The Magic of “Free”


If I gave you a choice between a Hershey’s Kiss at 2 cents or a Lindt truffle at 16 cents, which would you choose? Now let’s say I cut each of the prices by 1 cent. Which would you choose?

And now let’s say I cut the prices again, so that the Kiss was free, and the Lindt truffle was 14 cents. Which would you choose?

In a now famed experiment by Dan Areily, he found that in the first two cases, when the difference between the prices was 14 cents but neither was free, most people chose the better chocolate at a higher cost. But as soon as the Kiss was free, the results reversed, with people choosing the Kiss almost 3 to 1.

Why? His conclusion is that “free” makes us act irrationally.

And while I don’t disagree, I do think that is a bit simplistic. As humans and consumers, we don’t always make decisions by weighing the benefits against the costs, sometimes we just look at the cost. Because cost represents fear. And when we eliminate the cost, we eliminate the fear.

So “free” represents a risk free purchase. You won’t lose anything. You might not get the best product, or the highest benefit. But you won’t lose anything.

“Free” can do a lot for your business, if you can figure out the right way to use it.

  • Free shipping
  • Free add-ons with purchase
  • Free downloads with signup
  • Free warranty

What are some other ideas? Share yours in the comments below.