Do sampled freebies drive loyalty?
A new university study concluded that the use of free sampling often comes up short as a marketing tool because many campaigns are aimed at bringing new customers to a brand’s products rather than enticing existing customers to spend more.
According to an article penned in the Harvard Business Review, the researchers, largely from Singapore’s Nanyang Technological University, conducted a study with a major mobile phone operator offering a trial of 60MB free mobile data — about an hour of low-resolution video streaming through the web. The study surprisingly found that low mobile usage customers were largely unresponsive to the trial offer while those familiar with using a lot of data took advantage of the offer, but their data usage didn’t change during the trial period.
The sweet spot was found to be a medium to high amount of data users who were most likely to redeem the offer and also increase their data usage after the campaign.
The researchers concluded that for “experience” goods — for example, a holiday destination, a movie or new software, where value is only discovered after consumption — free trial campaigns should deliberately target existing customers of medium to high usage.
Another finding from the study was that peer effect matters. When the target audience was given the option to forward the free trial to peers (who were also existing customers), the acquaintances were 50 percent more likely to redeem the offer. Researchers wrote, “The sharer was also more likely to take up the offer, probably due to the positive reinforcement through their action of sharing.”
A study from 2017 from researchers at Brigham Young University and the University of Wisconsin-Madison exploring snack product categories found long-term impacts from in-store sampling. In-store sampling effects linger for many weeks, the study found, versus two weeks for simple end-of-aisle displays.
Other findings from the 2017 study:
- The execution of a sampling event by one brand led to an increase in sales for all brands in the category;
- When the incremental cost of a sampling event exceeds 15 times the unit price of the product, the event ceased to be profitable.
- Don’t Count on Free Trials to Win You Customers – Harvard Business Review
- In-store sampling increases product sales – Food Processing
- Assaying the impact of in-store product sampling – Science Daily
- The Psychology Behind Costco’s Free Samples – The Atlantic
DISCUSSION QUESTIONS: Do you think the benefits of free sampling extend long enough beyond trial to make the cost worthwhile? Where do you see retailers falling short in not optimizing sampling?