|Classical and neoclassical economic theories tend to assume an efficient marketplace and individuals who make rational choices based on their economic best interests, which is all well and good, but doesn’t explain why real people make the decisions they do. Behavioral economics explains why we do all the things that classical economics indicates we shouldn’t. To find out what on earth this has to do with promos and why there’s an image of a bank here, read on…|
Promotional products are a perfect example of behavioral economics in action. While classical economics would dictate that the act of giving away an inexpensive item would elicit a response from the recipient of equal (and relatively negligible) value. Anyone who’s had success with promotional products knows that a well-done promo can elicit a much more valuable response, and in turn, a large ROI. Why? Partially because everybody loves free stuff, and this positive reaction towards your brand causes people to react in a disproportionate way, like buying your product or service.The bank that’s pictured was part of a program in the Philippines called SEED (Save, Earn, Enjoy Deposits) that was used to help people save money. According to one of the projects creators, part of the success came from the fact that the bank was cute and “In the Philippines, they like ‘cute’ stuff.” While classical economists would say that people would save money on their own based on the inherent benefits of doing so, a custom piggy bank made a huge difference in savings based on factors that were totally irrelevant to the actual value of having savings.In summary, promotional products work because we aren’t cold, calculating robots transacting only for our personal financial benefit. We’re actually suckers for free stuff, especially if it’s cute.