Does this sound familiar?
- You use a keychain that has the name of a business
- You wear a tee shirt that advertises a business or some organization
- You go to a convention and collect a bunch of stuff from the vendors
- You buy a product because it is sold as “Buy one, get one free” even though you don’t need the free one
How about this? What is the common idea here?
- If you are one of the first 500 callers, you will also receive…..
- And in our deluxe package, you get unlimited….
- And that’s our gift to you if you call now…..
- Unlimited cable, internet, and telephone for one low price….
It throws our decision-making ability out the window.
It makes us greedy.
It’s the word FREE!
And not just FREE! ABSOLUTELY FREE!
Let me ask you…how many gifts have you received that you PAID for? None? If so, then why do marketers call it a FREE gift? Because there is something about that word FREE that just makes us lose all ability to reason properly.
I have been reading Predictably Irrational for the past week, and I am absolutely FASCINATED by what the author, Dan Ariely, has to say. His basic premise is that we as humans make some very irrational decisions and can behave very irrationally, and that sometimes it is very predictable.
One experiment he talks about was when he set up a table with a PhD student and a university professor at a large public building and offered 2 types of chocolates – Lindt truffles and Hershey’s Kisses. They sold the truffles at $.15 a piece and the Kisses at $.01 a piece with a limit of 1 per person. The Lindt truffles, from the way he describes it, are quite an excellent little chocolate. The customers did not see the offerings and prices until they approached the table. What they found was that 73 percent of the customers bought the $.15 truffle and 27 percent bought the $.01 Kiss. On another day, they lowered each item by $.01. The truffle became $.14 and the Kiss became FREE! Did they have the same results? Nope! Now the FREE! item was given out 69 percent of the time while only 31 percent paid the $.14 for the truffle. Other experiments tried different price points, with similar results. They tried raising the price of the truffle to $.27, then $.26 and finally $.25 while pricing the Kisses at $.02, then $.01 and finally FREE! They sold more truffles when the prices were $.27 vs. $.02 and $.26 vs $.01, but when the truffles were $.25 and the Kisses were FREE!, the Kisses overwhelmingly did better than the truffles.
Ariely details other examples of the power of FREE! (by the way, in this chapter, he consistently capitalizes the word FREE! and always adds the exclamation mark). It is almost as though FREE! is in a category by itself. We seem to lose all reason when there is an opportunity for FREE! We will take a FREE! promotional tee shirt even though we would never use it. We will go to a convention and collect a bunch of free samples, then go home and throw them all away. My fiancee’ likes to recycle church bulletins at the end of each service. “Why take it with us just so we can throw it away when we get home?” she asks me. Needless to say, I have started to change some of my habits about collecting souveniers and other FREE! stuff when I go places.
From a marketing and sales standpoint, this is obviously a powerful psychological trigger to getting more sales. Always offer FREE! stuff to your customers. But from an influence and persuasion standpoint, this is one of those things that you need to know about so that you don’t allow people to use the reciprocation principle on you. Taking the FREE! sample gives us a powerful feeling like we need to return the favor, even though we are not required to do so. Upgrading to a large drink so that you can get the plastic cup instead of the paper cup is a profit builder for businesses. I am sure you could think of many other instances where FREE! was used on you to manipulate you into feeling obligated to “return the favor”.
FREE! is a powerful little word. Proceed with caution….
More next time,
Tim
Word Count: 719