Endowment effectin inbound marketing

WHERE DID IT COME FROM?

The experiment was hold by three scientists: professor

Richard Thaler,Jack Knetsch and a professor of psychology

Daniel Kahneman.

In the first part of the experiment scientists gave coffee mugs

(which cost 6$) to one half of students and announced, that

these small gifts became the property of the participants. After

some time, the auction between the happy owners of unique

mugs and ordinary students began.

After the end of auction it turned out that the offer price set

by the owners of mugs reached approximately 5.25$ per cup,

while the demand price by students was around 2.25$ - 2.75$.

CONCLUSION OF THE EXPERIMENT

The price of goods established by the owner, will

be significantly higher than the one for which the

same person would be willing to buy the this

product.

This is the endowment effect - its essence is

very simple: people appreciate the things that

they already own more, than those, which they

might own.

http://gedankennahrung.de/endowment-effekt-warum-wir-unseren-besitz-hoeher-bewerten/

Imagine, you come to the salon to buy a car and the shop assistant not only shows you a car, but also gives you a

possibility to try it in test drive. While driving you can feel the car on the road and pretend yourself a real owner

of it. Moreover, you start to associate yourself with this car.

What happens? Here comes the endowment effect - you feel the car yours and are ready to spend more money

on it, than after getting the ordinary information about it.

According to the statistics by The

Maritz Research, which surveyed

80,219 buyers of 2012 model-year

vehicles, only 11.4% didn't take a test

drive.

How to deal with

e-commerce and the

inbound marketing?

FREE TRIALS

Free demo version of any software product is the first step to the

acquisition. Why so? Because it is the most bright example of the

endowment effect in inbound marketing. It gives the feeling of owning the

product or service.

When the use of the test period ends, you already have time to get used to it

and want to pay for the purchase. Especially if the demo is good.

Avast Antivirus offers Internet Security software free for 30 days. It is the brightest opportunity to attract people - give them to try. It is better than any advertisement, because the opinion on the product

or service would be based on the own experience of the user.

After the potential customer learn a lot about the software (like in case of Avast) he or she would be ready to pay for it with a greater pleasure, knowing exactly what to pay for.

https://www.avast.com/download-trial

DISCOUNTS AND COUPONS

Permanent discount coupons can be attributed to the endowment effect.

In this case, the keyword is permanent. The buyer is aware of the right to use the

discount at any time, whenever he or she wants, so it gives the feeling of

master in the situation, the discount is already a kind of property, and that's

why it becomes to be more valuable.

Permanent discounts became so beloved,

that there appeared even the portals with

the coupons in different fields. The most

important here is, that they found their

customers!

One of the websites, collecting the

discounts at the one place is Groupon,

which is successful according to the users’

activity. There you can buy a coupon or

even several ones on any offer and use it

when you want to do it.

https://www.groupon.com/

What is more:

1. "Gift card" instead of "coupon". Sometimes, for the customer to feel him/herself the rightful owner of a benefit provided by an online store, it is needed simply to replace the word "coupon" with the phrase "gift card".

2. The absence of a call to action. Make the customer free from having to make decisions. Notification like "We've added a gift card on 25$ to your shopping cart! Make a purchase at 75$ and save 25$ " will greatly facilitate his life andincrease the possibility of purchase.

SELLING TEXTS

Of course, in the text it is impossible to give a person to try something. But

you can do so that the potential customer starts to imagine him/herself the

owner of your product. You need to be precise and specific to show the

process of how your service or product is presented and how it feels to be the

owner of it.

Look at the ThinkGeek, as an

example. The text explains you,

how to deal with the product if

you have it. To practice this

copywriting technique it is

better to start a sentence with the

word imagine to attract the

attention and finish the

paragraph by explaining how your

reader will feel when owning

and using your product.

http://www.thinkgeek.com/product/itnq/

SCORING

The online stores ask their customers to score, give marks or write a review

on the product or service. Instead of it, you can even offer to give the

feedback to the product after the purchase. "How much should this hair dryer

cost?" Or more rigid, “For how much would you agree to sell it?"

Here is an example from the Innocent, where they have the scale with the reviews

near the product. Share knowledge about product by telling stories of happy

customers and explain even the tiniest details. Make an effort not to be boring

and create bright unique descriptions.

https://www.innocentdrinks.co.uk/things-we-make/juices/juice/smooth-orange-juice

ADDITIONAL OPTIONS

Very often you can meet such a situation: you install a free app and can use it

free of charge, but with the exception of some features. These additional

features should be payed. It happens not only with the applications, but also

with the social networks, software, ect..

On the one hand this product is totally free, but on the other hand to have, for

example, a premium version, you need to pay.

Let’s take the famous social

network LinkedIn as an

example. You can use

approximately all the

functions, but in a limited

way. Otherwise you need to

buy the premium version.

Taking into consideration such a tool of

influence as the endowment effect you can

increase the purchase rates, without any

pushing on the leads actions. It would be

beneficial both for you and for your

customer.