The Power of Generosity: How Giving Things Away Can Increase Business

Generosity is not only a virtue but can also help your business.

Costco is known for giving away free samples. You can’t walk down an aisle without running into a crowd gathered around a samples table. Why? Costco consistently sees higher sales of sampled products as members discover new favorites.

Dropbox grew from 100,000 users to 4 million in 15 months, simply by offering free storage space for referrals.

Software companies offering free trials of their products convert a significant percentage of those who use those programs into paying customers, once users see how valuable those programs are.

The point? You don’t lose by giving stuff away.

1. Generosity appeals to human nature

Imagine going to dinner with a friend who always insists on paying. How would you react? Most people get uncomfortable when we’re always on the receiving end. We want to return favors, and when a business offers something of value for free, it creates a subtle social contract. Grateful customers are more likely to make a purchase or recommend the business to others.

We know we resist buying when we feel manipulated or lied to, but we want to do business with those who are generous and who ask for nothing in return. Maybe that’s why so many people buy shoes from Tom’s Shoes. When the company began, they gave away a pair of shoes to a needy person for every pair purchased, and discovered that people like to feel generous, even when only purchasing a pair of shoes for themselves. Generosity works with human nature.

2. Generosity builds trust.

Trust is the foundation of every successful business relationship, and by giving something away, a business shows confidence, both in its product and in those with whom it shares the product. When we allow potential customers to experience our product firsthand, we address their doubts and reduce their risk. Trader Joes refunds purchases without a receipt and their trust in their customers has built a fanatical customer base and strong brand loyalty. When we trust others, they tend to trust us.

3. Generosity Increases Our Reputation Through Word-of-Mouth

When you give something extraordinary away, people talk about it. We know that word-of-mouth is the most effective marketing tool, and generosity gets people talking. Even those who don’t buy will tell others about their experience, and we gain increased credibility with a wider audience.

4. Generosity Opens the Gate from Free to Paid

Seth Godin models generosity. For years, he has offered free daily blog posts, free eBooks, and open-source ideas. He gives generously without pitching, letting trust and curiosity lead people to his workshops, like The AltMBA, creating a leadership brand that commands attention without hard selling. Michael Hyatt, Marie Forleo and Donald Miller have also built their consulting business by giving away tools and teaching that others charge for and then offering premium coaching programs for pay.

5. Generosity Gives Us a Way to Collect Feedback

When we give things away, we open a channel for feedback and users’ opinions and gain valuable knowledge in how to modify what we offer to better meet the needs of our target audience.

How We Implement Generosity at Westech

Many business owners consider coaching a luxury they can’t afford and probably don’t need. This is why Westech Business Solutions offers free, monthly Value-Added Seminars, sharing valuable tips, insights and principles that work in every business. If you hear something you can use, we may be able to help you with the practical implementation of this information.

Our next Value-Added Seminar will be at noon on August 21 on Zoom. For more information, email us at Bob@Westechbusiness.com