Why Do Companies Give Away Free Samples?

We have all heard the expression that there is no such thing as a free lunch. Yet, many large and small companies give away millions of dollars worth of freebies every year. This begs the question, why do they do it?

There are a few reasons why companies choose to give away free samples or trials of their products but they all turn out to uphold the old saying: there really is no such thing as a (totally) free lunch. The very simple answer is that companies give away free samples to increase their sales and (hopefully) in turn profits.

Now you may wonder how giving away something for free can increase sales, let alone profits. Obviously, in the short run these types of promotions negatively affect the bottom line of most companies that employ them. However, the hope is that in the long run the free sample or free trial offer will get people to pay to use the product.

These promotions are most commonly used to promote a brand new product or service that people have never tried before. The classic example is cigarettes, which were often given away in the United States to get people to switch to smoking them instead of using other forms of tobacco. This is probably the most successful example of this type of promotion (especially given the addictive nature of the product) but there are literally thousand of examples of this type of promotion used successfully over the years.

You have probably seen and tried many of promotions before. Think of the last time you were at the grocery store of how many free food and drink samples were offered to you. Another example are magazine subscription offers that will give you a free 4-week trial to their magazine. The goal in all these cases is to get you to start using and paying for their product on a regular basis.

A second reason why companies give away free samples, which is very similar to the first, is to get you to switch from one brand of a product to another. For example Pepsi may give out free samples to try to get you to switch from drinking Coke to their product. The goal here is not only to increase sales of Pepsi or any other product but also to hurt sales of a rival product as well. Again, these types of promotions are also very common.

Finally, there is a third and more sinister reason why companies may offer free trials or samples of product or services. Often third parties will offer a chance to win or get something for free to capture marketing information about you. They will then sell the information to interested markets so they can send you unsolicited offers.

These types of offers are especially common on the internet so be aware of them. You can usually spot this offers because they are often too good to be true. If you really think someone is going to give you an iPod just for entering your zip code or e-mail address you deserve to get the resulting marketing solicitations.

Thus, as you can see there a few reasons why companies give away free samples of their products. The overriding one, of course, is to make more money for themselves in the long run. Also, you should be somewhat skeptical about some of these offers, especially if they seem a little too good. However, the vast majority are legitimate marketing promotions. And while there is no such thing as a free lunch, you can get a free snack or two from your local grocery store courtesy of companies free food samples. Who knows maybe you will find something you really like.