Free products are more valuable than discounts

The Vodafone advertising campaign which has been running for the past year or so in the UK really, really annoys me. It is based on two cartoon bees talking to each other about Vodafone’s “freebees”. It annoys me on two levels. For a start, what they are talking about is not completely “free”, but part of the package you get from the phone service you buy. Secondly – and this is the bit that really gets me – the entire campaign is based on a miss-spelling. It is not “freebees” but “freebies”. Vodafone cannot spell…! But we knew that anyway, because they spell “phone” as “fone”.

I’m probably not the only person unimpressed by the campaign – so far this year Vodafone revenues in the UK have dropped by 4.5% and reports paint a gloomy picture, even suggesting a take-over by Verizon may be on the cards.

However, we should congratulate Vodafone on bringing the whole notion of a real “freebie” much greater attention. After all, we all like something free – something, real that is. If we get something free, strange as it may seem we do value it.

In other words, if you sell one item and offer a discount on an associated or additional item, your customers value it less than they would do if you gave the item away free of charge.

This means that giving away things free is more valuable for your business than offering discounts because your customers will value your products more highly when you give some of them away. This is counter-intuitive, but the research showed clearly that people value discounted products as worth less than free products.

So, Vodafone is on the right lines after all by offering something free. But we have to also perceive it as a real free product, not just something we would expect as a matter of course.

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Graham Jones
Graham Jones is an Internet Psychologist who studies the way people use the online world, in particular how people engage with businesses. He uses this knowledge to help companies improve their online connections to their customers and potential customers and offers consultancy, workshops, masterclasses and webinars. He also speaks regularly at conferences and business events. Graham is an award-winning writer and the author of 32 books, several of which are about various aspects of the Internet. For more information connect with me on Google+
Graham Jones

@grahamjones

Graham Jones is an Internet Psychologist, professional speaker and author of 32 books who helps businesses understand the online behaviour of their customers
Should you target your website at trackers, hunters or explorers? https://t.co/s3UVgz8zOe https://t.co/UQWGJQrBmp - 3 days ago
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