Too Low or Cost Per Click Too High

If your CTR falls far under 1 percent Facebook may stop showing your ads or show them to second-rate audiences causing your traffic to tank and CPC to increase. To improve your click metrics, adjust your ad copy (headline and body text), ad creative (image or video) and highlight the benefits in your offer.

Refine your audience. Tailor your copy, images and call-to-action to the audience you’ve selected and ensure that your audience has the desire and means to act.

Lead Conversion Too Low

If leads aren’t converting at 20 percent or more, either the promise made by your ad isn’t congruent with your landing page, or the process of moving forward is too difficult. Try using the same image and headline in your ad and reduce the form fields in sign-up forms to the bare minimum. Also try retargeting visitors who don’t sign up with ads stating the benefits of acting now, or with a different offer.

Related: Staying Relevant In The Facebook Age Of Meaningful Social Interactions

Sales Conversion Too Low

If you’re an Ecommerce brand with sales conversion below 1 percent your shopping cart or sales process may have too much friction. Simplify the sales process to decrease clutter, or increase trust by adding testimonials and trust signals near important calls to action.

Your sales process may need improvement, but that is beyond this article. In the meantime, you can still increase revenue by cross-selling and upselling those who convert. You may also improve client retention with recurring contracts. Yes, that’s why many software companies are switching to cloud-based subscription models.

When used properly, The Guaranteed Growth Formula of CPA < AP makes Facebook Ad marketing an investment, not an expense. Using the formula, the most you should ever risk is a small initial budget to test whether your estimated calculations hold true in practice.

If your net profit is 3X your acquisition cost, your funnel returns $3 for every $1 you invest. Instead of asking “How much should I spend on marketing?” The question becomes, “How much do I want to make?” I’ve built a Facebook Ad Growth Calculator that incorporates the Guaranteed Growth Formula to help execute your growth strategy. Input your revenue goal and it will estimate the Facebook Ad impressions and traffic required to reach it.

This article was originally posted here on Entrepreneur.com.

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