How to Make Your Business Their Habit

The concept of “try before you buy” certainly isn’t new, but it is very effective. In fact, it’s so effective that market researchers have conducted studies to understand why it works so well. See what they learned and find out how to apply it to your business.

People are risk averse.

What’s the biggest barrier that stops you from trying something new? Researchers say it comes down to risk. For example, when shopping for a car you would probably invest hours or days scouring the internet for feature comparisons and consumer reviews. But when it comes to trying a different brand of cookie or the new restaurant down the street, there’s far less risk involved. If you’re not happy with the cookies or the meal, it’s really not a big deal because it’s cheap compared to the car.

Now imagine that you received a coupon from the new restaurant for a free entrée with your purchase of any appetizer. You’re now even more likely to go because they’ve lowered the cost and the barriers to take action, as well as the risk associated with going.

Apply it to your business.

Intro offers are a great way to encourage people to book a first visit. When creating them, include something free, but make sure there’s some cost involved, too. That way there’s a perceived commitment, which brings us to our next point.

Investment leads to commitment.

There’s a psychological phenomenon known as the sunk cost fallacy. This came about after researchers discovered that the more people invest in something, the more they value it and the harder it is for them to let go.

For example, have you ever gone to see a movie, realized it was awful 15 minutes in, but finished it anyway? This is a prime example of the sunk cost fallacy at work. We continue watching regardless of how much we dislike it because we’ve already invested in it. Walking out would feel like a waste of money.

Apply it to your business.

When creating an intro offer, never make it completely free. Always require prospective clients to make some sort of financial investment because it establishes a sense of perceived value and commitment. A great way to do this is to offer a discount on multiple visits rather than just one. For example: Buy two, get two absolutely free! The two free visits lower the perceived risk, while the cost of the other two establish a commitment.