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The Importance of 'Free'

April 17, 2012  
When Kantar Media asked over 2,500 people what encouraged them to purchase more products online, the top two responses had something in common: the word "free." "More than three out of four shoppers cited 'free shipping' as the factor that would get them to purchase, and the second most common was 'free returns,'" writes Roger Dooley at Neuromarketing. "This data underscores the fact that FREE! still works like a charm."

To illustrate the word's positive effect, he recounts an Amazon campaign that offered free shipping in several countries. Sales rose everywhere, except France. A quick investigation revealed the problem—instead of free shipping, the French offer had been switched to an ultra-low delivery charge of around 25 cents.

While the difference between $59.00 and $59.25 would seem too trivial to notice, it matters to online shoppers. And when Amazon corrected the French offer—making delivery truly free—an instant uptick in sales matched that observed in other countries.

Free strategies you might consider:

  • Free shipping. As with Amazon's experience, one major retailer sees a significant boost from free shipping offers, even though its everyday shipping costs are very low. "What?" asks Dooley. "Consumers behave irrationally? Who knew?"
  • Free returns. Zappos built its brand by eliminating risk from the return process—customers who don't worry about costs associated with returns are more likely to make a purchase.
  • Free products or upgrades. "Is there an inexpensive companion product that most everyone will find useful?" he asks. "An upgrade, perhaps? A warranty extension?" Adding something that costs you little can add to the perception of value, and might be more effective than simply cutting the price of your product or service.

The Po!nt: No matter how sophisticated customers become, it seems they will still find freebies irresistible.

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