Good things come in smaller packages

It works at home, in high profile businesses and even in retail (Ebster & Neumayr, 2008) and all comes down the innate principle of reciprocity. What Cialdini (2007) refers to as the larger-then-smaller-request technique, more widely known as the Door in the Face phenomenon. A person will be more willing to seal the deal when a more expensive pricing is initially stated prior to a reduced, more moderate request. Two facets contribute to this phenomenon: a change in perception of the value of money, and the human instinct of reciprocity.

Let’s look at “Motherfucker Jones’s” request (see video above). He sets a price on being the mind behind the murder of the three bosses - $50,000 –  once rejected, he immediately replaces it with a moderate price - $600. Now, surely, such an instant second request was planned? Well, by suggesting $50,000, he knows for sure that the latter request of $600 will instinctively be valued as cheaper and a more reasonable price. And so it sells. What makes this technique fascinating is the concept that if $600 were put forward as the initial request, inherently its value would perceptually become more deer. This strategy distorts the customer’s perception of the value of money and increases the willingness to spend it. By comparing to the earlier price, the latter price – although still expensive – appears smaller.

A scenario of my own occurred 4 years ago in a club in the south of France. The bartender proposed I pay 8 euros for a can of red bull. Of course, I was stunned by this price, so I decided to what some might call ‘trick’ the bartender by using the Door in the Face technique from the customer’s perspective. At first, I tried to barter – ‘6 euros?’. He was having none of it. So I decided to test whether he would notice the complete illogical nature of the next proposal I made – ‘2 for 8 euros?’. For a reason that was unknown to me back then, he accepted. I had managed to get 2 cans of red bull for 8 euros, 1 can for 4 euros – half the price initially proposed AND less than the first, rejected, offer I had made (6 euros)! The question many people would ask now is “How did he not realise this outrageous loss in money?!”. Well, it all comes down to this implicit compliance technique working via the theory of reciprocity. The bartender may have felt, after rejecting my initial offer of 6 euros, that he owes something, perhaps a concession for the next offer (2 for 8 euros). This step to compliance may not have been conscious, but it occurs with or without intention.

Yet, could it be that the moment he heard me offer 8 euros the bartender sealed the deal out of impulsivity? Having initially requested that price, once I had conformed to that, he may have assumed it was a break through without processing the complications of actually losing money for what was sold (2 red bull cans rather than 1).

Let’s turn to another explanation. It’s not alien to us that a reduced price elicits the assumption that we are ‘gaining’ money when accepting a smaller request. Take a dress on offer for example, reduced from $500 to $250. For most, the automatic response is “I’m saving $250, so I have to buy this dress!”. Most certainly, you are NOT saving $250. If anything, losing a pretty large amount of money. Surely we are aware of the irrationality behind our reasoning when buying reduced items? So why do we still do it? Does it make us feel better? The answer is yes and what Festinger’s (1957) theory of cognitive dissonance might argue as our instinctive way of sustaining attitudes and behaviours as consistent. Buying the dress (the behaviour) and simultaneously holding the attitude that it is too expensive results in a cognitive conflict. Something has to change, and so we make excuses for our behaviour (clearly buying the dress is more important). Consequently, we convince ourselves that the dress is cheap. In extreme terms, we excuse our behaviour by persuading ourselves that we are ‘saving’ or ‘gaining’ money.

To conclude,

Tips for all hagglers:

1)    Starting prices must be higher than within the reasonable range – that way, a smaller yet still expensive price will appear cheaper and may sell.

2)    Emphasise the point that the second moderate price constitutes a concession – people feel guilty and WILL reciprocate for that.

3)    Sell your credibility – this goes without saying.

References:

Cialdini, R. B. (2007). Influence: The Psychology of Persuasion. New York: Collins.

Ebster, C., & Neumayr, B. (2008). Applying the door-in-the-face compliance technique to retailing. The International Review of Retail, Distribution and Consumer Research, 18(1), 121-128.

Festinger, L. (1957). A Theory of Cognitive Dissonance. Stanford, CA: Stanford University Press.