by Dan Ariely
MIT professor Dan Ariely proves in his book, "Predictably Irrational", just how irrational, yet predictable, consumer behavior is.
Among the wealth of information provided in this entertaining book, I loved the practical applications that can be uniquely applied to business in the interest of making more money.
For example, do you know why "30-Day Money Back Guarantees" work so well?" While you may think, "well it's because they (consumers) must be truly happy with a product or they'd return it." Right? Not so much.
In an experiment of college kids, Ariely proved that college kids were more willing to keep their concert tickets versus selling them at a huge gain. Conversely, he found that other students would rather not pay the amount of money the other students refused to sell their tickets for. In other words, once a consumer feels they own something, the value of that item tends to far exceed the amount it's actually worth to other people.
This easily explains why it can be so hard to break up with an abusive ex or sell a worthless dust collecting widget we never use.
How about the power of "free?"
This experiment really resonated with me as I personally witnessed the dominant power of the word "free" over anything else, including "One dollar."
We ran two offers in the Spring of 2012. One offer was for a Month of SEO for One Dollar. The second offer was a Free Month of SEO.
The results baffled me!
While the first offer ($1) turned up zero leads, the second offer (free) turned up over 18! How was the power of one dollar versus free so strong? It's one freaking dollar! Well, according to Ariely, it wasn't.
The bottom line is, unless you're going to give something away for free, don't even try to attempt any time of low risk, high reward offer. Why? Read the book!
The bottom line is, if you're looking to influence consumer behavior with any type of unique offer, read this book first.
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