A few years ago, KLM - Royal Dutch Airlines had a promotion where they were sending out personalized luggage tags - free of charge, no purchase necessary, no catch. (They were really nice tags too; my dad took mine a few years ago, crossed out my information and wrote his on it in Sharpie...but I digress.) So obviously this was a sizeable financial investment on KLM's part, sending out thousands of personalized tags, printing them, shipping them, etc. And on the surface, it may seem like money poured into an abyss without an immediately tangible ROI.
I believe at the time KLM had been undertaking a re-branding endeavor and really trying to get their name out there. I remember debating whether to order a set of tags at the time, never having heard of this airline and being all suspicious about providing personal information on the internet and whatnot. But I did, as did thousands of others.
A few years after that, last summer, when it came time to book my flights to Europe, I remembered that airline that had impressed me with decent quality luggage tags (brand familiarity), and eventually went on to book 5 flight segments through them (although two of those segments were actually flown on Delta Air Lines, whom they've partnered with). Was my actual flying experience with KLM a positive one? Yes. Would I fly with them again in the future? Most definitely.
Let's step back for a moment, crunch some hypothetical numbers. Since the tags are being printed as bulk orders, let's price the cost at say, $5 per order. Add on $5 for shipping. So say these "gifts" cost the company $10 a pop. For each converted customer who ends up booking a trans-continental flight in coach, that's $1,000 to $2,000 a go. Business/First class may stretch up to $5,000. So now you've got the customer for the first go round. If you're investing this much in customer conversion, then presumably you have faith that you're offering a decent product and expecting customer loyalty. Even if only a small portion of those who were presented with the promotional gift became customers, the campaign more than pays for itself.
Right now, KLM is running another awesome campaign, one which will probably interest all you travelers out there. They're offering Must See Maps - again, completely free of charge - where you pick a city, have some friends plot some recommendations on the digital map, and then they mail you a physical copy. Apparently shipping takes about 3 weeks, so it would have to be a pre-planned trip.
