How People Buy

Consumers judge the quality of a product by its price. The higher you price your product, the more desirable it becomes in the eye of the consumer. Most of the marketers I know are afraid of pricing their products above competition. The consumer is not a moron, she is your wife.

—David Ogilvy, Ogilvy on Advertising, 1985

The first concept is that people buy emotionally and justify intellectually. I live in California, and I understand the best time for earthquake insurance sales is right after one. This is curious, especially from an actuarial point of view. If people were willing to assume the risk prior to a quake, why would they not be willing to assume the risk after one strikes? The probability of another earthquake striking simply because one just did does not change, since fault lines do not have memories any better than dice at the craps tables in Las Vegas. The purchase is not made based upon the intellectual calculation of the statistical odds, but on the emotional desire for peace of mind. Customers are attempting to maximize their serenity. Neurologist Donald Calne says, “The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions” (Roberts 2005: 42).

People also do not like to admit being sold, but they brag about what they buy. Think of the last time you made a major purchase—a boat, car, or new gadget—and said to a friend, “Guess what I was sold today.” People do not like to feel they ...

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