Curtail Quantity Sensitivity by Here-and-Now

When would people resist paying more to visit an amusement park with twelve attractions than one with six? Or to purchase three video games instead of a single video game? Or donate a greater amount of money to a fund to save four pandas rather than one panda?
     Stated in another way, of direct importance to the retailer, “Under what circumstance should we hesitate offering more products or experiences in a single bundle, realizing that the shopper isn’t interested in paying a higher amount for the larger quantity?”
     One answer has to do with satiation. When a customer has had enough for now, they don’t want a bigger set. But researchers at Columbia University and Singapore Management University have another answer, this one related to what consumer psychologists call “scope insensitivity.” When purchase decisions feel psychologically closer to the shopper, the shoppers are more likely to show scope insensitivity, in which a higher product count won’t strongly command a higher price.
     In the studies, psychological closeness came from saying the trip to the amusement park would occur in just a week, where the comparison group of study participants were told it would occur next year, the video games had been created recently rather than in the early 1980s, and the need for the panda-protection contribution was imminent. Prior studies found that psychological distance—the opposite of psychological closeness—is higher when a shopper:

• Believes they’ll need to travel a longer way to obtain the item 
• Is selecting an item to be used in the future rather than now 
• Is selecting an item for use by someone else rather than for their own use 
• Considers returning or exchanging an item purchased by someone else rather than by themselves 

     It’s not that people would be unwilling to pay more for a larger quantity in the set. Instead, it’s that people resist paying more than when there is psychological distance and therefore generally require extra persuasion.
     The explanation for the scope insensitivity effect is in the psychological closeness affect. Emotional decisions are, by definition, less logical than well-thought-out decisions, and consumers get more emotional when a decision is closer to the here-and-now. According to studies at University of Colorado-Boulder, University of Oviedo in Spain, and Lieberman Research Worldwide, this is true for positive emotions—such as the thrill in having the item—and negative emotions—such as anger at flawed product performance.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Limit Availability to Overcome Satiation
Drive the Psychological Distance