Selling: The Power of Perspective

In this article, Dan Ariely, and his team of behavior economists (at MIT), conduct a study which was run like this; students had to pick 1 of three different options and their options were about consuming media:

• Digital only: $59
• Print only: $125
• Digital + Print: $125

84% of the students picked the bundle rather than the 16% who just picked the digital, and no one picking the print only, because if you’re going to pay 125 then you may as well get the bundle. The second part of this experiment was when they took away the bundle (middle) option and presented the options to a different group. This time the

results showed that 68% of the people picking the digital only and 32% opting for the bundle. It’s interested to note that when taking an option out, that no one opted for anyway, changed the results to such an extreme measure, how can this be?

Well, the answer the research team came up with was that the subjects didn’t know the value of the print so why would they spend so much more money on that thing? Even though they didn’t choose the print only option they still used it as a reference to the other options which helped them make the bundle decision. Their conclusion: “This study perfectly showcases relativity, a main concept of behavioral economics. Relativity is about context–essentially; our brains can’t value one-off items. The value of each option is considered based on the other choices nearby. And, because our brains are busy and lazy, when a choice is removed it is out of sight out of mind.”

Secondly, they presented 3 ideas to implement because of what they learned from this experiment which are; know your best offer, understand your comparison points, and create a decoy.

The most interesting is the last idea of creating a decoy. I’m not sure what they mean by this point, but I can assume that they would create an option that is farfetched to make other option seems reasonable. Whether this is ethical or not I’m not sure, regardless it is still interesting how people are swayed when presented with option to put the deals into perspective especially those no one will ever choose.

https://www.inc.com/melina-palmer/this-simple-framework-can-help-you-sell-more-of-anything.html