The Power of Free
If there's one thing your customers can't resist, it's the idea of getting something for free. Those who want some proof need look no further than an article written by Alina Tugend for the New York Times, in which she discusses the results of a study headed by Dan Ariely, a professor of behavioral economics at Duke University.
Ariely and his team gave customers their choice of deeply discounted chocolates—a 15-cent Swiss Lindt chocolate truffle or a one-cent Hershey's Kiss. "When customers flocked to the tables," reports Tugend, "they made what would appear to be fairly rational choices, comparing the price and quality of the chocolates. In the end, about 73 percent chose the truffle and 27 percent chose a Kiss."
But when Ariely's team dropped prices for each candy by one penny—making the truffle a 14-cent proposition and the Kiss free—the numbers virtually reversed themselves. Sixty-nine percent of the customers went for the Kiss, a number that remained steady even when the chocolates were placed near a cafeteria's cash register, where the truffle's negligible cost could be easily added to the price of a meal.
The Po!nt: Consider the impact a "free" component could have on your next offer. Tugend picks this quote from Ariely's book Predictably Irrational. "It's no secret that getting something free feels very good. Zero is an emotional hot button—a source of irrational excitement."
Source: New York Times. Click here for the article.
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