Why Do Companies Give Away Free Stuff?

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In our last article we answered the question, “What exactly is ‘free stuff’“?. Now that we’ve explained what free stuff is, it’s time to tackle another common question: “Why do companies give away free stuff”?

Companies give away free stuff for many different reasons. In many cases its part of their marketing strategy and a way to find new customers.

For example, let’s look at why a company would give away free product samples, which is one of the most popular type of free offer around. If a company releases a new type of gum they need to find people who chew gum to buy their product. The traditional way of selling this new product is to spend money advertising on TV or in newspapers and magazines. However, another way a company can get new customers is to give them a free sample of their product with the hope that the customer will like the sample and decide to buy more in the future. Either way, the company is spending money to promote their product. The only difference with free samples is that the benefit of what the company pays goes directly to their customers instead of to an advertising agency.

A similar strategy is used with other popular freebies, such as software trials, music files and magazine subscriptions. These types of things are given away for free because the company believes you’ll like what you get and become a paying customer in the future. While this might not always happen, the company knows a certain amount of people will.

Other types of freebies are given away to build an audience the company can show ads to in some form or another. Free email accounts, humor sites, and webmaster resources fall into this category. Companies know people are willing to put up with some level of advertisements if they give away a service or information for free. This business model can be very successful when the company offers something of high value for free and finds a balance with enough ads to make money but not too many that it scares users like you away. When this model works its a win-win for both the company and the customer.

Although it’s good to understand what benefit a company gets from giving away free stuff, there are some cases where freebies are given away just as a kind gesture. For example, there are tons of graphic designers, font authors, and photographers who are happy to share their work with others for free out of the goodness of their heart. You’ll commonly see these type of freebies released under a creative commons license.

As you can see, there are lots of reasons why companies give away free stuff. The reasons above are just a small example of some of these reasons, but they should give you a good idea of how giving away freebies can create a situation that benefits both you and the company. When you’re hunting for free stuff it’s always a good idea to ask “why”, and hopefully the information in this article will help you answer this question from now on.

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