Posts Tagged ‘Internet marketing’

Online Marketing Conversion: “Free” is a Pretty Strong Incentive

November 18th, 2010

I recently ran across a somewhat informal, but interesting none-the-less, study on the power of “free” to drive a conversion. Behavioral economist, Dan Ariely, heard that a New York nightclub was promoting an event featuring “free tattoos,” so he sent a research assistant to see if this incentive led to a conversion in the form of a tattoo.

The power of “free”

The resulting research isn’t scientifically or statistically rigorous, but it does offer a little insight into the command that the simple incentive of “free” adds to an offer.

  • The average age of “participants,” that is club-goers at that establishment on that night, was 26
  • Of the people in line to get a free tattoo, 68 percent said they would not be getting the tattoo if it wasn’t free
  • 90 percent of those in line were aware of the free tattoo promotion
  • Only 15 percent made the decision to get a tattoo after arriving at the nightclub
  • 85 percent arrived that night planning on getting the free ink

The results of this informal test:

The results indicate that the power of “free” is surprisingly influential.  When we face a decision about a tattoo, one would hope that the long term permanency of the decision, coupled with the risks of getting different types of infections would cause people to pay little attention to price, and certainly not to be swayed one way or another by the power of free.  But sadly, the reality (at list in the nightclub scene in New York) suggests that the power of free can get us to make many foolish decisions.


The big incentivized picture

Okay, not scientific. And plenty of test subjects were likely fairly impaired by chemicals in the decision process, but the raw numbers show that 68 percent of the people made their conversion decision (getting a tattoo) based on the incentive alone.

Where does that fit in the larger world of marketing? In the Landing Page Optimization training course found at our sister company, MarketingExperiments, incentive is defined as an appealing element you introduce to stimulate a desired action. That action might be a clickthrough, or to fill out an online form, or even an actual sale.

And the incentive has a key objective – to “tip the balance” of emotional forces from negative friction elements to positive to achieve conversion.

Here’s a chart from the MarketingExperiments Landing Page Optimization course illustrating that concept:

Here’s the thing with incentives, even if they are free – some are better than others. Depending on the goal of the offer, the incentive might be a free webinar, or a free computer mouse, or $100 off of a training session. The possibilities are practically limitless, so the key is to test incentives. All too often companies will try one incentive offer then quit. For any offer, an “ideal incentive” probably exists – you just need to keep testing until you find it.

Related Resources

Become a Certified Professional in Landing Page Optimization

Dances with Science: Are you better off not A/B testing?

Landing Page Optimization: Clean air or a free backpack? (Which is the bigger incentive for Sierra Club members?)

Internet Marketing: Landing page optimization for beginners