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Tuesday
Jun242008

What Makes People Buy?

231239-1668103-thumbnail.jpgI found this at NonToxin.com - "if you like reading what Britney Spears did today, please go away, this site is not for you". It's a very interesting lesson in behavioural psychology - or What Makes people Buy? Check this out -

The Economist magazine gives the following pricing options to people who want to subscribe:

* Website-only subscription: $59.00 per year.

* Print-only subscription: $125.00 per year.

* Print & web: $125.00 per year.

David Airey, a behavioural economist himself is confused: why would The Economist offer the same price for print-only subscription as well as for print & web subscription? It didn’t make sense to him.

So David started investigating and found out why The Economist gave the 2nd print-only option that they knew no one would go for.

He gathered 2 groups of 100 students each and asked them to subscribe to The Economist. To the first group, he made the same offer that the Economist makes. And the results of what people chose are:

* Website-only subscription: 16

* Print-only subscription: 0

* Print & web: 84

For the 2nd group, David removes the 2nd print-only pricing option. The results this time are:

* Website-only subscription: 68

* Print & web: 32

The Economist gives the 2nd pricing option that they know no one will buy because it increases the number of sales their higher priced 3rd option gets!

Action Summary:

* People don’t make decisions in a vacuum. They make them by comparing various factors with each other.

* People pick an anchor and base their final conclusion near and in comparison to that anchor. So make sure that the answer you want is close to the anchor point.

* To persuade people, change their frame of mind by giving them a different anchor point. And they’ll decide in your favour.

There's also another interesting story on that site about an art gallery having trouble selling a $25,000 painting. Until they hung a similar but much larger painting next to it and priced at $40,000. The smaller painting sold within days.

Hmmm...how can I use this information? Hey maybe I should be trying to sell my paintings online? That's one of them up top. Yeah you can give me $25k for it if you like. How about $1500? Gouache on watercolour paper.

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Reader Comments (2)

...please where can I buy a unicorn?
November 22, 2009 | Unregistered CommenterFormeneouptump
...please where can I buy a unicorn?
November 23, 2009 | Unregistered CommenterFormeneouptump

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