Work   The reason free giveaways work so well is two-fold. First, prospects that test your product or service risk-free will hopefully recognize its value and continue purchasing what you offer. Or even better, your prospect will get "hooked" on your product or service and wont be able to live without it.   Second, the fact that your product or service was given to your prospects as a free gift will compel them to return the favor by continuing to purchase from you. This principle is called the "Law of Reciprocity". Simply stated, people naturally feel an obligation to return favors as a way of expressing their thanks.   The Law of Reciprocity works! The Hare Krishnas raised millions of dollars in the late sixties and early seventies using this principle. In airports the Krishnas would give away small wooden umbrellas as a free gift and would in turn, ask for a donation.   After the donor would give their donation, they would toss the little umbrella into the first trashcan they passed. The Krishna would then pick the umbrella out of the trashcan and turn right around and give it to the next person. It worked like a charm.   Know Your Total Customer Value Before Giving Freebies   The key to safely offering free giveaways is to know your "total customer value." This is the amount of profit you will receive from your customer over the total length of your relationship. This figure not only includes business that you will receive from your customer, but also any referrals you may receive from them.   For instance, suppose you own a dry cleaning business and you compute your average "total customer value" to be $1,250. How much money would you be willing to invest in free giveaways to acquire a new customer? $50? $100? $200?   The answer is * yes * to all of the above. Why wouldnt you invest $100 to gain $1,250 in profits? Coincidentally, this is why most small business owners are nervous about offering free giveaways. They dont understand the principle of "total customer value."   Information - The Ultimate Free Giveaway   Ideally, its best to offer free giveaways that are low-cost but that have a high perceived value to the person you are giving them to. Information is a great example of a free giveaway that has a low product cost and a high perceived value. This is why its smart for small businesses to use special reports containing "insider" information as free giveaways for new customer lead generation.   Your special report could be a written document, an audiocassette, or a video containing