A new study by researchers from Singapore and Yale revealed a pricing surprise: if two similar items were priced the same, subjects were much less likely to buy one than if their prices were slightly different!
A tiny price difference seems to make the similar products more alike, and increases the probability that a decision will be made and not deferred.
In one experiment, the researchers presented two groups of subjects with a choice. They gave all subjects a dollar with the option to buy gum or keep the money. Two similar types of gum were offered. One group saw both gum options priced at 63 cents, while the other saw one gum priced at 62 cents and the other at 64. This trivial difference caused 77% of the second group to buy vs. just 46% for the first group – a 67% boost!
In retail settings, similar products may be offered at the same price. But, rather than simplifying the choice for the consumer, doing so may actually increase the probability that the consumer will buy nothing at all.
Certain principles are shown to drive positive consumer responses in the brain. Here’s a healthy handful of Neuro nudges that Roger Dooley shared with the crowd of around 250 at Mima:
- Liking – Establishing affinity with your customer is a sure-fire way to get them to like you. If your customers have dogs, consider pictures of happy people at your company with dogs.
- Setting Expectations – People enjoy a product more if they’re given a realistic expectation of what their experience will contain. Set lofty, yet realistic expectations for people and they’ll likely enjoy your product more.
- Fairness – Roger asked two audience members to make a deal to split $10. He pointed out that the fairness of the deal carried a lot of weight with each participant, and that socializing before making a deal increases the fairness. Tip: if you’re negotiating business, go out to dinner first and then talk business.
- Doppelgänger Effect – One of the best ways to get someone to buy something is to help them envision themselves using the product. Roger used the example of taking an opt-in social profile picture and inserting it into a dynamic ad. Mirror neurons vicariously enjoy what they see, and nudge your brain to purchase what it sees as possible.
- Rudeness – Just like in real life, rudeness sparks revenge. As we’ve seen from countless brands, a quick and sincere apology is often all it takes to insulate a brand against social backlashes.
- Scarcity – People are more likely to act if they think a deal won’t be available in the future. Scarcity drives conversion — limited quantities, time frames or offers all induce the scarcity effect.
- Gender – Men think more short term and grow impatient when shown a picture of an attractive woman. They also show riskier behavior. These “mating triggers” can be very effective on men but not so much with women.
- Cognitive Fluency – This means that you associate difficulty of tasks with the difficulty of the instructions. Make your fonts and explanations simple of you’re asking for a simple action from your customers. Conversely, use a more complex font if you have an expensive or complex product to convey higher value and/or importance.