When you start a relationship with a networking contact or prospective customers, one of the best tactics is an offer for a free gift.

I’ve noticed that there were some questions about what makes a good gift and some common misconceptions.

I do a lot of “list building” promotions and we use gifts for readers that want to get a newsletter and more information. The “gifts” have to be easy for many people to get and it’s common to make that a simple e-book or Mp3. We call them gifts because they are free, and very little obligation (you can unsubcribe).

A real gift of value can position you as a provider of value in business (or life). Dr. Robert Cialdini refers to this as the Law of Reciprocity. A gift given without an expectation of quid pro quo seems altruistic and might look like it’s less likely to sell, but studies show that the life time value of customers who get a gift early one is almost always higher than something that looks like you are buying an opportunity to pitch them

Here are some tips to increase the value of using online gifts?

  1. Make it a real gift If you send everyone to the same page with an free report signup and then offer that as a “special gift” on another promotion it’s not special
  2. Don’t make people sign up for your mailing list. We use this this option on a regular basis “free gift plus newsletter” but don’t assume that the recipient is giving you permission to mail any ad you wish. The more limited and targeted you use email, the more value it can have for your readers.
  3. Give away something that others are paying for. That shows it has real value right now
  4. Make it a wide appeal. No need to give your lead generating gift when it’s publicity for you, your site and your business.

These guidelines for for contests, charity gifts etc. There are plenty of times when a “free download” gift is perfectly right.. on your sites landing page or in as a bonus for someone buying at a partners site. That’s what we call a “lead generation” marketing program.

I ask myself this question when choosing a gift: “Would I think this was a good value if I wasn’t doing this for a living”

We gave away thousands of copies of Twitter Handbook before releasing Twitter Revolution: How Social Media and Mobile Marketing is Changing the Way We Do Business & Market Online. If you’ve seen the ebook, it’s got almost as much information as the real book and tons of value. We knew that the people like you that download it are early adopters and the kind of people we want in our network.

The law of reciprocity says that when you give a real gift, without demanding quid pro quo, you create a bond with the recipient. In marketing, we know that some of the people will come back and that the publicity value will outweigh the small investment in the gift.

Ultimately, giving away real value in gifts gets you the best results. Free can be more valuable that charging.

Pretty cool, eh?