Why Free Samples Win New Loyal Customers, Backed by Science
This week, the Atlantic published a compelling article about the psychology behind Costco’s free samples. The timing couldn’t have been better, because it coincides with the launch of our new customer acquisition tool, Bites. The first of its kind, Bites was designed with the psychology of sampling in mind. Merchants are able to tap into Belly’s network of over 4.5 million members by offering a free sample of a signature product or service to customers in their neighborhood who have never visited their business. Unlike other customer acquisition tools available today, Bites lets merchants track how many new customers visited their business and became repeat customers.
The science behind sampling programs is convincing, as illustrated in the article. Financially, retailers love giving free samples because they can boost sales by as much as 2000 percent! Behaviorally, samples can sway people to habitually buy things they never used to purchase.
Costco published some figures in regards to the success of their sampling program. According to the article, the short-term spike in sales isn’t the only effect of product sampling that matters. It's great for making customers loyal to stores and brands over longer periods of time. In the past year, beer samples increased sales by 71 percent on average, and samples of frozen pizza increased sales by 600 percent.
Besides product education, sampling has deeper psychological powers. “Reciprocity is a very, very strong instinct,” says Dan Ariely, a behavioral economist at Duke University. “If somebody does something for you”—such as giving you a quarter of a ravioli on a piece of wax paper—“you really feel a rather surprisingly strong obligation to do something back for them.”
Ariely adds that free samples can make forgotten cravings become more salient. “What samples do is they give you a particular desire for something,” he says. “If I gave you a tiny bit of chocolate, all of a sudden it would remind you about the exact taste of chocolate and would increase your craving.”
An article in Time magazine by Brad Tuttle echoes a similar sentiment: “In terms of reaching consumers, free samples are often much more powerful, and much cheaper than traditional advertising. Once you’ve had your free sample, it’s up to you to figure out if this is a product you’d choose to buy if it wasn’t part of some exciting giveaway. Sometimes, consumers come to their decisions to buy or not based on factors other than the taste, quality, and price. Sometimes, they decide to buy simply because they’ve gotten a freebie and, consciously or not, somehow feel obligated to pay the company back.”
Other factors matter as well. With Bites for example, you have the ability to introduce new customers to your business and what you have to offer. Does your customer service stand out? Maybe it’s cool atmosphere or signature pizza roll that regulars line up around the block for. It’s important to remember that a customer who comes in to redeem a Bite is experiencing your business for the first time, so making a great first impression is key. Belly merchants like Jacob Boles at Sweetish Hill Bakery in Austin are raving about Bites. “Our Bite is for one small drip coffee, and one small pastry to go along with it. We wanted to offer a taste of our product as an incentive to get new faces in the door, but we didn't want to break the bank either. Customers who use Belly at other places around town that have not made it into our shop, just got a taste of what they have been missing! [The Bite] is easy to set up and then let it roll. The people at Belly do a great job of making things hassle free so you can focus on other tasks.”
If you’re still on the fence about the power of free samples for increasing sales, here are 4 reasons to try Bites and win new loyal customers.
Only available to NEW customers, not existing ones
With Bites, you can rest easy knowing you’re acquiring truly new customers. One of the common complaints about Daily Deals sites, like Groupon, is that the offers can’t be targeted to new customers only. What ends up happening is deal-seeking current customers eat into your profit margins. Because Belly is a loyalty program, we won’t make your Bite available to your existing Belly customers. Just new customers in your neighborhood who have yet to visit your business. New customers only here!
Ensures new customers are trying your BEST stuff – risk free
Since you know your business best, you get to select what you want to give away as part of your Bite! Since this is a new customer’s first impression of your business, we recommend offering a signature product or service. Belly gets new customers in your door, but it’s up to you to keep them coming back for more!
Once in the door, new customers will likely spend more too! (The Law of Reciprocity)
Like the Atlantic article alludes to, the law of reciprocity is powerful. By offering something for free, customers are inclined to return the favor – a la – buying something! For good measure, we also give you the ability to require a purchase with your Bite. Even if a new customer doesn’t buy something their first visit, think about the value of that customer over their lifetime. How much will they spend during visit, 2, 3 and 53?
Measure your success
Built-in tracking shows you how many people reserved your Bite (on web, mobile and email), visited your business and became repeat customers. All of this is tracked in your Web Command Center so you have full visibility into the success of your Bite! Use the data provided to drive your future strategy.
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