Monday, February 1, 2010


I always enjoy discussing consumer marketing hooks –
Bomb and Exclusivity to name two. Once again, I would like to reference the work of behavioral economist Dan Ariely who points out that most transactions have an upside and a downside, but when it is free, we forget the downside.

Read On:
Ariely’s belief that freebies give us an emotional surge was recently validated by researchers. Consumers were asked: “What practices or methods personally give you the best feeling?” Free product tops the list by 30% of the respondents. Coupons followed at 20%, manufacturers lowering prices, 20%. Ariely states: “The power of free is related to our intrinsic fear of loss in decision making. There is no worrying about loss when we chose free. We also tend to perceive that what is being offered is more valuable than what it really is.”

Freebies work for me. There is an old adage in the restaurant business to which I subscribe: “You can have a great meal with bad service or an average meal with great service, you tend to go back to the restaurant with great service.” What is a component of great service? Freebies! That is why when I finally decide to eat out, since I prefer home cooking; instead of experimenting with a new restaurant, I return to my favorite local Belgian Tavern or sushi bar. Why? I always get a freebie in recognition of my patronage.

I recently read about the utilization of freebies as a marketing hook in other areas. Publishers are offering free e-books on the Kindle, e-reader. The digital giveaways are a hook to get consumers who like what they read, go on to purchase another title for money. Colleges are now utilizing “fast track” applications, waiving application fees and essays. A student only has to sign a no fee form with information that has already been filled out for those colleges that charged. Result? Increased applicant pools have increased enrollment. Some colleges even offered free merchandise (e.g., baseball caps) for applying. Sounds like colleges are now stealing a page from credit card companies.

One concluding thought about freebies. Freebies generate buzz. Positive buzz is the ultimate freebie.


  1. Free offers can lower risk and generate substantial trial which is given. Just don't use the word Free in an email subject line: It can trigger spam filters.

  2. Jim, I agree wholeheartedly with what you say about free being a strong word that generates buzz and interest. I understand that while Jackie might not want to use "free" because it will trigger a spam filter, for the ones whose spam filters aren't triggered, these are my highest open rate emails, so it got past someone's filter, and those that did, came in and redeemed something free for signing up. Especially when someone knows they are going to sign up for an e-mail list, and get something free, the gates are open, no?

    I also learned that when choosing an offer, to think of using a dollar amount rather than a percentage off (discount). People have so many decisions and choices to make, not to mention other emails to open, that if you can grab their attention in that blink of an eye, than you've done a great job.

    Thanks for your insightful help, Jim!