Recently I had the chance to look at some research done by Carnegie Mellon university.
What they were looking at was how making a purchase affects your brain.
As it turns out, what they discovered was quite interesting.
However, before I reveal their findings to you first let me ask you something.
Have you ever saw something that you wanted in the store and just felt like, hey I want that?
And because you made that decision to get it, you started to put money to the side so that you could eventually purchase the item.
Soon, a few weeks go buy and what do you know, you now have the money to buy it. Yippeeeeee!
But before you can make it down to the store, something else pops up and needs to be taken care of immediately.
It’s something you didn’t expect, but you know that it needs to get taken care of.
So now the purchase that you were looking so forward to making, will have to take a back seat.
When that happens, have you ever noticed how you feel?
There is pain that is associated with it.
That feeling of pain can also be felt when you are about to make a purchase.
What the researchers at Carnegie Mellon university discovered was that when you are about to buy something, the pain centers in your brain can start lighting up.
When subjects were presented with cash and given items that they could purchase with that cash they noticed something quite interesting.
That purchasing can cause pain as I just stated, but also it was relative to the context of the purchase.
Ok, what that means is that people will experience pain when they have to part with their hard earned money based on what situation they are in when they have to give up that money.
So for example.
Let’s say that you are buying a car.
You know how much the car will cost and that is fine with you.
So the salesman then says that he will throw in a pair of chrome rims for just $100 extra.
In the context of that purchase, paying an extra hundred dollars will not trigger your pain center in your brain.
You have a relative idea of how much the rims would cost if you had to purchase them separately. No issue there.
But now let’s compare that to another situation in which you might experience some pain.
Imagine that you are standing at a vending machine.
That favorite chocolate treat known as the kit-kat is staring you right in the face.
And what’s the price of this little piece of chocolate heaven…just .75
You pop in three quarters and hit Q7.
The spindle starts to turn and then its stops.
But no candy. Ughhhhhh.
The machine now has your .75 cents and you are pissed.
In this situation, your purchase has caused you to feel pain. Even though it’s only .75
It’s the context baby, the context.
So how do you get rid of the pain?
In one simple word you can minimize the pain your potential customers may feel by bundling your products or services together.
Bundling allows them to justify the price by spreading it out over multiple items.
In the example I used earlier about the car, you will naturally spread the price out over the multiple items the car comes with. Like leather seats, sunroof, bluetooth etc. You have an idea of what those items may cost so you will include that in the cost of the car when you are looking at the price.
How can you use this information in your business?
The biggest takeaway you can have from this information is that you need to maximize your pricing and minimize the pain of paying.
Your pricing has to be seen as being fair.
If however your price is seen as being more expensive then the others then you will need to explain why it is expensive.
Give them more detail.