What is so GREAT about Free?

It appears to be the only offer than doesn't get turned down by the general public. You see it everyday. Free Sample, Free Gift, Free Trial. But as we willingly accept the free pen that doesn't work or the extra pizza we wont have time to eat. Very few customers actually consider the value of the free item.

Even though the quality of the item may be questioned, if you have been given a free gift then asked what value you put on it it is HIGHLY unlikely you will value it as it was "purchased" at 0p.

It appears that as buyers, we hate to make a loss. Nothing new, there you may say but probably not quite in the way you are thinking. When you buy an unfamiliar product you are risking the money you have paid for the results you get back. A personal Return on Investment so to speak. But when you have been presented with an item that costs 0p (FREE!) that has been no monetary investment, meaning no risk potentially no loss.

My general knowledge of behavioural economics is limited, but I have just finished reading Dan Ariely - Predictably Irrational . A very interesting book on how we react to certain triggers. There are many experiments involved, showing great information on how people react without the heavy reading of why they shouldn't be acting in this way.

With products you can very quickly put a value on them. But what about applying the concept of free to a service you have been provided with?

During first few weeks of term, standard direct mail offers appeared through the door screaming TRY THIS TAKEAWAY or words similar to that effect. I attended the freebie freshers fair, picked up things i didn't need and discounts i wouldn't use. But the one offer that caught my attention came through an email a Love-Film promotion. 30 day free trial.

I signed up, waiting for the catch. Inputted my address. Then had to hand over details incase i wanted to keep the service, which i was able to remove as soon as I'd had confirmation email (which i did). Then the 30 days started, dvds came through and it was fun. Free films when i wanted as i wanted. Then at 21 days i had an email letting me know free trial was almost up. I signed up for the £10 a month service and haven't looked back.

Some would say it's a great product and something i clearly wanted. Although, i'd never needed films on demand before, I bought them when i saw them or went to cinema. So what made me sign up after the free part?

I'd developed a sense of ownership for the Love-Film service. As consumers we are creatures of habit, not wanting to change from our favourite brands. With services we become attached and find it difficult to go back to before, a downgrade as such. Soon an item you never actually wanted has become essential luxury to you, due to a free trial.

The element of giving up applies to our reaction to loss. Once we have ownership of an item, we do our best to keep it.

This ownership adds extra value to any item, so a 0p item becomes worth £1 or more due to personal value. "It's Mine" brings a loyalty that can't be bought but can be tempted by FREE.

That's it for me for now
Amy

@MissAJBurton