|
Author: Steven Gillman Article source: http://www.dealslive.com/. Used with author's permission.
More of the findings of the recent studies in behavioral economics:
Webers Law
A change of stimulus is more emotional and motivational, 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.
Familiarity Fallacy
Economic choices are often made due to familiarity, even 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., 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.
The implications are obvious, and are being studied. It 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?
There are reasons people buy that go beyond any of the reasons given. Rationalization seems to rule over rational thought. I'll cover more of the research into behavioral economics in part three. Steve Gillman has been studying every aspect of money for thirty years. You can find more interesting and useful information on his website; http://www.UnusualWaysToMakeMoney.com
Are Your Articles Creating an Avalanche of Traffic?
Are you receiving little traffic from your web articles? Then find out how you can build momentum from your articles and receive an avalanche of traffic.
14 Common Credit Mistakes
Establishing credit and wisely managing your credit becomes easier when you know how. You'll feel empowered by taking knowledgeable steps towards good credit, a...
7 Power Habits to Guarantee Financial Independence
Are you always running short of your funds? Do you still have to borrow money sometimes to at least live comfortably? Do you get to pay your bills on time?
Been There, Done That
Direct Answers - Column for the week of April 12, 2004 Fourteen years ago I was divorced from my second wife, her idea. I'll call her Kay. But I never lost my...
Identifying the Right Venture Capital Firm Partner
Venture capital firms are comprised of individual partners. Identifying the right venture capital firm partner is critical to getting a meeting and a potential ...
Revealed – A Simple Formula For Success! Exceeding Expectations
Customer Delight = Customer Expectation plus 1. This was the simple formula for delighting your customers that Ken Blanchard informed us of in his book "Raving ...
Professional Organizations: Join or Fold?
All of us join professional organizations for a reason--a friend belongs, we need to for credibility, etc. Many times we let years slide by and we don't stop a...
Three Steps to Give Your Strategic Plan Traction
We all agree Strategic Planning is a critical part of a company's success. All too often, however, strategic plans stall before they ever make it to execution -...
Newsletter Formatting
Formatting your text newsletter correctly can make a failure into a success!
The Art of Concentrating by Means of Practical Psychic Exercises (Part 4)
The Art of Concentrating by Means of Practical Psychic Exercises (Part 4)
Whats So Important About The Consumer Reports Treadmill Best Buy?
Consumer Reports grades on an overall score to determine its Best treadmill and also suggests four treadmill Best Buy models that combine good value with qualit...
Those Other Apostles
Ever feel like you are not accomplishing enough with your
life? Consider what it must have been like for some of the
apostles.
Digging To The Root Of Your Problem
Most people have some aspects of themselves that they would like to change. But how often do you dig deeply to find the root of the problem? You have to addres...
How Three Publishing Myths Kill the Author
Agents and publishing houses have their best interests at heart, not the author's. Save yourself from headaches, disappointments, and money down the drain. Beco...
How to Plan Your Wedding and Honeymoon
1. Weddings typically can cost you anywhere around $15,000 or more. The big question is: who foots the bill? The 21st century has heralded a shift in the way th...
A Priceless Birthday Gift
Kelly was a very wealthy Hollywood actress, who was used to a posh lifestyle. She lived in a multimillion dollar home in Beverly Hills. She had all sorts of p...
Cool Snacks for a Hot Summer
Beat the heat with these cool summer treats! Mouse Popsicles It's not what you're thinking! The name refers to the size of the popsicle—not the contents. Wash a...
Get over Being Lazy
Learn how to get over being lazy and find a girlfriend.
Equipment for the Amateur Astronomer – Part 1
Anyone interested in amateur astronomy (rather than armchair astronomy) will need to get some equipment to view the sky with whether that's a simple pair of bin...
Internet Home Based Business - Marketing Yourself on the Web
The phenomenon of the Internet has become a part of our daily lives, so it seems natural to build and internet home based business where you can work from home ...
Get Paid To Autosurf - An Easy Way To Make Money At Home
Auto surfing for cash might not be a glamorous way to make money but get paid to auto surf programmes offer an easy way to make money at home. The day's cash ca...
Sending Mixed Signals Can Send Your Clients Away
Consistency in communication can influence client retention.
Do you want to keep your best clients? Avoid sending mixed signals.
Creating Good Feng Shui in Babys Room
Getting ready for a new baby requires a lot of thought and planning from what diapers the baby will wear down to the decoration and arrangement of baby's room. ...
No Horse is Too Dead to Beat!
For these and many other reasons any horse is worth persistence, persistence and more persistence...
|
Print this page