When Is It OK to Give Away Your Product?

Denny's Grand Slam Breakfast giveaway featured in Super Bowl commercials attracted about 2 million visitors to restaurants across the country. The costs of the promotion include production of commercials, buying air time during the Super Bowl, and of course, the food that was given away. The total costs of such a promotion raise the logical question "Is it worth it?" The answer is "maybe."

Product giveaway promotions are a good tactic in some cases. Conditions under which this type of promotion is most likely to be effective include:

1. Little brand awareness exists - Sampling is a great way to let a consumer try a product risk-free. If the product is deemed to possess value, consumers may buy it. If not, at least you succeeded in achieving product trial.

2. Entice customers to return to the brand - Customers who have bought previously but for some reason have not made a purchase for a certain period of time may still be good prospects. An offer of a free item may rekindle interest in your brand.

3. The door is opened for future marketing opportunities - Despite all of the hype about Denny's free breakfast promotion, an even better promotion it is running is a free meal offer (burger and fries) for people who join Denny's rewards program. More than 300,000 people have taken advantage of the offer already, with a goal of 500,000 by mid-February. Adding this many people to a customer database creates marketing opportunities throughout the year to people who have some level of interest with the brand.

Product giveaway promotions can be costly, and if there are not strategic reasons for such a promotion (e.g., increased brand awareness, greater brand consideration, more customers in database, higher sales) it could be an expensive mistake. If planned with an eye toward future marketing efforts with the target audience, product giveaways can be the inspiration for strengthening relationships with customers.

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