A potential price increase is more powerful than a discount. A lesson from "Sway"

“Sway” the new book by brothers Ori and Rom Brafman (one a psychologist, the other an entrepreneur) has many powerful lessons for marketers. The most useful for us wedding professionals maybe the emotional motivation of “loss aversion” Here is a partial excerpt from their book:

… economists wouldn’t expect people to be more sensitive to price increases than to price decreases. But what Putler found was that shoppers completely overreacted when prices rose.

Anyone who’s made a shopping list with a budget in mind can tell you how this plays out. If the price drops, we’re mildly pleased. But if we see that the price has gone up since last week, we get an oh no feeling in the pit of our stomachs … This feeling of dread over a price increase is disproportionate—or asymmetric—to the satisfaction we feel when we get a good deal.

We experience the pain associated with a loss much more vividly than we do the joy of experiencing a gain. …

Putler’s research illuminates a mystery that economists have been grappling with for years. For no apparent logical reason, we overreact to perceived losses.

The take away here for us wedding pros is two points;

• Be willing to share the any upcoming price increases with potential clients. As we now know, inflation is very real, particularly in energy costs, any oil based products and food, all very important components to a wedding and reception. Truthfully informing your potential client of the need to raise your prices soon is a disproportionally powerful influence for to her to contract for your services before any price increase.

• If you are doing discounts or special offers to bolster sales, by all means include a meaningful expiration date in those discount offers. Don’t overlook the powerful fact that“We experience the pain associated with a loss much more vividly than we do the joy of experiencing a gain.” A savings of itself does not have equal power to the risk of losing that savings.

To learn more about “Sway” visit the book’s website.

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