One day while browsing the World Wide Web (obviously for work-not just wasting time), I stumbled on the following ad, on the Web site of a magazine, the Economist.
I read these offers one at a time. The
first offer-the Internet subscription for $59- seemed reasonable. The second
option-the $125 print subscription-seemed a bit expensive, but still
reasonable.
But then I read the third option: a
print and Internet
subscription for $125. I read it twice before my eye ran back to the previous
options. Who would want to buy the print option alone, I wondered, when both
the Internet and the print subscriptions were offered for the same price? Now,
the print- only option may have been a typographical error, but I suspect that
the clever people at the Economist’s London offices (and they are clever-and quite mischievous in a British sort of
way) were actually manipulating me. I am pretty certain that they wanted me to
skip the Internet- only option (which they assumed would be my choice, since I
was reading the advertisement on the Web) and jump to the more expensive
option: Internet and print.
But how could they manipulate me? I
suspect it’s because the Economist’s marketing wizards (and I could just picture them in their school ties
and blazers) knew something important about human behavior: humans rarely
choose things in absolute terms. We don’t have an internal value meter that
tells us how much things are worth. Rather, we focus on the relative advantage
of one thing over another, and estimate value accordingly. (For instance, we don’t know how much a six- cylinder
car is worth, but we can assume it’s more expensive than the four- cylinder
model.)
In the case of the Economist, I may not
have known whether the Internet- only subscription at $59 was a better deal
than the print- only option at $125. But I certainly knew that the print
and-Internet option for $125 was better than the print- only option at $125. In
fact, you could reasonably deduce that in the combination package, the Internet
subscription is free! “It’s a bloody steal-go for it, governor!” I could almost
hear them shout from the riverbanks of the Thames. And I have to admit, if I had been inclined to subscribe I probably would
have taken the package deal myself. (Later, when I tested the offer on a large
number of participants, the vast majority preferred the Internet- and- print
deal.)
So what was going on here? Let me start
with a fundamental observation: most people don’t know what they want unless
they see it in context. We don’t know what kind of racing bike we want-until we
see a champ in the Tour de France ratcheting the gears on a particular model.
We don’t know what kind of speaker system we like-until we hear a set of
speakers that sounds better than the previous one. We don’t even know what we
want to do with our lives-until we find a relative or a friend who is doing
just what we think we should be doing. Everything is relative, and that’s the
point. Like an airplane pi lot landing in the dark, we want runway lights on
either side of us, guiding us to the place where we can touch down our wheels.
In the case of the Economist, the
decision between the Internet only and print- only options would take a bit of
thinking. Thinking is difficult and sometimes unpleasant. So the Economist’s
marketers offered us a no-brainer: relative to the print-only option, the
print- and- Internet option looks clearly superior.