How Sellers Manipulate Consumers
August 19, 2012
The Atlantic has also taken note of the study from the Journal of Marketing which revealed how weak consumers are in the face of math, specifically when considering a choice between paying less or getting more. The Atlantic’s Derek Thompson goes beyond that quandary to look at ten more vulnerabilities sellers exploit in “The 11 Ways that Consumers are Hopeless at Math.” Basically, consumers are easy to manipulate because most of us don’t know what anything is truly worth.
I recommend reading the article to fleece-proof yourself. A few points that stood out to me: Stores know that everything is relative; if you pass a wickedly overpriced handbag, you are more likely to go for the only wildly overpriced watch you spot next. Also, when faced with three choices of a similar product, consumers usually opt for the middle one whether it is really the best deal or not. On top of it all, we still fall for prices that end in the number 9. My favorite passage regards the power of emotion to direct purchasing decisions:
“In a brilliant experiment from Poundstone’s book, volunteers are offered a certain number of dollars out of $10. Offers seen as ‘unfair’ ($1, let’s say) activated the insula cortex, ‘which is otherwise triggered by pain and foul odors.’ When we feel like we’re being ripped off, we literally feel disgusted — even when it’s a good deal. Poundstone equates this to the minibar experience. It’s late, you’re hungry, there’s a Snickers right there, but you’re so turned off by the price, that you starve yourself to avoid the feeling of being ripped off. The flip-side is that bargains literally make us feel good about ourselves. Even the most useless junk in the world is appealing if the price feels like a steal.”
Yes, and so online pricing has become a veritable playground for clever folks. Now about the fees charged for online search services. . . .
Cynthia Murrell, August 19, 2012