The Power of Free

I recently went to a coffee shop in the Lincoln Park neighborhood of Chicago and they gave me a free cookie with my cappuccino. The cookie probably cost the shop 15 cents, but to the customer it was a differentiator and a micro-moment of delight. I’ve visited over 100 coffee shops in the past several years working remotely and that was the first time a shop gave me a cookie for free. (Our Chief Morale Officer has certainly had his share of free dog cookies, which has not surprisingly gained our loyalty.)

Whether you’re a consumer or a seller, consider what you receive for free or can give away for free to delight.

Think about a restaurant that gives away free bread, free refills of soda, free chips and salsa, or free mints or limoncello before you leave. Costco famously provides dozens of free samples. If you’re at NBA or NHL game they often shoot free t-shirts out of a cannon and the people who walk away from those games are often the happiest people. At events, receiving “cool” swag goes a long way in overall satisfaction levels. Southwest famously said, “your bags fly for free.” These moments delight customers.

Conversely, how ticked off are you when you go to a restaurant and the waiter or waitress asks if you want a refill of soda, and another, then you get the bill and you’re at $12 in soda. Or the worst, a fee on the restaurant bill to pay for “employee happiness/healthcare/rising costs” – you name it and they add it on. (Ask the waiter or waitress if they receive it and they have no idea where it goes.)

If you’re a shop or professional selling something, try giving away something for free that will delight the customer. When providing something for free it needs to be genuine, authentic, and either expected or surprisingly delightful. When you do the opposite, you’ve lost a lifelong customer and probably gained a negative Google and Yelp review.

Back in the early 2000s, former MIT and current Duke Professor Dan Ariely, ran an experiment with chocolate. In Chapter 3 of one of Sprout23’s favorite books, Predictably Irrational, Ariely and his team ran an experiment.

In one trial of one study they offered students a Lindt Truffle for 26 cents and a Hershey’s Kiss for 1 cent and observed the buying behavior: 40% went with the truffle and 40% with the Kiss. When they dropped the price of both chocolates by just 1 cent, we observed that suddenly 90 percent of participants opted for the free Kiss, even though the relative price between the two was the same.

The study concluded that “free” is a major influence on consumer behavior. Essentially, because most consumers are risk averse – meaning they don’t want to miss out on anything that his little consequence of not consuming.