Give and take coffee mugs

Nowadays marketing strategies and tools go along with the psychological techniques which are becoming an integral part while working with leads and customers. That is why it is really useful to know the main ways of influence to be more successful in the field of marketing.

This article will tell you about one of the most powerful effects in marketing - the endowment effect, which you maybe did not realize, but met in your life many times. Where did it come from and how to use it on the Internet? Let’s come to these points right now.

Everything started from the experiment of three scientists: professor Richard Thaler,Jack Knetsch and the psychology Daniel Kahneman.

In the first part of the experiment scientists gave coffee mugs (which cost 6$) to one half of students and announced, that these small gifts became the property of the participants. After some time, the auction between the happy owners of unique mugs and ordinary students began.

After the end of auction it turned out that the offer price set by the owners of mugs reached approximately 5.25$ per cup, while the demand price by students was around 2.25$ - 2.75$.

In other words, the fear of losing what you already have, becomes the cause of the huge contradictions in the evaluation of the cost of the coffee cups, received by the first half of students for free.

After analyzing the data, scientists have come to a very interesting conclusion: the price of goods established by the owner, will be significantly higher than the one for which the same person would be willing to buy the this product.

This is the endowment effect - its essence is very simple: people appreciate the things that they already own more, than those, which they might own.

Mostly the endowment effect appears on the "not everyday" goods, because all the needed minimum already became obvious, but the new products and services, fresh ideas attract more attention and willing not to lose them. source

It is quite easy to find the example in the real-time commerce. Where? In any auto-salon. Imagine, you want to buy a car. What to chose? There is such a big amount of different options. Firstly, you go to one salon, to have a look at car #1, and it is attractive, with suitable characteristics.

After it, you come to another salon for the comparison and the shop-assistant not only shows you car #2, but also gives you a possibility to try it in test drive. While driving you can feel the car on the road and pretend yourself a real owner of it. Moreover, you start to associate yourself with this car.

What happens? Here comes the endowment effect - you feel the car yours and are ready to spend more money on it, comparing with the car #1.

According to the statistics by The Maritz Research, which surveyed 80,219 buyers of 2012 model-year vehicles, only 11.4% didn't take a test drive.

Ok, great. Now it is clear, what is the endowment effect and how it is used in real life and commerce. But the question is, what to do with e-commerce and the inbound marketing itself? Here it is impossible to give a product or show the service right to the potential customer, from “hands to hands”. That is why there are some tricks for you to use endowment effect properly to be successful.

You don’t need to use these ways all together, but try them and choose the most acceptable for your case.

Free trials:

Free demo version of any software product is the first step to the acquisition. Why so? Because it is the most bright example of the endowment effect in inbound marketing. It gives the feeling of owning the product or service.

For example, you use the product for a month and it turns out that for some time it becomes your property. When the use of the test period ends, you already have time to get used to it and want to pay for the purchase. Especially if the demo is good.

Most of the internet service providers use this way of engagement of users. One of them is the Avast Antivirus, which offers Internet Security software free for 30 days. It is the brightest opportunity to attract people - give them to try. It is better than any advertisement, because the opinion on the product or service would be based on the own experience of the user.

After the potential customer learn a lot about the software (like in case of Avast) he or she would be ready to pay for it with a greater pleasure, knowing exactly what to pay for.

Avast source

In a clothing stores shop assistants usually offer you to try whatever you liked. While skirt/shirt hangs or is on the maneken it seems to be a little expensive. When it is on you, you can feel it own. “Perhaps it is not so expensive”, you think. The same trick is used by the online clothing stores. When the delivery comes you put on the clothes and pay only after it. That is how they get such pleasant feedback!


Permanent discount coupons can be attributed to the endowment effect. In this case, the keyword is permanent. The buyer is aware of the right to use the discount at any time, whenever he or she wants, so it gives the feeling of master in the situation, the discount is already a kind of property, and that's why it becomes to be more valuable.

Nowadays is very popular to create and give such coupons to potential customers, especially on the services. The first variant - free trial versions are commonly accepted for the product offering and the coupons are more suitable for non-material offers.

Such permanent discounts became so beloved, that there appeared even the portals with the coupons in different fields. The most important here is, that they found their customers!

One of the websites, collecting the discounts at the one place is Groupon, which is successful according to the users’ activity. There you can buy a coupon or even several ones on any offer and use it when you want to do it.

Groupon source

What is important about the permanent discounts, when you do not want to place them on special websites, but offer by yourself:

  1. "Gift card" instead of "coupon". Sometimes, for the customer to feel him/herself the rightful owner of a benefit provided by an online store, it is needed simply to replace the word "coupon" with the phrase "gift card".
  2. The absence of a call to action. Make the customer free from having to make decisions. Notification like "We've added a gift card on 25$ to your shopping cart! Make a purchase at 75$ and save 25$ " will greatly facilitate his life and increase the possibility of purchase.

The same story happens when you order a coffee in the café and you are given a coupon for a gift - a cup of coffee. There are ten places for stamps or stickers on the coupon. So, you will get the present only when all 10 squares are filled. The trick directly includes the endowment effect: the coupon has two places filled. It looks like you are getting closer to the gift. It is 20% already yours.

Selling texts:

Of course, in the text it is impossible to give a person to try something. But you can do so that the potential customer starts to imagine him/herself the owner of your product. You need to be precise and specific to show the process of how your service or product is presented and how it feels to be the owner of it.

Demonstrate the results: the lead should feel as if he or she had already received everything you offer. This is the power of well-prepared content. It should be highly qualified, of current interest, useful and with the highlighted main points. Description of the product should be not only full of details, which make it unique, but contain words, attracting the person to close the eyes and imagine that he or she is using your product and is satisfied with it. Large, crystal clear pictures or videos can help, but there’s also a copywriting trick to increase desire.

When you are describing better use the current time to have more effect on the user. Feel the difference: "you get" and "you've got." These use of the correct time helps to create the atmosphere of owning the product or service. If you already received it, that is already than you are a product owner.

Thinkgeek source

Look at the ThinkGeek, as an example. The text explains you, how to deal with the product if you have it. To practice this copywriting technique it is better to start a sentence with the word imagine to attract the attention and finish the paragraph by explaining how your reader will feel when owning and using your product.


The online stores ask their customers to score, give marks or write a review on the product or service. Instead of it, you can even offer to give the feedback to the product after the purchase. "How much should this hair dryer cost?" Or more rigid, "For how much would you agree to sell it?"

If the endowment effect works (and if you have a really good product with reasonable price), buyers will be agree to pay even a little more than the actual cost. When you receive a few of these assessments, you need to calculate the average and write close to the product, for example: "This hair dryer is 20$, but buyers evaluate it in 30$".

Here is an example from the Innocent, where they have the scale with the reviews near the product. Share knowledge about product by telling stories of happy customers and explain even the tiniest details. Make an effort not to be boring and create bright unique descriptions. source

Additional Options:

Very often you can meet such a situation: you install a free app and can use it free of charge, but with the exception of some features. These additional features should be payed. It happens not only with the applications, but also with the social networks, software, ect..

On the one hand this product is totally free, but on the other hand to have, for example, a premium version, you need to pay.

This case is also an example of using the endowment effect in e-commerce. Your customer try the product or service, explore it, enjoy it and want to use it further, but with a wider range of the features. You can offer such an option, but for the additional payment. In most of the cases, if the product or service is of a good quality and the features have the reasonable price, then customers are ready to give money without any doubt.

Let’s take the famous social network LinkedIn as an example. You can use approximately all the functions, but in a limited way. Otherwise you need to buy the premium version.

LinkedIn source

Taking into consideration such a tool of influence as the endowment effect you can increase the purchase rates, without any pushing on the leads actions. It would be beneficial both for you and for your customer.

To sum up, let’s reviews the ways, where the endowment effect can be used in the Internet:

  1. The free trials (free product or service for a limited period of time)
  2. Discounts and coupons (permanent opportunity to buy cheaper)
  3. Powerful Content (feeling of owning and experience of happy customers)
  4. Scoring (objective feedback from the customers)
  5. Additional options (premium versions and wider range of functions)

You aways can create your own method, based on an existing one. Just remember to satisfy your customers with good quality product or service and give them a chance to try it.

Alina Shafikova Customer Success Manager

Posted on October 17th, 2016