🛫 Read more about infobusiness, financial literacy, personal growth. Internet business, business on the Internet, investments, earnings, professions, profitable investments, deposits. Success stories, self-development, personal growth.

Why we make impulse purchases


Do you save money? Surely not. Maybe you have a loan or two. Or you owe friends or relatives. Maybe all your money is slipping through your fingers. And you berate yourself for making impulse purchases.

No need. It is not your fault. It’s all human psyche.

Why do we spend a lot and often borrow. And then we spend even more on impulse purchases

Everything is simple. We are hedonists who do not think about tomorrow. Scientifically, this is called "hyperbolic discounting". Despite the complex name, the meaning is simple.

We prefer to enjoy the here and now. And we deny ourselves even more pleasure in the future. All our decisions are based on this.

Test yourself by answering one simple question. Would you rather get 1,000 🪙 now or 1,500 🪙 in a month?

We thought so.

It is not for nothing that certain expressions have become entrenched in society. We say “at least a flood after us." Or “we’ll think about it tomorrow.” In a word, we incline towards simple paths and consciously bypass complex ones.

From 1980 to 2004, credit cards became a popular phenomenon. At the same time, the number of bankruptcies increased by 5 times. See the pattern? Do you recognize yourself?

Why we don’t know how to plan finances

According to the theory of evolution

Scientists have not yet come to the correct answer. Adherents of the theory of evolution believe that genes are to blame for everything. We buy "here and now" because our ancestors survived this way. From long-term planning then died. It’s hard to think ahead if you have to feed a whole tribe.

According to the theory of cognitive psychology

We think affectively. And we make appropriate decisions. Those who agree with this theory blame our psyche for everything. But the psyche is a component of a person. Its important biological part. Why, then, is it formed so impractically?

Evolutionists and cognitivists look convincing in their arguments. But why don’t we just evolve further? Without the uncomfortable and wasteful “here and now”.

Because we have mass media. When commercials about the “here and now” appear in advertising, an effect of urgency and scarcity is created. We are assured that living in the here and now is the key to happiness. But is it?

Maybe “the moment is now” is just a banal scam for money?

In 2009, every American had at least 4 credit cards. And most were in no hurry to repay their debts when they spent this money. They lived under the slogan "here and now", and were not particularly happy.

According to marketing theory

But resisting genetics is difficult for another reason. Marketers are very fond of using hyperbolic discounting. It tries to get people to buy more. And more often. Again and again. This is taught in universities and advertising courses. And we are on it.

Sellers tricks

1 Postponement and installment payments. Purchasing household items on credit is not the most profitable business. The amount you have to pay will always be more than the market price.

How not to fall for this trick? Save money, and postpone the purchase. In this case, you will not have to overpay. By the way, there is no shortage in the modern world. Do not rush to participate in the action. Find out how often this company conducts such marketing activities. And check prices in similar stores.

  1. Subscription. Is a yearly subscription cheaper than several months separately? This is how the relationship with the client is built. That is with you. And it doesn’t matter what it’s about.

Why do we do impulse buying?

This is due to human cognitive laziness. When making decisions, we rely on irrational arguments. That is, the illusion. But this is also a no-brainer. So we save energy for mental work. You can talk about cognitive distortions for a long time. Therefore, in this article we describe only the most common ones.

Cognitive Biases That Influence Your Buying Choices

1 Goods-bait.

Cleverly, this is called the asymmetric dominance effect.

The bait product is often damaged goods. Next to him expose the normal. An ordinary consumer compares two options. And he thinks it’s very beneficial. Some sellers even bet that the buyer will carefully change the price tags. And he will buy a normally working product for the price of a damaged one.

2 Bounded rationality.

There is no objective possibility for comparison. And marketers know this. As well as the fact that a person does not like to choose. Behavioral economists and neuroeconomists even have another term. "The Pain of Decision Making". Remember the first cognitive distortion, the bait product. Marketers specifically "lock" a person’s attention on two objects. Thus, one purchase in any case will look better than another.

3 Price comparison.

Expensive dishes on the front pages of the menu in restaurants. It’s not because they want to sell in the first place. This technique is used to make the rest look cheaper. The same trick is used in game development. The companies are releasing a collector’s edition of the game. And "standard equipment" looks affordable.

4 Increased demand for expensive goods

It’s a completely idiotic theory, but it works. A person thinks that an expensive product is cool. And he wants to get it. In The Psychology of Influence by Robert Chaldin, this is called "social proof". It is based on what people tend to do as most. We perceive exorbitant prices as an indicator of high quality.

The more complex the product, the more difficult it is for the buyer to evaluate it. And the easier it is to deceive this buyer. For example, you are unlikely to be interested in plastic plates of 3000 🪙. Wouldn’t a pharmaceutical novelty be more effective? Especially if it costs 3 times more than this medicine that you have been taking for a long time. Our answer is the same. It’s just that in one case you overpay, but in the other you don’t.

Post source: kakzarabotat.net

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More