Best Online Price: Free

What could be more appealing than getting something free by purchasing something you already planned to buy? That is the idea behind TrialPay, a Mountain View, Calif.-based company that unites online retailers into a network that provides freebies to consumers who purchase a partner company’s product.

Take the example of Fandango.com, the online movie ticket seller. Many consumers use the website to check movie times, but don’t purchase their tickets online. In order to make a sale, Fandango often offers customers a deal to get a free ticket if they make a purchase at a partner clothing store or sign up for a credit card, weight loss or dating service membership. Or, if a customer is making a $25 purchase at a clothing store, she can be told that she’ll get a free movie ticket if she spends $100.

The company that makes the sale pays TrialPay a commission for bringing it new business. TrialPay then uses a portion of that commission to pay for the free product, says CEO Alex Rampell. “We have to provide purchase incentives or a reason for customers to spend more.”

Many retailers have relied on free shipping to incent bigger purchases. But free shipping can be costly to give away, and it’s not always applicable. “Retailers need to differentiate themselves on the web,” Rampell says, “and the cost to give away free items may be quite small.”

TrialPay, which has had more than 15 million users, works with 7,500 merchants, from small companies to large national chains; the only requirement is that the retailers must sell their products online.

On average, retailers see sales increases of 15 to 20 percent directly attributable to TrialPay, Rampell, says, and some have as much as doubled their revenue by offering TrialPay incentives. Participating retailers also report an average reduction of 15 percent in cart abandonment rates, and TrialPay’s transactions are up 50 percent in the past four months as consumers continue to seek better and better deals.

Benefit by association
One retailer that has seen the benefits of participating in TrialPay is David’s Cookies, an online seller of bakery items. “We are a small company that gets free branding from this deal,” says director of e-commerce Dennis Consorte. “Even customers who are not shopping for cookies or gourmet gifts see our name when they go to other sites. We benefit from being associated with big-name companies.”

One TrialPay partner that a lot of Consorte’s customers visit is Skype.com, which offers VoIP phone service. There, they are told if they make a $40 purchase from a partner company, they can get a free upgrade from Skype. Those who click on the food and gift category of partners are referred to David’s Cookies.

“The branding value is exceptional,” Consorte says. “Skype customers are the same ones we are trying to acquire,” By co-branding with large non-competitive companies, David’s Cookies gets the attention of affluent shoppers. And once they’ve tried the product through a free incentive, they are often likely to come back, he says.