Let’s say that you’re about to buy a new shirt or dress for a fancy dinner party, which brand would you choose?
RAFUO or rafuo?
Which one did you like best? Chances are that, when looking for a conspicuous purchase as in this example, you’d choose RAFUO because it looks more premium. It is the extent to which the brand looked premium that helped sell the conspicuous product. Psychologists discovered that uppercase characters have a subtle, yet consistent effect on how premium a brand appears to be.
What are the reasons for consumers to buy specific brands? How can we tell whether a TV commercial will be effective or not? And what is the best way to set up a store? Those are questions central to the field of neuromarketing. But what is and what isn’t neuromarketing? Is it all about research? Or is it also about applying insights from theory into practice? And what does psychology have to do with it?
These questions are exactly why we have written this blog. In this blog you will get a clear overview of everything around neuromarketing. From the research methods to our favorite insights.
Nobody wants to finish last. Regardless of which sphere of live you investigate, people take significant effort not to end up in the painful last position. Diners in restaurants rarely order the cheapest wine on the menu—with preferences clustering around the second cheapest option (McFadden, 1999). The pain of rejection stings most when one is picked last in gym class, whereas the person in the second-last spot breathes a sigh of relief (Weir, 2012).
But what about waiting in queues? Is waiting actually more painful for the last person in line compared to someone waiting an equal amount of time with one additional person behind him?
Through an impressive series of five studies on both in-store and simulated queuing environments, the behavioral scientist Ryan W. Buella investigated the psychological dynamics of queuing. He discovered that being the last one in line carries a powerful psychological difference that has striking consequences on our behavior and satisfaction.
For me, personally, when I’m listening to the radio in the morning and the host is telling a personal story, I find myself immersively listening and feeling empathy. However, the moment they talk about the daily news I’m just laid back casually.
The same holds true for sales pitches where the salesperson starts by telling a bit about his personal life and background before going into the material.
From self-help books to popular gurus preaching the rules of financial literacy – they all seem to have piece of advice in common: budgeting. Presumably, budgeting is the core ingredient of a healthy financial life. It just makes sense to determine in advance what you are going to buy and for what cost. But is it actually true?
If our brains would be perfectly rational, budgeting makes sense. And in many cases, budgeting tends to work in our favor. After finding out we overspend on dining out or buying new clothing, it wouldn’t hurt to set a purchase limit for the next months. Unfortunately, when we put on the goggles of a behavioral scientist and measure the intricacies of what actually happens when people set budgets, some surprisingly irrational patterns emerge.
To put it bluntly: under specific circumstances, setting prior budgets will predictably make you spend more. Period. So, let’s dive into the data on the surprising psychology behind budgeting.