One of the most underused and effective strategies in sales and marketing enables you to make your product, service or business look even better than it is. Making good look great works on a very important principle in behavioural economics called “reference dependence”.

When you are evaluating how valuable something is, you will most likely use reference points by comparing it to other items. For example, a fascinating study on popcorn found that when a small popcorn was offered at a cinema for 2 dollars and a large one was offered for 5 dollars about half the people went for small and half for large. However, when a medium popcorn was added and offered for 4 dollars this dramatically increased the amount of people that went for the larger popcorn. By introducing another variable, it gave the audience something to compare against and a large popcorn came out as a great deal.

What that means from our perspective is that when you want something to look better than it is, you can add something worse and that will act as a reference point and make this thing look even better. Suppose you are selling a computer for 1500 euro. If you talk about a computer for 4000 euro first then the 1500 euro looks like a fantastic deal.

But this does not just work for price. Let us say you are trying to get your customer to buy insurance. By explaining the worst case scenarios that actually happened to people without insurance, you are creating an urgency because you are contrasting having insurance (which might be associated with helping people be safe) with suffering as a result of not being insured. This makes people start to feel much more secure and much safer than previously even though nothing has actually happened.

The idea is that if you want to show someone how great something is… point out how bad not having it can be. The more you do this, the better it will come across. Of course, always use it ethically and be wary of when people use this tactic on you!


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