An interview with Maggie Wenjing on her recenty published IJRM paper with Chuang Wei, Lu Yang, Hean Tat Keh
If customers love a product, give it for free
The first gift in human history was probably given by a tribal leader to a high-performing caveman. But we cannot attest to that. What we can attest to is marketers often use premium/ ‘free-gift’ promotions. They offer customers a free product to entice them to buy a bundle of two or more products.
Imagine that you were searching to buy a pair of earphones. You might find a deal with a flash drive as a free-gift more attractive. But what if, the earphone you wanted to buy in the first place, was the free-gift in the deal?
“Sometimes we want to feel lucky in our lives. We look for signs around us” - Maggie Wenjing
This counterintuitive promotion, where a customer’s target product is framed as a free-gift, can make customers feel lucky and increase their purchase intention, suggests research by Tsinghua University’s Maggie Wenjing Liu and Chuang Wei, Nanjing Agricultural University’s Lu Yang, and Monash University’s Hean Tat Keh. And I got to interview Maggie Wenjing Liu to unpack this research published in the June 2022 issue of IJRM (Volume 39, Issue 2).
“Before, we wouldn’t know what customers are looking for unless we asked them. Now, company algorithms and customers’ product search histories can tell us what their target products are,” explains Maggie.
Seeing companies like Amazon and Clinique promoting their best-selling products as ‘free-gifts’ sparked Maggie’s and the corresponding author, then doctoral candidate Lu Yang’s interest. Do people buy more when their target product is promoted as a free-gift? If yes, why do people do that? Maggie and Lu then sought out Chuang Wei and Hean Tat Keh to join the research team and answer these questions. How did the digital transformation change the way in which physical and online retailers provide value to customers?
Make sure it’s free, and customers feel lucky
Maggie and Co. ran a series of experiments and found that people indeed were more likely to get the deal when their target product was promoted as a free-gift, because this counterintuitive promotion makes customers feel lucky.
“Sometimes we want to feel lucky in our lives. We look for signs around us” reflects Maggie. And perhaps it is easier to make customers feel lucky in the digital age. For example, companies can leverage search history and complementary data to personalize buy-one-get-one-free deals where the customer’s target product is promoted as a free-gift.
But Maggie also cautions, “we do not want to overclaim that this promotion framing will work every time. This counterintuitive promotion works when customers find the deal serendipitous, and do not suspect being targeted. And it works better when the target product is offered as free than as a percentage discount.”
Curious to know more about counterintuitive free-gift promotions? Click here for the full paper!
Meet Maggie
Maggie Wenjing
Associate Professor in the Marketing Department at Tsinghua University
Maggie obtained her doctoral degree from the Rotman School of Management, University of Toronto.
Right from her early years, Maggie knew she wanted to be a scholar and figure out things in the world.
Now, her work demystifies multiple aspects of how customers experience things and respond to what companies do.
Maggie usually has several ongoing projects and the urge to complete them drives her to go the extra mile. She credits her family, friends, and coauthors for the warm support system. Striving to understand and communicate interesting phenomena seems quintessential to being Maggie.
This article was written by
Jareef Bin Martuza
Ph.D. Candidate at the Norwegian School of Economics
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