Of free trials and conversions
The biggest advantage of free trials is new customer acquisition
On 25 and 26 March, women’s denim brand Jealous 21 offered free jeans to its customers in Delhi, Mumbai, Bengaluru and Chennai. To avail the free jeans offer, women who registered on the company’s website got a unique code to visit its store. The process involved uploading a selfie in a Jealous 21 garment and tagging @jealous21 and #freejeansday on Instagram or Facebook to walk away with a free pair of jeans.
The brand claimed it offered a stress-free experience to the participants without any hidden terms and conditions. It said that 30,000 people registered for participation and it distributed 5,000 free jeans.
It was indeed a unique trial-driven marketing experiment in the apparel category. To be sure, trial-driven marketing is just a sampler—it involves offering a free trial to prospective customers. Here, the assumption is that once the customers experience what you have to offer, prospective buyers will be ready to make a lifetime commitment to your product. “A consumer is more likely to buy a product after trying it. Typically, food products have tried sampling stations while cars invite you to go on a test drive,” says Alpana Parida, managing director at brand strategy firm DY Works.
American coffee chain Starbucks, for instance, is known to have run a very successful free coffee offer where the brand saw long queues outside its outlets. According to innovation and brand consultant Anisha Motwani, who is also the managing partner at StormTheNorm Ventures, sampling is mostly prevalent in categories that have frequency of consumption and probability of repeat purchases.
It is also prevalent in categories that have deep-seated habits and consumption patterns and hence require attitude and behaviour changes. Such categories could include newspapers, food products etc. Free trials can also be found in case of expensive offerings where consumers prefer sampling before committing.
Interestingly, jeans, or for that matter any apparel, is not a category that easily fits into any of the above. “One does not buy a pair of jeans very frequently and the next purchase from the prospects that have tried through the free offer could be months/years away. I guess, a positive word of mouth leading to referrals is what the brand was seeking through this unique offer,” says Motwani.
Parida agrees that jeans is an unusual category to get people to try. Unlike other sampling strategies—where a consumer is likely to buy a pack of biscuits or a chocolate—it is unlikely that the same person will buy another pair of jeans. “The real impact of this is the viralization of such an activity. The brand is earning this buzz—rather than paying for advertising—and is being talked about,” she says.
However, trial marketing is also extremely relevant in some service industry categories. Jio is a good example and an enviable success story of trial marketing in a crowded and competitive category such as telecom. The promotional offer by Reliance Industries Ltd’s telecom subsidiary Reliance Jio Infocomm Ltd for free sampling of Jio’s voice calling, text messaging and data services was hugely successful and got the company 100 million subscribers. In such free trial offers, the churn is usually 60 to 70%. But at the end of the free trial, when Jio asked customers to pay and enrol for its services, it managed to get 72 million subscribers—a number which was much higher than the 50 million customers that analysts expected it to retain.
Raj Bhatia, vice-president of Global Loyalty Solutions, India, says that Jio is an excellent example of a free product offer. No brand could hope to have a better start although it used high decibel advertising to pull customers. However, advertising by itself couldn’t have managed to get it 100 million customers within three months. “Obviously, a lot of math goes behind an offer like this because it may take months for the brand/store to recover the investment. The scheme can backfire if the product doesn’t live up to consumer expectations, leaving the brand bankrupt. So it requires deep pockets or a lot of confidence in your product, or both,” he says.
Parida feels the Jio offer was too good to refuse. “For most people, data is an expensive luxury. Jio enabled trials from a large number of people who, once they get hooked on to data, are likely to come back for more—this time even paying for it,” she says. However, for a free trial to work, the brand must be cautious. The experience must be world-class. It works as long as the value being offered is far higher than the effort of getting it. For instance, while free coffee at Starbucks worked brilliantly, it couldn’t attract customers who lived far away.
Clearly, the biggest advantage of free trials is new customer acquisition. A trial greatly increases the base of potential customers and is a win-win for both customers and companies “provided it is part of an overall strategy and not an end in itself,” points out Motwani, adding that a great product sells itself and creates an organic momentum once the trial period is over.
However, for a brand, both advertising and free trial are important. Conventional wisdom suggests that brands that indulge in trials and discount programmes are actually eroding brand value. “Here’s the reality though. People value brands. But people also seek value for money. They prefer to buy brands, especially when they are offered at the best price or that have been experienced first-hand and generated a positive word of mouth,” Motwani says.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.