?? The Power of... "Free"

This weekend I was reading a book by Dan Ariely, Predictably Irrational. Honestly, I think I'll get a lot of material from this book for future editions, but this time I'll focus on the psychology of the word "free."

The word free has many implications, and not just in terms of promotions, but also as a strategy to incentivize us to make decisions.

Most of the decisions we make have advantages and disadvantages, but when the word free is on the table, we tend to forget the disadvantages and attach an emotional weight to the decision we make, especially because we humans are always afraid of losing. Typically, when something is free, the sense of loss is lower even if that’s not necessarily the case.

An example of this happens when, in a supermarket, we often buy products we don't want just because they come with a free sample of another product. In our collective imagination, we aren’t paying for it, but is that really true? Do we actually want that new product, or are we just falling into the temptation of the zero-price effect?

Zero, without a doubt, has an extraordinary effect on people's minds. This is why we often see terms like zero fat or zero calories in food products, though it’s not entirely true. The impact of this type of communication would be different if we used other numbers—1% fat or 0% fat—0% always wins.

Ariely explains an example of this in his book, where Amazon offered free delivery with the purchase of a second product, and delivery for 15 cents with the purchase of a second product. The impact wasn’t remotely the same, and once free delivery was implemented, sales increased exponentially.

However, is free always effective? From a personal point of view, I’d say, "It depends," like my beloved Pau Donés, singer of the band Jarabe de Palo, would say. While it’s true that the free effect has a significant impact on sales, it doesn’t work for all products. Mainly because this theory of free is well-known by everyone. Over time, more of us have become skeptical about free things, me one of them, in fact I strongly believe that nothing is for free in this life, but thats to philosophical for this post. Yet we still fall for it, because let’s be honest—no one is 100% rational in their day-to-day life.

Even when it’s a good hook, is it sustainable over time? I don't think so, for several reasons.

1.- Competitors: They know the same theories as we do, so is it really the “freebie” that makes our product attractive? The truth is, if we have several identical products and they all offer a free sample, the selection must depend on other differentiating factors that make our product the best choice beyond the price. In other words, we need to offer a reason to choose us beyond the price, we need to offer reasons to believe.?

2.- Value perception: If our product is characterized by offering too many discounts, our customers will lose their perception of its value, and they will constantly wait for a discount, as they will never want to pay the real price of the product.

That's why, in this edition, I would say yes, free drives the masses crazy, and if we want volume, yes, it’s a good option. But if we want a respected brand image, it’s unlikely to be sustained with this type of communication.

I hope you find useful this edition and see you next week. ??