Average- 6 Min Read
Yesterday, I visited a grocery store and bought some vegetables, fruits, and milk for dinner. While I was waiting at the checkout, I noticed some candies near the cash register.
I don’t usually get candies, but I ended up buying a chocolate bar. When I got home, I couldn’t even remember why I decided to buy it, but it was in my shopping bag.
I’m sure it happens to everyone. But did you know it’s a marketing strategy combined with psychological phenomenons? Today, we’ll explore this in depth.
There are two key functions to explain it: reference dependent and tension reduction effect.
What is the Tension Reduction Effect?
Tension reduction effect is a psychological concept that refers to the bring down the tension when you achieve something or make a decision.
When you are at a cash register, you’ve already faced a lot of choices in the store. You might think “Do I really need this?” or “Is there a better product at a similar price? These thoughts can create a lot of anxiety and increase your stress levels.
However, once you’ve completed your shopping, your tension decreases, leaving you more vulnerable. If a cashier suggests an item, regardless of whether you want it or not, you might buy them without thinking carefully, unlike careful consideration you put into your earlier purchases.
This is why impulsive decisions are often made at a cash register.
You might also see coffee shops or cafeterias at the entrance of stores. They’re not just for customers coming in; they’re strategically placed there for those who have finished shopping and are susceptible to the attractive items, like a Starbucks coffee. This is another good example of using the tension reduction effect.
Tension Reduction Effect in web marketing
Additionally, in web marketing, when you make a purchase on Amazon, you often see related productions at the bottom of the page. This is where the tension reduction effect comes into play.
For example, when I looked up the protein powder I usually use on Amazon, I was suggested to buy protein shakers and supplements with the notes like, “People buy these together …” These suggestions were everywhere on the website.
I usually think I wouldn’t buy items from the suggestion area, but sometimes, especially after selecting a product and going to the purchasing page, I end up buying them. That’s the tension reduction effect in action.
During online shopping, people can easily compare similar products, reading descriptions and reviews, which can make the shopping process longer and heighten tension.
However, once they finalize their choice, they relax and become vulnerable for additional suggestions. This is how the effect is applied in web marketing.
The key difference between in-store and online shopping is that web platforms can provide targeted product suggestions based on what you buy, making it more effective.
What is reference dependence?
Reference dependence is a psychological phenomenon which is widely studied in behavioral economics. It refers to the tendency of people to make decisions based on a specific evaluation point, which is created through their past experience.
Why does it happen, and why is it important?
- Simplification of cognition
When processing information, our brains often simplify complex situations. Using a reference point through the process allows us to evaluate information more easily, reducing cognitive burdens and facilitating decision making.
- Reduction the possibility of failure
By comparing options to a specific point, we can lower the risk of perceived loss. Instinctively, humans try to avoid losing values of their possessions, so having a reference point helps in evaluating products compared to what they already own.
- Shifting of reference points
This flexibility is crucial for marketing because reference points can move depending on the context and change feelings of customers towards products. By strategically influencing reference points, marketers can maximize the chance of making a sale.
For example, when you purchase an item on sale, you often see its original price at first. This original price serves as a reference point and you can easily compare it with the sale price. As a result, it becomes clearer how much you save and what value you gain from the purchase .
How does it apply for the grocery store example?
At a cash register, customers typically see the total price displayed, which gradually increases as the cashier scans each item.
This total price serves as a reference point. As the price increases, items like candy bars look inexpensive, leading customers to consider them as lower-cost options and less risk financially
This is how reference dependence is used in grocery stores.
Reference points with other marketing techniques
Additionally, this technique can be enhanced by combining it with other marketing techniques.
Anchoring Bias
This psychological concept describes how people evaluate prices based on the first price they see at a store. It works similarly to reference dependence. By using this bias, you can control customers’ perceptions of products.
For example, some brand stores display the most expensive item at the entrance. This strategy isn’t necessary for selling that product; instead, it’s for setting the high first price(reference price), making other products look much cheaper in comparison. It makes it easier to persuade customers to purchase products than if they weren’t influenced by the bias.
Framing Effect
The framing effect refers to how people’s perspectives and feelings can change based on how information is presented. Marketers can use this to emphasize the strength of their products or services.
For example, when reference dependance is applied in a sales context, the framing effect can enhance its persuasiveness.
Consider these two sentences: “30% off” or “selling at 70%”. Although they mean the same thing, “30% off” feels cheaper because of the word “off”, making people think it’s cheaper than its original price. In contrast, “selling at 70%” requires more thought; this sentence is too complicated.
Well, I’ve never seen tags that say “selling at – %” anyways though.
When using the framing effect, it’s important to keep messages simple and quick to understand because its effect relies on instinctive reactions.
At our everyday stores, we see these marketing techniques. Learning about marketing can significantly change our perspectives towards the world, so let’s continue exploring this together!
References
Reference dependence – BehavioralEconomics.com | The BE Hub
【ついで買いの心理】テンション・リダクション効果とは？ – Web活用術。 (swingroot.com)
参照点依存性とは｜高単価商品が売れてしまう嘘みたいな心理学 » サイコロジーセールス (sales-closing.net)
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