The power of FREE!


Share on LinkedIn

Predictably Irrational, author Dan Ariely recounts a great story about what happened when began to offer free shipping on orders over a certain amount – in this case, $31.90. So if you purchased a single book for say, $17.99, then you paid $3.99 for shipping. But if you increased the order to $31.90 or above, then the shipping on the entire order was free.

When the policy was rolled out world-wide, sales increased dramatically. It seemed that there were a whole lot of people all over the world who were willing to pay for the cost of an extra book just to take advantage of the free shipping deal. While the folks at Amazon were pleased over the result, the noticed that in France, (and only in France) there was no increase in sales. So why were the French so different from the rest of the world with regards to this offer? According to Ariely, it turns out that the French were reacting to a slightly different deal.  

“Here’s what happened. Instead of offering FREE shipping on orders over a certain amount, the French division priced the shipping for those orders at one franc. Just one franc–about 20 cents. This doesn’t seem very different from FREE! but it was. In fact, when Amazon changed the promotion in France to include free shipping, France joined all the other countries in a dramatic sales increase. In other words, whereas shipping for one franc–a real bargain–was virtually ignored by the French, FREE! shipping caused an enthusiastic response.

Here’s the takeaway: When consumers are faced with choices where one is free, they often overreact to the free one. It certainly happened on a large scale here with the French, but it also happens everyday in our own backyards. If you have to discount, think about the power of FREE and how it affects human behavior.


Reader feedback is the lifeblood of this blog – whether you agree or disagree with what you’ve read, please feel free to post your opinions in the comments section below.

Republished with author's permission from original post.

Patrick Lefler
Patrick Lefler is the founder of The Spruance Group -- a management consultancy that helps growing companies grow faster by providing unique value at the product level: specifically product marketing, pricing, and innovation. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here