Freebies to consumers ? Beware of Trivialization Effect !

Research Outcome : " Sometimes a Small Gift of Appreciation Is a Bad Idea ! ( both at personal & business fronts ) 

Research Fact : 

Companies often thank their loyal customers with small discounts or gifts, but if the amount is so small that it fails to meet consumers’ expectations it can backfire !

Advice :  Managers shouldn’t underestimate the value of a simple verbal acknowledgment of appreciation.

1 instance :  As an example of a small gift, the researchers point out that Microsoft sent loyal Xbox customers birthday e-cards with gifts of 20 Microsoft points – worth 25 cents.

Reason : Not too long ago, Microsoft mailed loyal Xbox customers an e-card encoded with twenty-five cents’ worth of Microsoft points. The software behemoth might have thought it was showing appreciation. But recipients of the company’s “generosity” might have felt “Is that all I’m worth?” According to a new study in the Journal of Marketing, companies that bestow monetary gifts in too small amounts can leave customers feeling, well, SMALL ! 

Conclusion(s): Financial Acknowledgements, if they are too small, can definitely backfire ! Consumer Behaviorists calls this ' trivialization effect '. Too small a gift, may devalue your own  image and dilute your relatioship with the receiver. Something, is NOT always better than nothing ! 

Next time you are  going to a get together or planning a ' return gift ' as a host, either buy a good one or nothing at all ! Think twice!

Research Conducted by : Team led by Peggy J. Liu, a doctoral student at Duke University.  # Courtesy : Harvard Business Review