Mindset

The Bonus Effect

The Bonus Effect
Cody
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Cody

Creator at Fly to FI
Cody is a 22-year-old entrepreneur, life optimizer, and creator of Fly to FI. He is a personal finance junkie who constantly tracks his net worth with Personal Capital.

In his spare time, he enjoys exploring the globe for FREE using a technique called travel hacking!
Cody
Hit me up!

One of the most genius marketing tactics is what I call The Bonus Effect. It’s so simple, yet so powerful. However, like everything good, there is a dark side. The Bonus Effect can trick the mind into a “good deal” and eradicate guilt in the blink of an eye. Have you experienced The Bonus Effect?

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What is The Bonus Effect?

The Bonus Effect is when an insignificant, yet oddly satisfying “bonus” is offered to sweeten a product or service. Still unsure about what it is exactly? I’ll provide an example I saw from last week.

The advertisement read “$99 sunset dinner cruise, FREE wine included“. Free wine?! Are you kidding me? What kind of fool would fall for that gimmick?

Or how about the TV commercials: “Order X now and receive Y and Z absolutely free!” or “For only $19.95, you can have this amazing product delivered to your door. Just pay $100 in shipping and handling (written in size 8 font).”

It’s easier than you think to fall for these marketing ploys. After a few moments of thought on the matter, I realized that I had been this fool before!

Back in January, I flew over to Australia. Although my plane ticket cost a few hundred dollars (heavily discounted with travel rewards), I was amazed at all the “FREE” food and alcohol provided during the flight!

The same thing happened to me with an Airbnb I stayed in several weeks ago. After I paid and arranged my booking, the host welcomed us with free snacks upon arrival and free breakfast the next morning!

The Bonus Effect is so incredibly powerful as a marketing tool, but why does it work?

Expectations

The Bonus Effect’s efficacy relies on outperforming expectations.

The freebies on my flight and during my Airbnb stay were so remarkable because I did not expect them. If these “bonuses” were standard, I would not have thought twice about them.

The Bonus Effect tactic works across so many different avenues. When you’re at a restaurant, you’d never expect a free drink. So if the waiter came over with a pint of “free” beer after you’d ordered your $20 meal, you’d be ecstatic!

From the seller’s perspective, understanding the customer’s expectations is key. Once that benchmark is understood, the seller only needs to surpass it ever so slightly to achieve extraordinary customer satisfaction.

As a buyer, make sure to understand the value behind every purchase. If you’re going to choose the more expensive option, recognize why. I’m not saying to always choose the cheapest option, but instead to base your decision on value.

Understanding your benchmarks and expectations are crucial to making informed, value-based decisions.

Final Thoughts

The Bonus Effect isn’t necessarily bad, it’s just something to be aware of.

Being quite honest, receiving a “free” bonus feels great! … even though you already paid for it.

As a consumer, I’ve noticed the immense power of the Bonus Effect. Consequently, I plan to implement this strategy in my businesses and see how it goes! Follow along and stay updated 🙂

Have you experienced the Bonus Effect? Share your stories in the comments below!


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Note: I am not a financial advisor or fiduciary. All the information presented in this article reflects my opinion. I am not liable for any financial losses incurred related to this content. My content is always written with the readers’ best interests in mind. I believe that my content is helpful and well-researched, but it is not professional financial advice. For more information, read our Privacy Policy.

6 thoughts on “The Bonus Effect

  1. I thought you were going to talk about on TV commercials where they say something costs $19.99 and then say “but wait….. there’s MORE! If you order now we’ll throw in a free ____, you just pay shipping handling“. ?

  2. It’s the TV commercials that crack me up everytime. This blender was created by 2 Chinese scientists with an ancient knowledge that lead to all knew groundbreaking technology… For the small price of $499, this technology can be yours!

    But wait, order now and we’ll throw in 2 more blenders for Free. That’s over $1000 in savings LOL!

    1. Haha! It’s so true it hurts. Really makes you worry about the rest of the population since that seems to be a viable marketing strategy.

      Or the $100 T-shirt marked down from $500… that’s an 80% savings! It all comes down to value.

  3. Awesome post! I’m going to think about how to implement this with my real estate investments in the future. In most cases it’s just a matter of selling them with knowing as little of the benefits of the product as possible so you can reveal the rest of the benefits that were already planned after the sale to wow them. An example of this for tenants could be complimentary snow removal in the wintertime that they only find out about when you arrive on that snowy day when they really needed the help.

    1. Hey Philip! Thanks for stopping by. I think you could certainly implement the Bonus Effect with your real estate investments. It’s really all about exceeding expectations. With your snow removal example, that’s an awesome way to go above and beyond the benchmark. This one little thing that costs a negligible amount of money for you could have a massive, positive emotional impact on the tenant. Maybe next month they won’t be late on rent since they respect and appreciate you even more now. Awesome stuff!

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