As small business owners, we often struggle to find new ways to market our businesses and grow our customer bases. We're caught between a rock and a hard place - the time and expense involved in traditional advertising, and the limited marketing budgets we have to work with.

I would like to showcase an extremely powerful and practically free marketing tool that we all have at our disposal. This tool is nothing new, the concept has been around for years, and because of that, it is often overlooked. I'm sure you've heard of it, and you might even be using it in one form or another. But I'm willing to bet that you're not using it 100% effectively.

This concept is so potent it is guaranteed to increase your business almost instantly - if you use it correctly.

So do yourself a favor and really read everything I have to say. Don't just skim the subheads and think, "Yeah, I already know that." Or you'll miss out on learning the distinctive nuances that make this concept actually work.

Give It Away Free!

Now I already know what you're thinking: "I'll lose money if I give it away for free." You're going to have to trust me on this and believe that this is actually an excellent business building strategy.

There are two main reasons this tactic works so well (there are actually many reasons, but we're going to discuss the two biggies here).

1. Free give-aways allow your prospects to "test drive" your product or service without any fear or risk. When they recognize the superior value you offer, they'll become addicted and want to purchase over and over again. Of course, we're assuming that you actually doffer superior value - and let me point out that superior value does not mean lowest price. But that's another discussion altogether.

2. The law of reciprocity kicks in. When you give away something for free, people feel naturally compelled to return the favor. Just think about the veterans groups and their red poppies. They raise millions of dollars by giving away a tissue paper poppy worth a few pennies.

So, what kind of things can you give away for free? You want to give something that is low cost but has a high perceived value.

Information makes a wonderful freebie. It's relatively inexpensive to package and it does have a very high perceived value, as long as the information addresses your target market's needs. Your information can be compiled into a special report; it can be assembled into an audio file; it can even be turned into an autoresponder email course.

The key is to give information that showcases you as the expert in your field. For instance, a real estate agent can give away a special report entitled How To Increase The Curb Appeal Of Your Home And Have Offers Flooding In Like Crazy. A used car dealer can create an audio CD called Pucker Up - 8 Tell-Tale Signs That The Car You're Test Driving Is A Lemon.

You can also give away product samples or service consultations. Have you ever gone to the grocery store during the weekend? You can hardly step into an aisle without having a cracker shoved in your face - topped with the newest flavor dip to hit the market. Or being enticed by bite sized pastries still steaming from the oven. Grocery stores have been using the free sample tactic for years - because it works!

It's easy to see how this idea works for products, but it pulls just as well, maybe even better, for service providers. If you offer a service, you can give a free sample that leaves your prospect not only wanting more, but needing more. Ever see the subway shoeshine vendors? The most profitable ones offer a free shoeshine, but it's only one shoe. You're left with the choice of either buying another shine or walking around with lopsided feet.

How Much Can You Afford To Give Away?

Before you plan your free give-away strategy, it's imperative that you figure out the lifetime value of your customer. This is relatively easy to do, and it's a statistic that will drive many of your future business decisions, but unfortunately, this is a step that not many entrepreneurs take.

Let's say you own a quick oil change center. Your typical customer comes in four times a year. He spends $29.95 on each oil change (4 per year). Once a year he buys a pair of wiper blades at $19.99 and once a year he gets a coolant flush at $69.99. We'll say each oil change costs you $10, parts and labor; the wiper blades cost $8 and the coolant flush $15.

Your typical customer also brings in his wife's car four times a year and his daughter's car four times a year. He does business with you for five years.

The lifetime value of your customer is $2,201.70. How much are you willing to invest to get a new customer who will net you $2,201.70? What do you need to cover your overhead? How many referrals do you typically get from each customer? Does it make sense for you to give away a $29.95 oil change? How about a $69.99 coolant flush? What are you prepared to spend in order to acquire a new customer? Keep this "magic number" in mind when you're preparing your freebie.