Podcast Episodes

What is behavioral economics? Why does it matter to you?

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Podcast Episodes

What is behavioral economics? Why does it matter to you?

I take framing one step further and talk about the power of numbers in today’s episode. This behavioral economics podcast will be a break from our foundation episodes. I get in to some of my most frequently asked questions (including ending prices in 99 or 97). I also talk about pricing strategies like using random or “interesting” numbers. I share research, examples, and how you can apply framing using numbers in your business.  

Before I dig in, I want to thank Justin from 52 Card Media, Jesse from Cinematic Syndicate, and Jennifer of Jennifer Findlay Portraits for making the website look so awesome. I have also transitioned to a new YouTube Channel and all the full episodes of this podcast are on it. Feel free to subscribe and share it with your friends.


Show Notes

  • [09:17] Last week was all about the concept of framing. Today, we take that concept one step further by unlocking the power of numbers in your business.
  • [09:45] The way you say something is often more important than what you’re actually saying. This ties back to loss aversion (which was the focus of episode 9) – remember framing something as a loss makes people twice as likely to take action than when it is framed as a gain.
  • [11:21] I talked a little bit about pricing and Episode 5. All of the things leading up to the price matter more than the number itself.
    [12:16] Is it really better to end something in 99 than rounding up to the nearest dollar? Should my prices end in 99 or 97? Should I have a random, but interesting number like 456.78?
    [12:55] It’s (generally) better to round down in the 99 versus one dollar question. This works because you’re bringing down the first whole digit number. 599 looks better than 600.
  • [14:24] Consistency is key. If you list your prices and have them one on top of the next, and they say, 399, 499, 999 and 2500 it is just weird.
  • [16:27] The great debate of 99 versus 97 (or even 95). Any of them are typically better than the rounded 0 because of the first digit difference.
  • [18:21] The LAST question on pricing is about using totally random and sometimes “interesting” numbers. This would mean instead of pricing something for $4,600 or 4,599 you would price it at $4,567.89 (so when you look at it the number reads 456789.)
  • [19:09] Making someone stop and say “what?” can be good if you’re trying to disrupt the buying cycle.
  • [20:50] Journal of Consumer Research study called “This Number Just Feels Right” states that luxury pricing or other things bought on emotion (like a bottle of champagne) sold better when it was priced at $40.00 instead of $39.72 or $40.28.
  • [22:01] In another study on the pricing of a camera, participants favored the rounded prices (leisure/luxury/emotional purchase) and the non-rounded prices when they thought it was for a class project (function or looking for a deal).
  • [22:32] Bringing it back to FRAMING: the mindset that someone is in when they are going to buy from you matters.
  • [23:26] Confidence helps you sell and encourages people to buy.
  • [24:08] Statistics and numbers can be very persuasive when presented properly. They can also be negatively persuasive when presented wrong.
  • [25:16] Numbers help your brain value things and make comparisons. Which helps it to make a decision without flagging your conscious brain.
  • [26:22] Look for numbers in your business. People like to be part of the group and that is a big reason why framing in numbers matters.
  • [27:51] We make assumptions based on the numbers we see.
  • [28:49] Statistics like this work because people want to be like everyone else.
  • [29:39] To know what works best, you need to try different types of numbers.
  • [30:18] Four out of five has a better context in the brain than 78%.
  • [32:24] “Most” sounds better than 50%. You can also try to flip the framing the other way.
  • [33:42] Find a number in your business and look at all the different ways to present it. Let me know what works best for you.
  • [40:30] Episode 18, is back to behavioral economics foundations – when we will talk about priming. You won’t want to miss it! BE thoughtful.

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

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