Free!!!

FREE

The other day I was tiding the kitchen and I opened a drawer to clean it and I found about 3 packs of Haribo sweets and 5 chocolate bar (Bounty, Snickers, Milky way..)…I thought:” Why on hearth do all those sweets are coming from/Why on hearth are those sweets doing in my drawer?” then I remembered, it was on fresher week! On one day they were giving out sweets for FREE! I queued up at the stand to get them…..even if I don’t like those kind of sweet I will have just one bite of one of them and then leave them. So, what was the matter with me???

Thinking about it I fall to the “charme” of the magic word almost every time I go shopping for food, clothes etc….I cannot resist. Then I found myself submerged with dozen of biscuits, socks etc…

So, what is it hiding behind this word? Apparently Zero/free price is a special price that make us do strange things. It makes us feel good and it has no downside…apparently.

I guess the free price can be a useful tool to catch new customers that maybe otherwise will not taste/try your product, does it work? The psychologist Susan Krauss Whitbourne argue that since something was given to us without asking anything in return we will feel kind of compelled to buy the product in order to reciprocate. A bit like when someone is giving us a Christmas present and if we have not bought one for the person we feel almost in the obligation to him/her one.

One example is the 7 eleven supermarket Slurpee (ice drink) free day, people afterwards were more willing to buy Slurpee somehow feeling obligated to pay the company back.

Slurpee

(http://365thingsaustin.com/wp-content/uploads/free-slurpee-day.jpg)

Ryanair has done several time a free tickets sale which is very tempting however you still have to add extras like airport taxes, credit card fee and of course they hope that once on the plane you will spend money on foods, drink, scratch cards, duty free…and at the end it will probably cost more than flying with another airline.

 

Ryanair
(http://vintage.johnnyjet.com/images/PicForNewsletterIreland2005RyanAirSnapShot.JPG)

 

Some restaurant chains are offering free meals for children, the benefits will be that parents will be more willing to spend on other things like drinks or dessert which will be probably at the more expensive than a child meal.

I found this one quite funny:

The ‘free’ suicide curry

Everybody likes something for free. There are a small number of Indian restaurants that offer what is known as a ‘free’ suicide curry. This is a curry with a sauce so hot that few people can stomach it. The sauce is generously ladled over a gigantic plate of rice. The catch is that the suicide curry is only free if you manage to eat it all within a specified period, otherwise you pay the full price. Most people don’t succeed but the fact that it exists and that it’s free, is a major pull of customers to the restaurant.” (http://www.productfocus.com/pricing_psychology.php)

 

http://business.time.com/2011/02/17/the-power-of-freebies-why-companies-pay-to-give-free-samples-to-supermarket-customers/#ixzz2idyXV3MS

http://business.time.com/2011/07/11/odd-consumer-behavior-files-when-stuff-is-free-were-more-likely-to-buy/

http://people.duke.edu/~dandan/Papers/PI/zerofree.pdf

http://www.thinkaboutpricing.com/left-navigation/pricing-psychology.html

http://www.ipsos-mori.com/DownloadPublication/541_sri-the-impact-of-free-entry-to-museums-2003.pdf

http://pubsonline.informs.org/doi/abs/10.1287/mksc.1060.0254

http://business.time.com/2011/02/17/the-power-of-freebies-why-companies-pay-to-give-free-samples-to-supermarket-customers/#ixzz2idxibm00 

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3 thoughts on “Free!!!

  1. Maybe it’s costless for you, but I think it’s not free. The intention of the supplier is to use Reciprocity (as you have already mentioned). A lot of interesting research was done particularly by Robert Cialdini how has defined some key principles on persuasion. So the sweets are not free, they come with an intangible obligation, that you should by one the next time. A lot of companies aim with product pushers on students, there are the Lucky Strike Forces (at least in Germany it’s okay to sample cigarettes) and more famous the Red Bull Dudes. A friend of mine is a part-time brand ambassador. He gets a good salary and his only duty is to distribute 10,000 red bull cans per year on campus.
    Finally, I think companies using this “free” methods must be very careful. When Ryanair is offering every free ticket, sadly they don’t, or you can grab every morning a sweet we expect these offers also for the future and resist to buy those things. The same it’s with vouchers, when there is often a voucher available and consumers may avoid the purchase when there is no voucher.

    By the way: Did it worked? Have you bought any sweets because you felt guilty?

  2. I agree, the word free has a powerful effect on are decision making ability. The blog reminds me of a study conducted by Ariely & Shampan’er (2006). They found that majority of their participants would rather go for a free £10 voucher rather than a £20 voucher costing £7; even though the participants would actually get a £13 voucher for free if they went for the £20 voucher. However if the participants were ask to chose an option of a £10 voucher costing £1 or a £20 voucher costing £8, the majority went for the £20 voucher. This really shows how the word free can disrupt are rational thinking, but why is this?

    Ariely & Shampan’er (2006) suggested that this is because the word free invokes a very powerful emotional response. Also the word free makes us feel good and has no downside so people feel like they do not lose anything making the decision. The dual process model of decision-making supports this, as the world free is likely to impact on our “hot” impulsive system due to the emotional response that would override our “cold” rational system (Metcalfe, & Mischel, 1999).

  3. Great blog, I hope the comment is free! The word free definitely catches my attention, it surely has to be one of the biggest attractors and buzzwords in business, along with the word new! Behavioural and marketing psychologist Elliot Jaffa labels the word free as “the most magical word to get your attention” [2] although this word can often be a trap! Offers such as a “free” trial or “free” shipping and handling or buy one get one “free” can often entice, along with the promise of free products or service but terms and conditions apply… always a catch. Free samples in supermarkets for example can be golden, allowing consumers a risk free tester, gaging for the full price and even repeated sale. [1]
    Free offers can often lead to suspicion of value, although it is apparent to simply be a tale, this urban legend sums my point up well. This sees a new but unwanted refrigerator cast on the front lawn with a sign “free to a good home” seeing no response. Although one listed as “fridge for sale, $50” it was stolen the next day. Perhaps a free product diminishes its value, leaving one to suspect what is faulty or unusual about the product or service. [2]

    References

    [1] http://www.wisebread.com/the-psychology-of-free-and-its-power-over-you
    [2] http://dealnews.com/features/Psychology-of-Shopping-When-Free-Isn-t-Really-Free/431848.html

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