Analyzing the Effectiveness of Giveaways in E-Commerce

Posted on December 27, 2018

The future of e-commerce is very much about brands building toward that all-important customer lifetime value. That’s how long-term success is going to be achieved in this age of stiff competition from the retail giants who can spend immensely as a strategy to win. That’s likely not a strategy your business can afford to deploy. But if you can afford to just give a little to your consumers, you can potentially make a major difference.

According to a recent study from Dotcom Distribution, 60 percent of Millennials say they would recommend a brand to others because they received a free giveaway. Even if it’s just a sticker or magnet included with purchase, that’s enough for young consumers to be incentivized to become repeat buyers.

We recently asked a few businesses to provide us with feedback on which giveaways work best for their brand. Here’s what they had to say:

Carissa Flinders, is an e-commerce boutique that has used giveaways as a very important piece to its success. Carissa Flinders coordinates the once-a-week (and sometimes twice) giveaways the site conducts. Here’s what she had to say about their giveaway strategy:

We are definitely strategic in choosing timing and partners for giveaways. We typically try to align our giveaways with other marketing campaigns running on the site during that time. For example, we do a yearly “Kick Off to Summer” giveaway which is timed with our summer launch on site.

As far as choosing a partner goes, we now have enough data to get a feel for what types of prizing, partners, and products will work for our customers. In choosing a partner, I always try to find brands who align well and have a similar audience. I have found that in vetting prospective partners, it is helpful to hop on a call and get a feel for their target demo and what they respond well to. If our audiences align, we’ve got a good match. I have also used third-party tools such as SocialRank to see which brands our audience is following and what partners may be of interest to them.

One thing that doesn’t work well with our audience is requiring too much effort. After all, they’re trying to get something for free! We tried a photo submission contest via hashtag, and we received very few entries.

We’ve also found that this was the case with our annual Easter Egg Hunt giveaway. We hide eggs throughout our site with answers corresponding to a numbered question on the Gleam widget. When you enter the answer, you receive the points. Originally, we did not provide direct links to the answers. We left it up to our users to find them on their own, and we were not seeing very many entries. Then we essentially just linked directly to the answers and we saw many more successful entries. It is actually one of our best performing giveaways. I think that’s due to the fact that it is timely, fun, and not too difficult for participants to enter.

We have also found “refer a friend” competitions to be really successful. We use giveaways for new user acquisition, and we tend to see a really high number of new-to-file email rates whenever we do one of these competitions.

Tom Davidson, Nisim

Nisim has been in business for more than 25 years, anchoring its appeal to consumers on a guarantee its hair products will be as advertised. But that’s just one element of Nisim’s customer-first strategy, and giveaways are another. Here’s what CEO Tom Davidson had to say about the power of giving: 

We encouraged customers to share their “good hair day” photos for a chance to win a prize package of our newest biofactors shampoos and conditioners. Customers can share photos via Facebook, Twitter, or Instagram, and tag our business pages.

Not only did we get results from retweeting and re-sharing their images, but it was also a way for others to see the results our loyal customers got from our hair products. That helped us drive more organic sales from their friends and families that follow them on that social media platform.

This promotion ran for one week in the summertime. During that week, we saw the highest social media engagement rates we had seen all year. We also exceeded our sales goal for the month by 17 percent.

With this giveaway, we were able to show our audience and our customers’ audience that they can always expect great results from our shampoos, conditioners, and other treatments.

Ray Li, CEO at Sene

Sene offers entire wardrobes for men and women centered around exclusively using custom sizing. Founded by CEO Ray Li in early 2017, Sene has already been featured by GQ, the Los Angeles Times, Women’s Wear Daily, Men’s Health, and others. Here’s what Ray had to say about how Sene is utilizing giveaways:

Our most effective giveaway was bridging the digital giveaway experience with in-store activation. The classic problem is the drop-off after giveaways, so we felt like we needed to first crystallize what Sene is in a dramatic way, as well as create immediate value.

We ran a giveaway that included a flight to Los Angeles. Then we invited everyone from the giveaway that was in LA to come to a really cool event at the store where we partnered with a barber, Hendrick’s Gin, and a skincare brand that was giving away product.