For those who want to make sense of freebie strategies to maximize sales, the University of Miami, School of Business Administration has made available research showing just how best to structure free giveaways with products in order to maximize sales. The study, An Investigation of the Effectiveness of Uncertainty in Marketing Promotions Involving Free Gifts, by Professor of Marketing Michael Tsiros and Assistant Professor of Marketing Juliano Laran, was published in the March edition of the Journal of Marketing.
An ample research work, the study surveyed 1,000 people in both field and laboratory setting, to learn what free giveaways work, when and how. The focus of the paper lies on uncertainty and when this would harm or benefit marketing promotions.
“This work is novel in that it shows that the effectiveness of these promotions depends on whether the purchase decision is affective, meaning there is an emotional influence on the decision-making process, or cognitive, meaning there is more cognitive processing,” explained Tsiros, who conducted the research with Juliano Laran.
For instance, the study showed that shoppers are more likely to purchase a product that triggers more emotion (like makeup) offered with a free gift, especially when the type of gift is unknown. Products that trigger less emotion and more cognition (vacuum cleaners, etc) offered in the same conditions may generate up to 50 percent less likelihood to purchase.
Other findings include:
- Offering one out of a possible four free gifts can be more effective for affective decisions than offering two certain gifts. This is because two certain gifts might “kill the fun” associated with uncertainty, something people making more emotional purchases like. The opposite is true for cognitive decisions.
- Surprise coupons (coupons you bring to a store and, at the checkout counter, their discount value or free gift is revealed by the clerk scanning a code) are becoming common with bookstores like Barnes & Noble. The researchers’ prediction is that surprise coupons for magazines and other entertainment products will be more effective for those making affective decisions than for those making cognitive decisions, like for textbooks.
The study offers more valuable details for marketers to learn how to design effective and profitable promotional campaigns that pair free gifts with known product.