Manage episode 303171017 series 2984018
We all love to keep what is ours. As soon as we have possession of something, it becomes part of our “endowment,” a fancy word for “our stuff.” Psychologists call this the Endowment Effect, and it explains how we value things that we have, even if we got them for free.
However, we also hate losing our stuff, even more that we enjoy getting new stuff. Psychologists call this Loss Aversion, and it is the overall concept that explains why your free trial might help increase your sales. Some people would rather pay for something they used to get for free than lose access to it.
In this episode, we answer a question from one of our listeners, Mohammed, who wanted to know how to convince his team to implement a free trial to increase sales. We shared our theories about why it might work and what we recommend.
Key Ideas to Improve your Customer Experience
There are practical considerations that accompany implementation of a free trial to optimize your success. We discuss a few of them in the podcast:
- 02:41 We share the problem, which is part of our “In a Pickle” feature of the podcast where we address listeners problems with practical applications of the behavioral sciences.
- 04:48 We explain the Endowment Effect and how it relates to Loss Aversion.
- 08:10 Colin shares an example of how a return policy can make or break a “free-trial” experience.
- 14:01. We talk about how you can use the successes with a free trial to outweigh some of the costs of having one.
- 15:10 We talk about the concept of follow-on sales where bringing on new customers presents an opportunity to sell them additional goods and services.
- 18:41 Ryan talks about Reference Points and how it can be difficult to get some people to pay for something they used to get for free unless you make it clear that is the arrangement from the start.
- 22:01 We summarize our suggestions for Mohammed to convince his team to implement a free trial in his company to increase sales.
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Customer Experience Information & Resources
LinkedIn recognizes Colin Shaw as one of the 'World's Top 150 Business Influencers.' As a result, he has 289,000 followers of his work. Shaw is Founder and CEO of Beyond Philosophy LLC, which helps organizations unlock growth by discovering customers' hidden, unmet needs that drive value ($). The Financial Times selected Beyond Philosophy LLC as one of the best management consultancies for the last two years. Follow Colin on LinkedIn and Twitter.
Click here to learn more about Professor Ryan Hamilton of Emory University.
Why Customers Buy: As an official "Influencer" on LinkedIn, Colin writes a regular newsletter on all things Customer Experience. Click here to join the other 22,000 subscribers.
Experience Health Check: You already have an experience, even if you weren't deliberate about it. Our Experience Health Check can help you understand what you have today. Colin or one of our team can assess your digital or physical Customer Experience, interacting with your organization as a customer to define what is good and what needs improving. Then, they will provide a list of recommendations for critical next steps for your organization. Click here to learn more.
How can we help?
Click here to learn more about Beyond Philosophy's Suite of Services.