The power of ‘Free' in retail.
Updated: Oct 19, 2020
The psychology behind the free sample in maximising sales and cementing customer loyalty.
Lets face it, everyone loves a free gift! However, the idea of giving away a product for ‘free’ can seem counter intuitive as it will require an hefty initial investment by the retailer. Although, at least initially, an expensive marketing method, conversions to sales can be as high as 90% and in terms of reaching customers, free samples are often more powerful and much cheaper in the long run than alternative marketing strategies, such as traditional advertising.
Free samples can be used to:
Test customer receptiveness to a new product prior to full production
Introduce your product to new audiences
Cement brand loyalty with existing customers
Increase knowledge around your various products
Entice repeat customers and increase sales of new products
Promote competitive differentiation
Marketing studies show that some 82% of samplers are more likely to purchase a product after sampling it. In order to understand the power of the freebie in boosting sales, we need to understand the psychology behind it.
Assists in customer decision making
Free sampling assists customers through the 'buyer decision process' when making a purchase. They have identified a need, want, problem to which there are many alternative solutions. Research then informs and influences shoppers choices between these varying alternatives with factors such as price, availability, and personal preferences all considerations. The free sample declutters this process by offering the consumer a tangible experience of the retailers solution thereby swaying the customers decision favourably.
Interestingly, shoppers react more positively to offers where they receive something free than when they get something discounted, even though essentially its the same deal. The power of free means we perceive the value of free products to be higher than their actual worth.
There are three main psychological principals influencing our response to and decisions around freebies.
The Principal of Reciprocity
Dr. Robert B Cialdini, Professor of Psychology at Arizona State University, in his book ‘Influence: The Psychology of Persuasion’, describes The Reciprocity Principal, in which the innate human trait of reciprocity can be used as a marketing strategy to influence customers behaviour.
In essence, the rule of reciprocity states that when someone does something ‘nice’ for you, you feel socially obligated to reciprocate. If someone offers you a free sample, you feel ‘compelled’ to respond by doing something ‘nice’ in return such as ‘thanking’ them by making a purchase.
Phenomenon of Social Proof
The phenomenon of ‘Social Proof’, where people conform to the choices of the majority, even if they are incorrect, is a powerful tool for marketers. Demonstrated in a social conformity study by psychologist Solomon Asch (1951), the reasons cited by participants for going along with the majority were a) they wanted to fit in with the group and b) they felt the group to be better informed.
A further study by psychologist Joe Pinsker, suggests that “samplers with a heightened awareness of the presence of others at the sampling station may feel a level of social ‘pressure’ to make a post-sample purchase.”
The social proof phenomenon, employed in retail marketing, serves to influence and confirm customer choices in the buyer decision making process.
People tend to stick to what they know and are comfortable with. Consumers are reluctant to spend money on an unknown quantity in case it’s a disappointment. Free samples reduce that risk by allowing first hand experience of the product thereby eliminating doubt and hesitation.
Before offering your valuable inventory up to sample consider:
Who is your audience? Knowledge of your target market, for example demographics or previous spending habits, will assist you in directing the right products to them
What is your objective? Understanding what you hope to achieve will help you choose the appropriate products, when and for how long to offer them
How to measure success? Metrics such as promo codes, coupons, email campaigns, and web sign-up pages will track sales and assist in measuring the success or failure of your marketing campaigns
In-person sample offerings are ideal for retail bricks-and-mortar stores where staff can engage with customers and close the sale on the spot. A free offering as a bonus with a purchase, especially if the customer is allowed to choose, is a powerful sales motivator. A convivial ambience created around a wine/gourmet food tasting for example, adds to the customer experience and lingers beyond the store. As a result, not only do consumers purchase more in store, they are more likely to become repeat customers.
Alternatively, if you’re exhibiting at an expo, providing product samples to captivated shoppers can convert them into customers. Exhibits and shows often require samples for their attendee 'goodie bags' offering yet another opportunity to get your product into the hands of potential customers.
A word of caution. Our ability to choose between product offerings declines when faced with too many options. Feeling overwhelmed we are simply unable to make any decision at all. A smaller selection therefore is more comfortable and manageable for consumers.
Free sample offers are not just reserved for physical stores. Providing a few free, sample-sized products with customer online orders encourages repeat buyers to try something new. Similarly, physically attaching a related sample with another product encourages customers to test it. Online sign-up to receive samples is an effective tool in drawing customer attention and engagement, as is offering free samples in exchange for actions such as product reviews, social shares, and feedback surveys. Bloggers, influencers and editors reviewing your samples provide invaluable public relations, brand and product exposure.
The power of ‘free’ in retail as a means of driving sales, brand awareness and customer loyalty, is therefore undoubtably an impactful, cost effective marketing strategy.
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