In this day and age where the economy has imploded and consumers are expecting more and more and more (let’s face it – it’s a buyer’s market in all facets) your brand had better think long and hard about getting on the free gift train.  Once you leave the station there is NO coming back.

Back in the day, I had a job where I managed the gift with purchase business of a large cosmetics company.  The GWP business (as it is called) accounted for 40% of the business – no laughing matter.  Each season we had to top ourselves – lower the spend, get better sourcing to reduce costs and above all make the offers something that the customers could not resist.  If what we created wasn’t good enough to spur on the sales needed, or the customers resisted, sales went down and we poured even more into making the next GWP a better proposition.  Low and behold, little by little, 40% of this company’s sales were spurred on by free gifts.  Almost HALF of their income was now hooked into spending big money to make money.
 
While these gift programs certainly drove the business forward (most of the time), in my opinion, it also devalued the brand a little bit with every GWP.
 
See, once you “go gift” the customer perceives that your product/brand needs help in order to sell itself.  You immediately put yourself in a bargaining position, one where the client knows they can get more out of you.  The brand can no longer stand on its own merits – it needs props to help it stand up.  We then train the customer to “shop gift” where they will wait to buy their products just so they can get the gift which in turn cannibalizes from your non-gift sales.  What was once a luxury product suddenly feels like a used car lot – it all just feels cheap.
 
So, the moral of the story is – find other ways to give back to your customers before going gift.  Over deliver on your products, your service and your mission.  Perhaps then you will come out of this weird economic time standing strong.

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