Endowment Effect - Sherwette

To persuade, ask, don’t tell

Cognitive Bias Consumer Behavior Sales skills October 25, 2019

—

To persuade” could be one of the hardest things you can come across. I have been there. Multiple times. Every single day if you ask me.

Having a sound and logical arguments may work with some people, especially engineers and programmers, but at the end of the day, we are human. Humans are emotional, and whether you can do a good job hiding it or not, your emotions have an unneglectable impact on your decisions.

I have mentioned before the “endowment effect”. It’s such a powerful cognitive bias, and because it’s so powerful, you can use it in multiple ways.

The endowment effect basically says,
“We place greater value on items because we own them.” – Adam Ferrier, The Advertising Effect: How to Change Behaviour

Previously, I have demonstrated how you can use the best of the endowment effect before consumers buy your product so that they feel they own it, value it even more, then take out their credit cards.

—

But…

What if all you want is to persuade someone to buy into your idea?

Are you an impulsive shopper? Wash your hands

Cognitive Bias Consumer Behavior Spending money October 22, 2019

Do you know an impulsive shopper? Ask them to wash their hands

Anyone one of us could be an impulsive shopper.

You could be having a bad day. Then find yourself at the mall, doing some retail therapy, and buying tons of things you don’t need. Perhaps even buy one item; however, that one item is so damn expensive.

You are always one moment away from making yet another impulsive shopper decision.
One of the key factors that influences you, as a consumer, to buy is the endowment effect.

The endowment effect basically says, “We place greater value on items because we own them.”
Adam Ferrier, The Advertising Effect: How to Change Behaviour

What the IKEA effect can teach us about employee engagement

Cognitive Bias Consumer Behavior October 14, 2019 2 Comments

The IKEA effect?

What is that all about?

In some countries, or particularly in the west, IKEA is known as one of the cheapest options to buy furniture. This is not the case in the Middle East though.

And even though it’s known as one of the cheapest places to buy furniture, once you actually buy that piece of furniture, it’s very hard to let go of it.

It’s very hard to let go. You want to take it with you whenever and wherever you move. From one apartment to the next, you pack it and unpack it.

You do that because you have fallen for that IKEA piece of furniture. You have fallen for it even if it was so simple, even if it was so basic, even if all your friends have the same exact one, but perhaps in a different color.

You have fallen for it because IKEA made the best of what is called the “endowment effect”.