Making something free changes behaviour. But not always in the way we expect.
Over the past year, the Victorian State Government made two notable services free:
- Camping in State and National Parks (as cost-of-living relief)
- Public transport (in response to fuel pressures)
The outcomes couldnāt have been more different.
- Free camping sites were snapped up almost instantly. But with no financial commitment, a large number of people simply didnāt show up.
- Meanwhile, free public transport has driven a surge in usage, bringing thousands of new commuters into the system.
Same pricing strategy. Very different behavioural outcomes.
Why?
Itās a clear illustration of my DecisionāAction Conversion rule.
Decisions have two components:
-
The degree of commitment (tightly or loosely bound)
When something is free, it immediately lowers commitment. And when commitment is low, the likelihood of no-shows increases.
- Thatās acceptable in the case of public transport, because thereās no real impact on other commuters.
- But for campgrounds, a no-show is frustrating for people who werenāt able to secure a booking.
Had there been a no-show fee, the decision would have shifted from loosely bound to more tightly bound.
2. The time between the decision and action (long-tail or short-tail)
The longer the gap between decision and action, the less likely the action is to occur.
Motivation fades. Circumstances change.
- With public transport, the decision to travel is usually made close to the moment of action (short-tail).
- With campsite bookings, there can be weeks or months between the decision to go and actually going (long-tail).
So, does free change behaviour? Yes.
Does it change behaviour in the way you want?
That depends on how you create commitment without relying on price, and how much time you allow for that commitment to unravel!
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