In the modern world, we hear a lot about crowdfunding: it helps small and medium companies to generate a budget for their products and achieve popularity by promoting it via various Kickstarter-alike platforms. But what about crowdsourcing? While crowdfunding assists in gathering money for projects, crowdsourcing helps with getting consumer-derived ideas for new products. People tend to reject the practice of crowdsourcing, considering it as less effective. Judge the numbers: 9.65 million of Google search results for “crowdsourcing” versus 36.3 million for “crowdfunding” – demand creates supply, and the “shortage” for “crowdsourcing” says a lot.
Crowdsourcing becomes more interesting if it can also bring financial benefits and boost your sales. How? By applying it wisely, of course.
Generally, when visiting a supermarket, you don't want to waste your precious time by searching for the products you're looking for. In order to help us making decisions, our brains have a few biases in their way of seeing things.
We all know that marketeers are trying to get their products in the centre of a display, and that’s for a very good reason. However, new research shows that there’s another bias that influences our way of checking products. Apparently, our visual attention tends to automatically focus to the upper part of a display when we’re looking for a light-coloured product, and to the bottom for a dark coloured product.
There are only 24 hours in a day for us to get through our to-do lists. So how do we decide what to prioritize? Lucky for us, our brains use cognitive shortcuts to simplify decisions and cut corners. But here’s the catch: cutting corners has consequences. And when it comes to our brain, cutting corners leads to cognitive biases.
2 euros off or a complementary recipe book?
Price-based incentives remain one of the most common types of sales promotion. However, non-monetary incentives have become increasingly more common. Non-monetary incentives mean that consumers receive a free gift (premium) with a purchase of a product. A good example is McDonalds’s Happy Meal, which comes with a free toy.
So what do consumers prefer? 2 euros off or a complementary recipe book? A recent study looked at the fast moving consumer goods (FMCG) retail sector to explain why price cuts are superior to premiums.
Every day, we make decisions between multiple choices and alternatives. After a while, our brains find shortcuts to help us make decisions faster, in a more “efficient” way. This is called fast-thinking, according to Daniel Kahneman, a behavioral economist and author of Thinking Fast and Slow. When we have more time to decide, we begin to refer to our memories and past experiences to make a final choice; this is considered slow-thinking.