I recently wrote how winning or losing a customer comes down to how you design for “micro-moments”, those fleeting moments where your customer’s subconscious is making the decision.
The way in which you trigger their behavioural biases can make or break the moment, so to see behavioural techniques at play let’s look at an example from market.
Volume discount on wine
The two ads below are trying to do the same thing – get customers to buy more wine by promoting volume discounts, but that’s where the similarity ends.
On the left Option A “Combined price” promotes the total price paid, so for one bottle $13, $22 for two and $27 for three.
On the right Option B “Averaged price” instead promotes the average for each bottle paid, so $12 each when you buy two, $10 for three and $8 per bottle if you buy six.
Imagine this ad is your responsibility
Which way do you go? How do you know which will be more effective before you commit to printing the catalogue? Can you know? Is there any difference anyway?
This is what I mean by a micro-moment. In business you have to make decisions like this each and every day; decisions that seem small but can have a massive bearing on whether you succeed or fail.
While you might not be selling wine, you are most certainly selling something – an idea, a business case, your services…You have a fraction of a second to convince your customer to do business with you and you better not stuff it up. One of these marketers has. Which one?
But before we get to that, let me go back to the central question.
How can you know before it happens?
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Behavioural economics: It’s a veritable playbook on how behaviour is influenced and gives anyone in business a massive advantage. You can reduce your costs by gaining efficiencies in taking things to market and at the same time increase your revenue by maximising conversion effectiveness.
Which ad used behavioural techniques more effectively and why?
Option B “Averaged price” that promotes the average per bottle has more effectively used behavioural techniques. Here’s why:
- When people buy wine they are use to the cost per bottle. If I’m used to paying $12 a bottle then $8 is going to seem like a good deal. Option A “Combined price” on the other hand requires the customer to do some mental recalibration to work back to the average to know whether $27 is good value or not. Whatever you do, do not make your customer have to think hard about how great the deal is.
- Option A sequences the prices in ascending order so even though the cost per bottle and savings become more advantageous, all the customer sees is that $27 is a lot more than $13.
- Option B in contrast sequences the price per bottle in descending order so that $8 seems cheap compared with $12.
Relativity and Anchoring are two of the behavioural principles underpinning these ads. In essence, the way in which you sequence and contextualise prices matters a great deal and can make or break a micro-moment.
Next time you are browsing through a catalogue or website think about how you are reacting to the price. How has it been contextualised and has it worked?
For more on behavioural economics and how you can make your business better I encourage you to get in touch. You don’t have a moment to lose.
Bri Williams runs People Patterns Pty Ltd, a consultancy specialising in the application of behavioural economics to everyday business issues such as financial decision-making, website conversions, marketing effectiveness and change management.