A study found that simply offering customers a free gift with no conditions upon entering a store can increase spending by 30%.
You may have received coffee samples, free samples, or small treats from store clerks when visiting grocery stores or general merchandise shops. While such acts of kindness are heartwarming, new research has revealed that 'receiving free gifts without any conditions increases spending in stores.'
The effects of unconditional gifts on customer-firm relationships | Journal of the Academy of Marketing Science | Springer Nature Link
Free gifts with no strings attached can boost customer spending by over 30%, study finds
https://www.psychologyofselling.pro/free-gifts-with-no-strings-attached-can-boost-customer-spending-by-over-30-study-380/
Companies offer 'gifts' to consumers in various ways. Some offer 'unconditional' gifts, providing a variety of goods and services without any conditions, while others offer 'reward' gifts, where consumers receive points or stamps based on the amount spent. However, much of the research on gifts between companies and consumers focuses on the 'reward' type, where consumers must take some action first.
Therefore, Paul Vonbell , an associate professor of marketing at Northeastern University's D'Amore McKim Business School, and his colleagues conducted several experiments to investigate how consumer behavior changes when gifts are 'unconditional,' meaning there are no conditions attached to them.
A key concept in this research is the 'law of reciprocity,' the feeling of obligation to reciprocate when someone gives you something. The research team suggests that this law involves two emotional responses: 'gratitude,' which is a generous and positive feeling towards what has been received, and 'a sense of obligation,' which is a feeling of being indebted to the giver.
When people feel 'gratitude,' which is emotional and emphasizes relationships, they are more likely to feel loyal to the store that gave them a free gift. On the other hand, when they feel 'obligation,' which is transactional and driven by the desire to repay a debt, the research team thought that they might spend more at the store as they try to repay the favor.
First, the research team partnered with a major general merchandise store in Scandinavia to conduct their initial field experiment. This store had aisles designed so that customers could visit all the sales floors from the entrance to the exit. On the experiment days, customers who entered the store were unconditionally offered a can of coffee worth approximately $5 (about 800 yen), while on the control days, customers who came into the store were offered nothing.
Researchers positioned near the exit asked shoppers coming out of the store for permission to photograph their receipts and examined how spending differed between the experiment day and the control day. The results showed that customers who received a free can of coffee spent an average of $42.38 (approximately 6,800 yen), compared to an average of $32.53 (approximately 5,200 yen) for customers who received nothing, a difference of nearly 32%.
The second field experiment was conducted at a large supermarket. The research team investigated customer spending under three conditions: 'no gift,' 'a physical gift of branded coffee beans worth $8 (approximately 1,300 yen),' and 'a voucher redeemable for branded coffee beans worth $8 immediately upon entering the store.' The results showed that customers without a gift spent $54.26 (approximately 8,600 yen), those who received a physical gift spent $69.23 (approximately 11,000 yen), and those who received a voucher spent $62.81 (approximately 10,000 yen). All gifts increased spending, but the difference between the physical gift and the voucher was not statistically significant.
To delve into the emotional processes behind these increases in spending, the research team showed participants videos simulating realistic shopping experiences and surveyed them about their feelings when receiving free gifts and how much they planned to spend.
The results showed that when participants received an unconditional gift, both their 'gratitude' and 'sense of obligation' increased. 'Gratitude' was strongly linked to loyalty, which leads to a tendency to return to the store or recommend it to others, while 'sense of obligation' was strongly linked to the amount of money customers were planning to spend on the spot.
One of the most important questions for retailers is, 'How much should we spend on gifts for our customers?' To investigate this question, a research team tested a wide range of gifts, from $0.50 (approximately 80 yen) to $16 (approximately 2500 yen), and found that even inexpensive gifts significantly increased 'gratitude,' 'sense of obligation,' 'loyalty,' and 'spending' compared to giving nothing at all.
While 'gratitude' increased slightly with more expensive gifts, 'sense of obligation,' 'loyalty,' and 'amount spent' remained relatively stable regardless of the gift's price. In other words, retailers can expect a high level of effectiveness even with very inexpensive gifts.
Furthermore, when we investigated whether the effects of unconditional gifts differed between 'new customers' and 'existing customers (repeat customers),' we found no significant difference between the two groups. Both new and repeat customers showed a positive response to unconditional gifts, and the levels of 'gratitude,' 'sense of obligation,' 'loyalty,' and 'spending amount' were similar.
The research team compared how participants' responses differed between 'unconditional gifts' and 'rewards based on points or stamps.' The results showed that both increased 'gratitude' and 'spending,' but unconditional gifts created a significantly stronger sense of 'obligation.' This result suggests that with rewards, customers feel they have received a reward commensurate with their past spending and loyalty, whereas with unconditional gifts, they feel they have received a reward without having done anything.
Psychology of Selling, a media outlet specializing in marketing psychology, argues that unconditional gifts are an easy way to increase short-term consumption and long-term loyalty, and that their cost-effectiveness is attractive. However, it also points out that it is unclear whether the effects of unconditional gifts last beyond the purchase, and that the effect may weaken over time.
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in Science, Posted by log1h_ik