Jim to the service representative, “My phone‘s display is fully cracked and not working now. Can you replace it?’
Service Representative, “Sure, Sir. We have to diagnose the problem first -Understand whether the problem is due to display or something else?. It would cost Rs.1500 for diagnosis. Then we would send you a quote for the part to be replaced. Once you pay the part’s cost, we will fix it.”
Jim, “Ok. I agree”.
Jim paid Rs.1500.
The next day, he received a quote for Rs.13,200 for the new display. He paid the money online.
After a couple of days, he received a mail that his phone is ready. Jim went to the service centre to collect the phone.
While collecting the phone, service representative to Jim
“Sir, Don’t you need temper glass over the phone display. A good temper glass will protect your screen from potential cracks. Otherwise, your investment will go waste. Also, you had mentioned earlier that you need the phone charging cable. We have both of them in combo offer”.
Jim, “Oh. That sounds good. How much is it?”
“Sir, the temper glass costs around Rs.2100 and the price of the branded charging cable is Rs.1700. But you will get both in the combo price of Rs.2300. It means -if you buy a Temper glass for Rs.2100, you will be getting the charging cable for an additional price of just Rs.200.”
Jim thought for a minute -He has already spent approximately Rs.15000 for the display. Compared to that amount, Rs.2300 appeared small and so, he told the representative to make a bill.
Jim bought the Temper Glass and the Charging cable.
After a couple of minutes, the service personal again asked Jim
“Sir, don’t you need the phone case? It will protect the screen and the phone body from potential drops. You already know how slippery is this phone’s external surface.”
“Ok. How much it will cost?”
Jim thought to himself, “I have already spent Rs.17000 on repairing this phone. Compared to 17000, 1800 is again a small incremental addition. It would be better to buy this case.”
He okayed the purchase.
While leaving, Jim looked at the bills he paid. “How come I have spent around Rs.20000 for repairing this phone?” He contemplated.
At that time, he remembered an example from Robert Cialdini’s book ‘Influence’.
- A man enters a store and informs the salesman that he intends to buy a three-piece suit and a sweater. What would the salesman show him first to make him likely to spend the most money? Clothing stores have instructed their salespersons to sell the costly item first. Why? Suits are expensive. Once the consumer had bought a suit, the price of a sweater, even an expensive one will seem smaller in comparison to the suit. For a $695 suit, a $95 sweater does not seem expensive. Once the customer has bought a suit, the salesman will show him the sweater. Once the sweater was chosen, the salesman will show him the shirts. Once the shirt was chosen, the salesman will show him the shoes. Once shoes were chosen, the salesman will show belts to the customer — In the order of decreasing price.
Sales Motivation Analysts Whitney, Hubin and Murphy say, “The interesting thing is that even when a man enters a clothing store with the express purpose of purchasing a suit, he will almost always pay more for whatever accessories he buys if he buys them after the suit purchase than before”.
Cialdini also mentions the example of Automobile dealers -The car salesman will wait till the price of a new car has been negotiated and then he will proceed to suggest accessories one by one. Compared to the car’s price of Thirteen lakhs, a thirty thousand stereo will appear a nominal cost. Once he sold you the car and another expensive stereo, the salesman would continue to sell you the seat covers, tinted windows, mat etc.. one by one. With incremental additions, the salesman would have taken the customer for a ride.
Why does it work? Dan Ariely writes, “It works because humans cannot choose in absolute terms. We have to compare one thing with another. We don’t understand the value of the 6-cylinder engine without comparing it with a 4-cylinder engine”.
Robert Cialdini calls this a ‘Contrast Principle’ -It is the way we see the difference between two things that are presented one after another.
He adds “One of the problems with this principle is -If the second item is fairly different from the first, we will tend to see it as more different than it actually is”. For Example -If we lift a light object first and then lift a heavy object, we will estimate the second object to be heavier than if we had lifted it without first trying the light one.
So, your success in selling your product is dependent on your ability to influence the comparative product. The above examples showed how sellers used ‘contrast principle’ in influencing consumers to compare the product price with the recently purchased expensive item.
So, one of the tricks to selling your product is
- To break down your product or service offerings into individual components(If possible) with one component being highly expensive than other components -Similar to Suit & accessories or Similar to Phone & accessories in Jim’s case.
- Then, as we have seen earlier, it is much more profitable to present the expensive item first and sell the extras or other components independently of one another, so that each small price will seem petty when compared to the already-determined much larger one.
- Importantly, it should appear that the additional products are sold at a deep discount.
**Facing problems in business? For suggestions, mail to firstname.lastname@example.org.**