Free Customer Offers: Why It’s Better To Offer Lower Amounts With Fewer Conditions
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With each passing day, almost any industry you can name gets more competitive (at least at the level of small businesses). The development of the internet — and the pressing need to stop operating through brick-and-mortar offices and stores — has led to most operations migrating to the online world where you can’t really rely on having a good location to earn sales.
Consider that online shoppers have so many choices, and they’re all incredibly accessible. If you can’t find what you’re looking for, you can pick a new search result in seconds, which means you can afford to be extremely picky. That piles pressure on businesses to do more to impress their prospective customers — to find ways to win them over.
This is where free customer offers enter the picture. Offering something for free is one of the oldest and most reliable ways to curry favor with someone, whether you’re trying to get them to try your service or attempting to give a long-standing customer a reason to stay.
But what approach should you take? Well, there are two common options: going for eye-catching offers held back with expansive terms and conditions, or keeping things simpler and easier. They’re both viable, but it’s almost always better to opt for the latter. Here’s why:
You’ll seem more trustworthy if you keep things simple
Trust is an essential component of bringing in customers, particularly when you’re running a business that falls into the category of YMYL (your money or your life, meaning a company that has the potential to hurt its customers’ health or financial security). Even as you take action to incentivize conversions, you must be careful to avoid seeming cynical and exploitative.
Imagine if you were running a new online casino and hoping to attract players. You’d need to whip up some notable welcome bonuses to give people reasons to choose your site over others of a similar nature (players do actually research benefits before they play), but you’d also want to convince them that your company could be trusted in the long run (not just in the beginning).
Now imagine if you rolled out some hyper-complicated set of incentives that sounded fantastic but didn’t actually amount to much in most cases. Even if it worked to get people to sign up, it wouldn’t work to keep them signed up. Once they noticed your efforts to confuse them with arcane conditions, they’d most likely opt to go elsewhere with more comprehensible rules.
People will find (and publicize) ways to exploit your conditions
Another reason why you shouldn’t offer huge bonuses limited by complex conditions is that people will figure out ways to unpack those conditions and exploit them to their advantage — and not just to whatever extent you’d like them to. Every time you create an offer, there will be a solid chance that someone will find a loophole you didn’t consider, and use it to profit hugely.
That in itself would be bad enough, but word spreads quickly on the internet. Once a few people have noticed a loophole, one of them is all but certain to mention it to others, leading to a huge influx of people who only want to sign up because they think they can get something for nothing.
At that point, you’ll have two options: remove the deal and send people away, ruining your promotional efforts and making your company look terrible, or honor the deal and end up losing a significant amount of money (through a deal you’ll never want to repeat, no less, setting you up to be rejected down the line by the customers you won with your unintended generosity).
It simply takes less effort to plan your offers
Lastly, we get to the easiest reason why it’s better to offer lower amounts with fewer conditions: it takes less effort to come up with the offers. When you decide to go with 50% off, you need to crunch the numbers and devise specific restrictions to minimize the likelihood that the offer will end up sabotaging your profitability. When you opt for just 10% off with no notable terms, you don’t need to do any additional work (at most, you just need a sensible cut-off point).
By sticking to simple offers, you can save a lot of time and effort that would otherwise have been needed for the promotional process, and put those resources towards other things that need them more (things like improving your customer service or tweaking your website).
In the end, offering small offers with minimal conditions is generally more effective, safer, and easier than the alternative. There’s really no compelling reason to do otherwise.