Now that you have clicked on the article because of a flashy title, there’s more to it. Why would you not? The answer lies 3 stories away. I promise at the end, you will find out why (there’s a video).
In 1916, on Coney Island, a Polish immigrant set up a new hotdog food stall with his wife’s old recipe. He undercut the competition by pricing it at 5 cents (others sold at 10 cents).
Visitors thought the half-priced hotdogs to be inferior. If it’s cheap, there must be something wrong with it.
Solution: He offered free root beer & pickles.
Result: Adverse effect. The belief cemented. How can he sell cheap & manage to give freebies?
Then he tried something else.
An irrational solution: He recruited doctors from a nearby hospital to stand by his shop and eat his hotdogs while wearing white coats and holding stethoscopes.
Why? The visitors thought if doctors are having it, then the food has to be good. Because doctors don’t have inferior stuff.
No prizes for guessing the idea worked and the outlet was known as Nathan Famous Hotdogs
Dan Ariely and his team performed a placebo experiment. They recruited 82 people and administered them with light electric shock enough to infuse a mild headache.
Then they were divided into two groups:
One group was given a brochure showing a new, effective pain-killer worth $2.5.
The other group was given a brochure showing the same medicine but was marked down to 10 cents.
85% of them experienced a reduction in pain who took $2.5
Only 60% of the people in the second group experienced a reduction who took 10 cents placebo.
Story #3 One More Please…
Ohio State University released a $15 all season pass for theatre aficionados to come and enjoy the Broadway-style play.
Experiment: They randomly distributed 1 out of 3 passes to a few people.
One-third received regular full-priced tickets at $15
One-third received a $2 discount on their tickets
One-third received a $7 discount on their tickets
All pass-holders had access to better seats for viewing
Those who paid full price attended significantly more shows than ones with $2 or $7 discount.
The ones who paid full amount perceived with each show they attended they were recouping a part of their initial investment.
While the discounted amount didn’t matter. Regardless, they considered the tickets and production inferior.
What’s the matter?
The above stories are shared from Ori Brafman and Rom Brafman’s book Sway.
The underlying concept is Value Attribution. It is a mental shortcut our brain uses to determine what’s worthy of our attention.
When we encounter people, objects, news the value we assign further shapes our perception of it.
In story #1, people assigned inferior value to Nathan’s hotdogs because of his 50% discount. Attention gained, yes, but perception assigned- Inferior. He solved the problem by altering perception- getting doctors to eat it.
In story #2, the value of relief is attributed more to the $2.5 pain-killer than a discounted one that costs only 10 cents.
Remember Nano? Remember Big Bazaar’s India’s Sasta Bazaar? I think they have all learned their lessons in value attribution.
Back To Address The ClickBaity Headline: Watch this video where none believed they’d watch Ed Sheeran at $2