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Sunday, April 06, 2008

Is this an argument in favour of free estimates?

This image is from an open courseware site. Caption reads: An experiment testing money mapping and value of experience. (Image courtesy of Prof. Dan Ariely.)

Readers of this blog know that I don't think much of "free estimates" as a marketing ploy. It invites you to spin wheels and waste times as purchasers seek out the low-ball offer. But here is a counter argument -- and it is the marketing value of the word "free".

This article describes some research by Duke and MIT economist Dan Ariely in his book: Predictably Irrational: The Hidden Forces That Shape Our DecisionsHis clearest example of irrational thinking is a Halloween treat test. He offered kids who knocked at the door two Hershey Kisses. They could then either accept a third small Snickers bar for free, or trade one of their Kisses for a large bar.

"The bigger bar was a better deal, an 8-to-1 return on chocolate. But most chose the smaller one; the idea of getting something for nothing was too tempting."

I still don't like Free Estimates; but am intrigued at the possibilities of finding something else Free that is actually conditional on your making the purchase. Maybe, indeed,throwing in the big free screen television, or some 'hot button' extra you know the potential client would really like, into the estimate/proposal makes sense (of course adjusting your proposal cost to more than cover the 'free' extra.)

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