The Power of Free (and what it means to consumers)
Offering something extra free at the point of sale is one of the oldest retail marketing tricks in the book, as a way to give customers the perception that they have received extra value for their money.
We even have phrases for this in the dictionary: Baker’s Dozen appears in the Oxford English Dictionary, to describe a baker giving a customer 13 loaves when they ordered 12, a term first recorded in 1596 by the writer Thomas Nashe.[1]
More than four centuries later, ‘extra free’ promotions are among the most commonly seen incentives in supermarkets and other retail premises (as well as wholesalers), but what does it all mean for consumer perceptions?
In this guide, MRM have taken a look at some of the different impacts and effects of product promotions, to help craft the most effective campaigns possible.
Promotions vs price cuts
Product promotions like ‘extra free’ and ‘2 for 1’ are one side of the coin, but how do they compare with just dropping the price? There are plenty of ways to do that too, from on-the-shelf discounts, to money-off coupons, to retailers marking items ‘reduced to clear’.
In 2022, research published in Health Economics[2] compared the effects of price discounts and multi-buy deals like ‘buy one, get one free’ on a range of food and drink products.
The study found that across both categories, the use of promotions has fallen by about 10% since 2014 – but over a third of food and drink items purchased by British shoppers are still on some kind of offer, suggesting this is a technique marketers might want to revisit.
Multi-buy and ‘extra free’ offers by definition encourage customers to buy – and consume – a higher volume of product, reducing the perception that a specific product is ‘scarce’ (and therefore should not be used up) in the home.
Practical preorder promotions
What if there IS no point of sale – yet? Preorders are a great way to manage the financial risks of a new product launch, and giving something extra for free is an excellent incentive to encourage customers to order in advance.
A 2019 article in Psychology & Marketing[3] examined this and again found that price discounts and free gifts are both in common usage in preorder promotions.
The research looked at consumers’ ‘construal level’[4] – the level of detail with which they think about a product before it is released:
- High-Level Construal: More abstract/general thinking about a product far in the future
- Low-Level Construal: More focused thinking about specific features of a product due for imminent release
It revealed that heavy price discounts are most effective closer to the release date of a product, whereas free gifts can be associated with both high-level and low-level construals.
In practical terms, that means offering something for free is more likely to increase customers’ buying intent, no matter how near or far the product’s release date may be.
Gain framing vs loss-reduction framing
We’ve looked at what promotions you can offer and when you can offer them – now what is the best way to describe the deal to shoppers?
One way to divide descriptions is into the categories of ‘gain framing’ and ‘loss-reduction framing’.
- Gain Framing: Focusing on what you get if you buy (e.g. 50% extra free, 2 for 1, BOGOF)
- Loss-Reduction Framing: Focusing on what you'll lose if you DON'T buy (e.g. limited time only, "Don't miss out!" messaging)
A study published in the International Journal of Market Research in 2024[5] compared consumers’ perceptions of waiting for a product to be delivered – linking back to high and low ‘construal’ levels.
The researchers found that customers who perceive waiting times as longer than they actually are respond better to immediate, loss-reduction messaging (linked with low construals).
In contrast, customers who underestimate the duration of their wait respond better to the promise of a bigger reward in the future (linked with high construals).
Framing at the point of purchase
This might sound surprising – ‘extra free’ promotions are often used to encourage increased purchase volume at the point of sale, a low-construal scenario – but in many cases consumers may be thinking about the long-term when buying in larger quantities.
As a result, more urgent “Don’t miss out!” and “Buy now!” messaging may be more effective on more rapidly consumable, convenience products like confectionery and carbonated beverages.
In contrast, gain framing (e.g. focusing on the ‘extra free’ amount) could be the way to go for products consumed more slowly – it all depends on the mindset of the shopper.
How to describe ‘free’ for maximum value
In framing ‘extra free’ offers, an issue that is often overlooked is how to describe ‘free’. To put it another way: is it enough to just say ‘free’?
Research suggests not. A 2020 study reported by the Journal of Retailing[6] compared the wording “Get it free” with a more specifically price-focused framing “Get it for $0”.
This price framing proved more effective for emphasising the cost value of the promotion, highlighting the potential loss due to not buying, and was especially effective for purchases made “in close social distance” (i.e. in person, rather than online/for delivery).
A version of this kind of price framing is already commonplace on ‘extra free’ packaging, for example a 100g product with 50% free might include the line: “150g for the price of 100g”.
Highlighting the monetary price, the cost saving and the potential loss in this way is subtle but powerful as a means to further incentivise purchase in the mind of the consumer.
The power of perception
As with any purchase, manufacturers and retailers are making a promise to consumers that the product will do what it promises on the box – a concept known as ‘perceived performance risk’ for the shopper.
Multi-buy and ‘extra free’ promotions can heighten the perception of risk, due to the larger quantity of product being purchased.
A 2010 study in the Journal of Product & Brand Management[7] found that this actually enhances the effectiveness of ‘extra free’ product promotions in cases of low perceived performance risk, encouraging customers to stockpile more of the product.
But the inverse is also true: on products perceived as high performance risk, price cuts are more effective than multi-buys.
Again, that doesn’t mean either technique will not be effective, but is something to keep in mind when designing campaigns and deciding how to describe the deal on offer.
Does it work?
Yes! Non-monetary product promotions such as Buy One Get One Free (BOGOF), 2 for 1, ‘Big Value’ pack sizes and Extra Free can all enhance the perception of purchase value and increase volumes bought by shoppers.
Indeed, Ogilvy UK’s vice-chair Rory Sutherland wrote a column for the Market Research Society’s Impact magazine in 2024 looking at the true potential of this ‘feel-good factor’.[8]
He explained that he had always wanted to put a “50% extra free” product on sale with a 50% price increase, to see what would happen.
“I wanted to see how much of the uplift was created by an actual reduction in price, and how much by the implication that there was a deal on offer – even in the absence of any material reduction,” he wrote, while stressing that to do so in reality would be “completely unethical, not to mention illegal”.
However, he quoted an unnamed acquaintance who claimed to have done exactly that several times by mistake, who said: “You wouldn’t believe how much money we make.”
Do it right with MRM
At MRM we believe in the power of well-framed and ethically delivered campaigns, including promotional packaging for ‘extra free’ pack sizes, supported where appropriate by money-off coupons to encourage subsequent purchases.
By combining multiple channels into a single campaign, you can reach consumers of differing mindsets, while enhancing the overall perception of value, cost savings and loss avoidance across the board.
To find out more about how we can help craft the perfect campaign for your product, contact MRM today.
[1] https://www.oed.com/dictionary/bakers-dozen_n
[3]https://onlinelibrary.wiley.com/doi/10.1002/mar.21242
[4]https://en.wikipedia.org/wiki/Construal_level_theory
[5]https://journals.sagepub.com/doi/10.1177/14707853241240602
[6]https://www.sciencedirect.com/science/article/abs/pii/S0022435919300831
[8] https://www.research-live.com/article/opinion/rory-sutherland-feelgood-factor/id/5121542