Episode 177 - Evan Carmichael Interview & The Secret to Creating a Business and Life That Matter

The Law of Obligation and Marketing

We often see this method at work when companies give out complimentary calendars, business pens, T-shirts, or mugs.  This specialty advertising is an $18.5 billion dollar industry.  It not only creates obligation, but keeps your name in front of your future customer.  The studies show that 52% of people given a promotional product said they were more likely to do business with the person that gave them the item.    

The same principle applies when you go to the grocery store and see those alluring sample tables. It is hard to take a free sample and then walk away without at least pretending to be interested in the product. Some individuals, as a means of appeasing their indebtedness, have learned to take the sample and walk off without making eye contact. The studies show that 70% will try the sample when asked and 37% of those will buy the product.   Although some have taken so many samples, they no longer feel an obligation to buy or even pretend they're interested in the products anymore. Still, the technique works, so well that it has been expanded to furniture and audio/video stores, which offer free pizza, hot dogs, and soft drinks to get you into the store and create instant obligation.

Pre-giving is effective because it makes us feel like we have to return the favor. Greenburg said this feeling of discomfort is created because the favor threatens our independence.   The more indebted we feel, the more motivated we are to eliminate the debt. An interesting report from the Disabled American Veterans Organization revealed that their usual 18 percent donation response rate nearly doubled when the mailing included a small, free gift.

A men’s clothing store offers free pressing for suits bought in their store. This creates a sense of obligation among their customers, who when they next decide to buy another suit are more likely to buy it from the store that offered the freebie.  Offering a free inspection or free estimate also will create obligation.  Remember this does not guarantee they will do business with you.  They will be more willing to listen and puts you higher on the list.

An interesting side effect to obligation is what is does to the giver.  Those that help you or give you something feel more positive and have higher self-esteem.   The other bonus is that the giver also feels more committed to the recipient. Which means always let them reciprocate back to you.

Link to article: http://www.sciencedirect.com/science/article/pii/0022103171900254