The Unconscious Shopper: Part 1
Wednesday, April 13th, 2016
If you’ve spent any time around market research, you know how often people say one thing, but do another.There are many quirks of the brain that influence this behavior – biases and heuristics and the limits of memory.In this new series of posts, we will showcase examples of how human psychology and behavior affect the way we shop.
Topic #1: Framing
The Framing effect states that people will react differently to a particular choice depending on how it’s “framed up”: what it’s compared to and how it’s compared. Here’s an example most of us are familiar with: gasoline sales.
Scenario 1: Imagine you go to the gas station to fill up your car and see on the big sign that the price of a gallon of regular is $1.50. You pull in and slide your credit card, and then you notice the price per gallon on the pump display reads $1.60 per gallon. Confused, you look back at the station pricing sign and see the fine print: prices are for cash only. If you are like most people, you’re annoyed and feel deceived.
Scenario 2: This time when you pull up, the big sign at the gas station says $1.60 per gallon. At the pump, the sign says there’s a 10 cent per gallon discount if you pay with cash. You’ll probably just pay the $1.60 per gallon with your credit card and figure the 10 cent discount isn’t worth the hassle of going in to the store to pay with cash. And you’ll feel fine about it.
Why is this? Well, it’s because of the Framing Effect. People will react differently to a particular choice depending on how it is presented. In this example, people are angered in the first scenario when they feel as if they are being tricked by the big sign and penalized for paying with a credit card. But they are happy to pay the extra 10 cents in scenario two, which frames the credit card price as the standard price and the cash price as a discount.
So even though the cost to them is exactly the same in both scenarios (and their behavior is the same), they feel very different about the options depending on how they’re framed.
Marketers should use the Framing Effect to create choices that position your option as the best one.
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