Businesses have been very successful with giveaways through the years. King Gillette, the founder of the Gillette safety razor, became a household name by giving away his razors to build demand for the blades. Today, some of the biggest names in business use giveaways.
Even Apple gives away its older but popular iPhone 4G in exchange for a contract with a carrier. Those folks at Apple aren’t dumb. They know they’ll make plenty of money from downloads at iTunes and at their app store.
Businesses have used giveaways to create a consumer stampede. But can giveaways create a donor stampede for lucky causes?
One business that has been giving it away and raising millions for causes is IHOP. Since 2006, IHOP has used National Pancake Day – February 5th – to give away a free short stack of buttermilk pancakes at its 1,500 restaurants. In return, IHOP asks customers to donate to the Children’s Miracle Network. Since inception, the program has raised ten million dollars. This year’s goal alone is three million dollars.
Giveaways give people powerful reasons to give. Feeling guilty is one of them. No one wants to look stingy after getting something for free. Some businesses aren’t even asking for money in return, just an action that will trigger a company donation.
Take the example of Neiman’s, a Philadelphia-based advertising agency that’s always experimenting with new technologies. They call it Neiman Labs. To find out if people would use their social media networks to talk about the company, Neiman combined cause and chocolate and called it Social Sweets.
Packed with chocolate candy bars, the Neiman team hit the streets of Philadelphia to give them away. In return for the sweet treat, they asked people to say thank you on Facebook and Twitter. When they did, Neiman donated a dollar to Philabundance, the region’s largest food bank.
Neiman produced a nice video explaining how the event worked and why they did it. In just two hours, Neiman gave away one thousand chocolate bars, which generated over 400 reactions on social networks. They gained some valuable insights into consumer behavior and donated $463 to the food bank. Good works. So do giveaways.
Remember, the giveaways of IHOP and Neiman are different from promotions that give donors something after they donate. For example, Cold Stone Creamery has rewarded customers who make a donation to Make-a-Wish with a free ice cream. Company giveaways are different in that there are no strings attached. IHOP customers can enjoy their free pancakes and leave. Chocolate lovers can accept the Neiman candy bar and keep walking.
The key to giveaways is to identify something that people want but isn’t too expensive to give away. I bet it costs IHOP a lot of money to give away all those pancakes. But compared to other items on their menu, pancakes are cheap – and guests love them! In turn, IHOP helps a great cause and gets a public relations boost from doing good and well.
Can you give away something expensive and raise money from it? Of course. Car dealerships across the country donate cars to nonprofits to auction or raffle off. But such donations are rarer during these tough economic times and even when they are given, the nonprofit has to take the wheel on raising the money.
Car and pancakes stacked next to each other, I say pass the syrup.