Preview Mode Links will not work in preview mode

The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Jan 24, 2020

This show is all about how to stack products and services to make them the most appealing to your potential customers. Those of you who've heard me speak, have heard me talk about this before (especially in relation to The Truth About Pricing) and the concepts of anchoring, adjustment, and relativity. I share examples of how certain numbers can get stuck in our subconscious and in comparison to the real price, we feel that we are getting a bargain. 

I also talk about how infomercials use several combined behavioral economics techniques in their presentations. To show how I practice what I preach, you’ll learn about the pricing strategies for the new BE Thoughtful Revolution Membership group. I also give you an actionable example of how you can increase your prices by 10% and feel great about it. As always, this episode is packed with real world information and examples that correlate with behavioral principles you can use in your life and business.  

I've had listeners asking about a membership group for a while now, and the BE Thoughtful Revolution Membership Group is now open. I’m so excited about this membership and all of the benefits it has to offer. 

Members get direct access to me for all of your behavioral economics questions in our dedicated Facebook Community. This is where I'll be doing live Q&As, training, and all sorts of other stuff.  

You’ll also get access to The Brainy Courses. The Brainy Mindset Course and Brainy Pricing Course are $399 each. (That’s a combined value of $800.) You’ll also get exclusive content from The Brainy Business, and members get special discounts on workshops, products, and strategy sessions and will be the first to know when new stuff is coming out.

The membership is $99 a month, but the first 50 people to sign up with code LAUNCH get 60% off and will only pay $39 a month. Lock in that price before it’s gone!


Show Notes:

  • [05:36] Stacking and bundling products and services. Anchoring, adjustment, and relativity are the real concepts at play in this process.
  • [06:43] Anchoring and adjustment is about our brains being swayed by numbers.
  • [07:11] The Snickers study I share all the time is part of this concept of anchoring. 
  • [07:28] The brain latches onto the number and will move up or down from there.
  • [08:15] When an item is limited, people will actually buy more. This is all because of anchoring, and even unrelated numbers can have an impact on this.
  • [09:03] If you throw in a larger number in your description, it makes the price seem smaller.
  • [09:43] The brain kind of glosses over what it hears at any given time because there is a lot going on, but it hears a number and latches onto it for a while.
  • [10:01] Think of these concepts in examples of infomercials. Your brain likely didn’t have any preset number for what it thought that random item was worth or what you would pay for it.
  • [12:26] If you ever discount something, or offer a special, make sure you talk about the higher number first.
  • [12:47] When I introduced the group, I talked about the benefits to you first, like “people have been asking for it” which is a combination of herding and priming.
  • [13:08] I mentioned you would get access to the Brainy Mindset Course and Brainy Pricing Course, which are both $399 for a combined value of $800.
  • [14:01] After sharing the value just in the courses being at $800, I shared the regular rate of the group, which is just 99 a month. And THEN I said that the first 50 people could use a code to claim their spot at only $39 a month. (That order was intentional, and it matters)
  • [14:38] You need to spell it out to people in the right order - and know that saying things are “priceless” doesn’t help your anchoring case.
  • [15:21] Instead of saying something is priceless, find a way to quantify that value.
  • [16:09] Relativity is where the second number feels lower or higher based on how it compares relative to the first number.
  • [17:16] The way numbers are shared via framing, relativity and anchoring make all the difference in how the customer reacts. 
  • [17:36] When you have multiple options available and want to showcase one of them. You don't want to show the least expensive thing first and work your way up. Always start big and work your way down.
  • [18:36] Find the best product that you want to sell and has the most value for clients. Create a high anchor to present before that. Add 10% to the amount that you're going to charge.
  • [25:17] You could also create a totally different third product. You don't have to though.
  • [26:29] You can use the third option when you are selling physical objects like sofas. 
  • [28:18] This can make the best option seem like the obvious best choice. It helps customers to feel good about the investment. 
  • [29:29] The context and relativity all matters and makes a difference. It takes a little work on the front end to make sure you are presenting the options in the right order to help the customer make their best choice.
  • [30:38] Bundles are great tools and can be oh so useful. Often, bundles are provided with a discount and that is prônant where your mind goes first, but it isn’t required.
  • [31:29] If you make it easy for a customer to find everything they need with one or two clicks, you can charge a premium for that.  Convenience has value.
  • [33:47] “We offer three courses, the first one is $500 and it is on XYZ, there is also a $600 course on ABC and an $800 course on being awesome. Which would you like to start with?” In that case, you are leading them to the $500 course, because it became the anchor.
  • [36:26] If you want the bundle to be the best choice and a clear best offer, you can have a discount included. Start by defining the main thing and build everything around making that look as good as possible.
  • [36:55] The way you talk about it, the framing, shifts based on what you want to showcase and what most people should pick.
  • [37:52] You can build your offering to be anything you want it to be and if you understand the value and can properly communicate it, you will find people to buy what you are selling.

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. 

Join the BE Thoughtful Revolution Membership today! Use code LAUNCH to save $60 a month

Links and Resources: