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The Results:

• When the Kiss was a penny & the Truffle was 15 cents – the selections:
  The Kiss = 14%, The Truffle = 36%, None = 50%
• When the Kiss was free & the Truffle was 14 cents – the selections:
  The Kiss = 42%, The Truffle = 19%, None = 39%
• In a 3rd round, the Kiss was still free & the price of the Truffle was reduced to 10 cents – the selections:
  The Kiss = 40%, The Truffle = 12%, None = 48%

What We Learn

As marketers, there are many take-aways from this study, including:

• With regard to promotional pricing: while the actual dollars and cents may be the same, the BOGO promotion (buy one, get one free) may perform far better than 50% off.
• Free is powerful – but it still may not influence the audience if the perceived value is not there.  39% of the participants didn’t want the free Kiss.
• Price reductions may influence the cost-benefit perception with other associated products (test 3).

The Research

The study was conducted by Kristina Shampanier, Nina Mazar and Dan Ariely in 2005 and contains additional tests, examples and data that sheds light on the power of free products and their influence on purchasing decisions. I highly recommend downloading and reading it – a truly interesting read.

Additionally, Dan Ariely has recently released a book, Predictably Irrational, and should you want to further explore how the world often works according to principles of irrationality in the places where we least expect it, give it a try.

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- Generally attributed to either Albert Einstein or Ben Franklin

Remember back in the good old days when small business marketing was simple? Get a sign printed for the door, place a yellow page ad, maybe mail something a few times a year and then go to the annual trade show. Ahhh…. I can almost hear the click of the Selectric Typewriter as a secretary types up the new changes the year on the marketing plan.

Wow. What happened?

Oh yeah, that.

So, the question is this: How closely does your 2009 marketing plan resemble your 2000 marketing plan? 2005? 1995?

Two things close to the top of many businesses’ “I don’t want to think about it” list are marketing and change. But, if your marketing plan isn’t changing at the same pace the world is, you probably aren’t maximizing your marketing ROI.

Marketing is simply communicating to people why they need your product or service. To effectively communicate, you have to reach people where they are, in a manner that interests them. If your marketing tactics don’t change at the same pace that your market or audience is changing, then you’re left behind. To start, challenge every thing that you have done in the past. If the best answer for not trying something else is:

“We’ve always done it that way.”

“That’s what our competitors do.”

“Well, that ad is already done, so let’s just use that one.”

then, it’s time to question how your marketing budget and marketing plan can be re-vamped to more effectively deliver a better return on your investment.

Next-> Positioning and Messaging

The Novice: A newcomer, they apprehensively sit down.  They probably have a cheat sheet with them and perhaps a drink that they nervously sip a bit too often.   Interactions are brief, requiring much concentration and great care not to commit an error.

The Lucky One:  Always in the right place at the right time, the sun just seems to shine on them.  They have a little skill but only adhere to strategy hit and miss at best.   No matter – lady luck is on their side and things just seem to turn out right.

The Old Timer: They have been around the block a few times and will gladly tell you so.  They learned what they needed to know decades ago.
New-fangled techniques and strategy, smategy – they have all the skill they need, learned at the school of hard knocks.

The Aggressor:  With an unstoppable determination to burn through the budget in record time, they want to attack each opportunity with every available resource, regardless of the current situation.  Rash, un-informed decision-making based on gut-feel lands them in trouble more often than not.

The Expert:  Usually the quiet one at the table.  They have a strategy and know it, are constantly aware of the ever-changing environment around them, and make their spending decisions with precision, based on skill, and then hope to also have some luck.  They regularly evaluate their return and continually educate themselves to improve their skill level.

So, as you look around the marketing team’s staff meeting and get past the desire for a cocktail waitress to bring you a free drink, how is your marketing chip count?

Are you ready to move from basic to advanced strategy?
Does your strategy card have a copyright from the 1980′s?
Would a marketing audit reveal opportunities for improving the odds a bit?

Then, get into the game.   Buy a book, read a blog, hire a consultant.
Dallas was built by entrepreneurs beating the odds with hard work, good strategy and a bit of luck.

And remember…

• Develop a strategy before you begin
• Gain the skills, knowledge and experience to improve your chance for success
• Know the rules, the cost and your budget
• Don’t expect to win every time
• Comps are nice, but a great ROI is the goal
• Recognize that if you get caught cheating, you may get kicked out
• And… you can’t win if you don’t play.