by Steve Gillman
More of the findings of the recent studies in behavioral Webers Law A change of stimulus is more emotional and motivational, Familiarity Fallacy Economic choices are often made due to familiarity, even
economics:
according to the base: Most subjects tested would drive
across town to save $10 on a $20 item, for example, but not
to save $10 on a $500 item. The lesson for sales people? If
you won't lose a sale on a thousand-dollar couch over $10,
sell the other benefits of the couch in your sales pitch.
when the choice is clearly worse ("But I always shop
there!"). This bit of research shows the need to get a
customer used to coming to your business. If they are
comfortable, they won't expect or demand the best deal.
Anchoring In tests, mentioning the year 220 A.D., versus 1600 A.D., The implications are obvious, and are being studied. It There are reasons people buy that go beyond any of the About the Author
Steve Gillman has been studying every aspect of money for
resulted in earlier guesses when people were asked for the
birth date of Ghengis Khan. This was true even when the
comment was in no way related to Khan. This tendency to
"anchor" was found in the economic realm as well. Mention
$300 as the value of an item, and subsequent negotiation or
discussion will revolve around that.
seems an item should be worth a certain amount to a
particular customer, but humans are never so logical in
valuing things. Why can you get $99 for an e-book online
that has roughly the same content as a $10 book in the
bookstore? Is it partly due to the "$500 value" thrown out
there for the book and "bonuses." It makes $99 seem cheap,
doesn't it?
reasons given. Rationalization seems to rule over rational
thought. I'll cover more of the research into behavioral
economics in part three.
thirty years. You can find more interesting and useful
information on his website;
http://www.UnusualWaysToMakeMoney.com