I’ve always been a huge proponent that marketing lagniappe drives 3 strong benefits. By giving little unexpected extras (GLUE), you can achieve the following:
- Differentiation – stand out from the competition
- Retention – increase satisfaction which encourages repeat business
- Word of Mouth – give your customers something to ‘talk, tweet, yelp, blog and Facebook’ about
Now a recent study in the International Journal of Marketing Studies has revealed that giving a gift before purchase could increase consumer spending by over 40%. Thanks to Ric Dragon at Dragon Search Marketing for forwarding it. Here is a synopsis of the article by Hershey H. Friedman and Ahmed Rahman:
An experiment was conducted in a restaurant to determine the effects of a small gift upon entry and greeting customers with a thank you for their patronage. Two types of gifts were used: a cup of yogurt and an inexpensive key chain. The authors found that providing a gift upon entry into a store had an impact on how much was spent, on the performance rating, and on how strongly the establishment would be recommended. This study did not find any differences between gifts: a gift of a cup of yogurt had the same impact as a key chain. The difference in amount spent between the group that was not greeted or given a gift and the group that was greeted and given a cup of yogurt was 46.4%, a considerable amount.
The article discusses the underlying principle of reciprocity, the power of surprise and the importance of giving without an implicit expectation of return. The conclusions are very interesting:
This study demonstrates that there is value in greeting customers who enter a store. Customers who are not greeted will spend considerably less, will rate the store lower on performance, and will also be less likely to recommend the establishment. Providing a small gift upon entry into a store will have an impact on how much is spent, on the performance rating, and on how strongly the establishment will be recommended…
The value of a satisfied customer to a business is immense. One study showed that customers who are totally satisfied contribute 17 times more sales to a firm than customers who are somewhat dissatisfied and 2.6 times as much sales as customers who are somewhat satisfied (Whalley and Headon, 2001). If all it takes to improve attitudes of customers is an appreciatory comment and an occasional gift, then organizations should use this approach as part of their marketing communications strategies.
From Yogurt to Peanuts
One of my Hall of Famers in the Project is Five Guys Burgers and Fries. Jerry Murrell and his eponymous five sons (Matt and Jim travel the country visiting stores, Chad oversees training, Ben selects the franchisees, and Tyler runs the bakery). Free is baked into the model at Five Guys:
- Free peanuts when you walk through the door
- 15 free toppings for your burger or dog
- An extra handful or two of bonus fries
- Free refills for your soda or ice tea
- Free of logo’s and excess decor
The free peanuts you can shell are my favorite. According to Todd at cheese-burger.net:
While you wait for your order to be prepared, there is a mountain of peanuts just inside the front door to munch on. Free peanuts have become the trademark “thing” that Five Guys is known for. I saw over fifty bags, 50 pounds apiece, waiting to be opened and devoured. They have signs at the door to serve as fair warning for folks with peanut allergies, and they’re pretty strict about not letting you take any peanuts to go as a safety precaution. But it’s a pretty cool thing: order your cheeseburger, scarf down a handful of salty, ballpark-style, still-in-the-shell peanuts.
By my rough calculation Five Guys gives away over 2 million pounds of peanuts per year. Do little things make a big difference? For a company that does little to no advertising, here is the mantra from founder Jerry Murrell:
We figure our best salesman is our customer. Treat that person right, he’ll walk out the door and sell for you. From the beginning, I wanted people to know that we put all our money into the food. That’s why the décor is so simple — red and white tiles. We don’t spend our money on décor. Or on guys in chicken suits. But we’ll go overboard on food.
Today’s Lagniappe (a little something extra thrown in for good measure) – Turns out that ‘Gifting’ is one of the core principles of ‘Burning Man’. Halycon breaks it down:
How do you stand out in the sea of sameness like Five Guys Burgers and Fries? How do you win repeat customers and influence word of mouth? Are you Giving Little Unexpected Extras?
What’s Your Peanuts or Yogurt?
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