How a $14 Gift Increased Sales by 669%

By Glen Stansberry on 25 July 2010 (Updated 5 January 2011) 0 comments
Photo: Kutay Tanir

Companies and PR agencies will never stop trying to figure out how to get positive buzz. After all, the success of a product is built around good reviews and getting eyeballs. Companies spend sickening amounts of money on viral campaigns or social media blitzes to try and drum up publicity, and many times they fail.

Yet there are other, more "guerrilla" tactics that can be used to get massive publicity on the web. But they require something that most major companies grossly overlook: giving. This is a story of a tiny company that did a good deed, and that deed alone generated a massive growth in sales literally overnight.

The Story of Mizage

A few weeks ago, Mizage was another small, relatively obscure software company with one product trying to drum up sales. They had built some moderate success for their flagship software Divvy, a window management tool for the Mac. A prospective customer had emailed the Mizage team, asking if he could buy the software for $5 instead of the original price of $14.

The Mizage sales team replied with this message:

"I'll do you one better, I just sent a free license. As repayment, here are some ideas you might consider: 1) Tell 5 friends about Divvy 2) Post a review on MacUpdate or VersionTracker 3) Do a blog post and tweet about it on Twitter Whatever you feel inclined to do, we would appreciate it."

Mizage's generosity inspired the new client to submit the email thread to Reddit, and the story landed on the front page of the popular social news site, sending tens of thousands of pageviews and links to the Divvy site (Reddit gets eight million unique visitors a month). That's how a $14 gift turned into the number one story on Reddit and loads of great PR.

But wait, there's more.

A week after the post hit the Reddit homepage, a Mizage employee posted a thread on Reddit chronicling the effects on Divvy sales after landing on the homepage.

The four days leading up to the Reddit homepage, Divvy's sales looked like this:

  • June 25 - 6
  • June 26 - 6
  • June 27 - 8
  • June 28 (The day before the post) - 9

Given that Divvy sells for $25 a pop, that was a net of $725. Once the post hit the frontpage of Reddit, the sales looked like this:

  • June 29 - 48
  • June 30 - 110
  • July 1 - 33
  • July 2 - 32

Those 223 sales netted $5,575, which means that the Reddit homepage increased Divvy sales by 669%. Any company would kill for that kind of PR and sales increase. I would imagine that while sales of Divvy might not be as high as the days around the Reddit homepage exposure, they're still much higher than before.

What Can Companies Learn From This?

There are a few key takeaways from the Mizage story that any business can learn from.

1. Stories drive sales.

Having a story is a great way to attach an emotional element to the product. Stories draw people in a much more personal and intense way than listing features. That's why people love to read testimonials about a product: they're reading real-life stories. Reddit readers are incredibly tech savvy, and many of them prefer using open source or self-developed software. The fact that Divvy sales shot so high with Reddit readers means that there was something else driving sales. It was the story that drove the email exchange to the front page of Reddit, and it was also the story that drove the sales.

2. Giving turns heads.

Too often we hear of tight-fisted corporations that trample the little guy. It's a refreshing change to hear of a company giving their product away without expecting anything in return. Mizage's email only suggested a few ways to give back, but it wasn't pushy or demanding. Had the email demanded something in return, it would no longer have been considered a gift. What would happen if your business gave something away, without asking for anything in return?

3. Don't forget to follow up.

Mizage followed up the $14 PR triumph with another one: they offered all Reddit users a 30% off coupon.  More importantly, Mizage employees visited Reddit and engaged Reddit users in a conversation thread that had over 400 comments.

"Your marketing is awesome," said Reddit user Rich97 to Mizage employees.  "Actually reaching out on a personal level to your potential customers, your dedication to replying to the hundreds of Reddit comments is proof of this. I wish there were more companies about like Mizage."

4. You still need a killer product.

All the Reddit frontpages in the world won't do any good if your product isn't already fantastic. You have to deliver to back up the promotional efforts. Divvy was already a great product before they made the Reddit homepage, so all they needed was more people looking at their product to increase their sales.

Giving is a powerful thing that businesses need to understand. The Internet has created a platform for customers to complain and share stories, and gone are the days when bad PR can easily be covered up. Giving can go a long way to change hearts and drive sales. Odds are the more you give, the more you'll get back.

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