Dan Ariely is the author of Predictably Irrational: The Hidden Forces that Shape Our Decisions. Environmental factors affect the way that we make decisions. Today I deliver Dan Ariely’s Decisions to Exploit in Business and in Life.
Putting a lot of this stuff into practice will help you sell more and become a better business person so here are the takeaways.
1. The truth about relativity [0:36]
The example he gives in this book is about the Economist.
People don’t compare price based on what the value is to them, they compare prices based on the other prices they see.
2. The fallacy of supply and demand [1:44]
The first price a customer hears is going to be that price that is anchored in their head
Being the first person to give a price could actually help you if the person is talking to multiple vendors. Because it puts you in that position of power where you control now what the customer is going to think.
3. The problem of procrastination and self-control [2:42]
If a person sets their own deadline and it’s a clear date and time that a thing has to get done, they’ll get it done. They’re more likely to get it done than if they had no deadline or if the company assigned a deadline.
4. The high price of ownership [3:37]
The IKEA Effect states that we don’t like giving things back once we own them. And we tend to value our own stuff more highly that other people’s stuff.
Our aversion to loss and feel of ownership dictates that we hang on to it.
5. The effect of expectations [4:23]
If someone comes in and they expect your service to be great, they’ll be looking for reasons why it’s great and it will tend to reinforce itself. Same thing if it’s bad.
This is also what Jack Ma was relating to when he talks about the Forrest Gump Effect – https://www.youtube.com/watch?v=eBqsAVCbosQ
6. The power of price [5:01]
The more expensive something is, the more you value it and the more value it has to the customer. So a customer is going to get more value out of a service that costs ,000 versus a service that costs 0.
And this is actually another argument for raising your prices and using value based pricing.
Get Predictably Irrational by Dan Ariely audiobook for free – http://amzn.to/2luiquN
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