Neuromarketing Services

Relativity Bias – How the Brain Sees Numbers

How can a higher priced product help you sell more of a lower priced one? The fast-thinking emotional brain can’t perform difficult calculations. Instead, it does rough comparisons. It sees numbers in relationship to other numbers. That’s why the relativity bias is important to understand in Neuromarketing.

Relativity Bias Neuromarketing Techniques

When Williams Sonoma first introduced its breakthrough bread-making machine, it started by offering just one model. It was priced at $275. Sales for this new product were slow. Why? Because consumers had no idea of its worth. Was that a good price? Was a machine that made bread a good value? It was a new concept, and people were confused.

In a brilliant move, the company introduced a larger model of bread-maker and priced it at $429. They showed both products together. The more expensive model sold poorly, but the lower-priced unit flew off the shelves. Why? Because consumers could compare two products and believed that the smaller unit was a great buy.

Values, Discounts and Prices Are All Relative

Try this thought experiment. You want a new set of computer speakers. Looking through your Sunday newspaper ads, you see a set advertised for $25 at a nearby retailer. Then, you see another ad for identical speakers, but for only $10, a $15 discount. The store with the lower price is 12 miles away. Would you drive 12 miles to save $15? Researchers found that 80% of consumers would make the drive.

Relativity Cognitive Bias Neuromarketing

Now, think about shopping for a laptop computer. The nearby store has one you like for $1,100. The store that is 12 miles away offers the same model for $1085. Would you make the drive to save $15? Researchers found that 80% would not.

The value of the discount is relative to the total cost of the item.

For the speakers, $15 was a 60% discount. For the computers, it was only a 1.3% discount.

Consumer Decisions Are Fast and Intuitive

95% of all consumer decisions are made quickly and unconsciously by the fast-thinking emotional brain. While the intuitive thinking can do rough comparisons of numbers, it can’t perform precise calculations.

The relativity cognitive bias is closely related to the anchoring bias, which ties value calculations to recently-seen numbers.

In marketing, there are several ways you can use this relativity comparison tendency. They can influence consumers and trigger buying decisions:

Understanding Common Cognitive Tendencies Boosts Sales

The examples shown above are just some of the ways neuromarketers can help online sales of products and services. The relativity bias is just one tool that can help you outsmart your competition. Often, more than one tendency in the brain to act quickly can be used at the same time. That amplifies the effect. A comprehensive Neuromarketing strategy, applied throughout your internet marketing will ensure your success. As the Midwest’s only neuromarketing firm that specializes in web design, SEO, and PPC advertising, we can help you achieve your goals. Contact us to get the conversation started. Let us show you how neuroscience-based marketing can boost your revenues.

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