1 simple habit to be more persuasive
never offer only one option
Whether we like it or not, we’re all salespeople. You may not be selling used cars or going door-to-door, but you are interested in convincing others to see your side of an argument, or accept your project proposal, or offer you a job.
The common mistake I see people making (myself included) is we only offer one perspective, one thing, instead of contrasting that desired thing with alternative-but-less-desirable options.
Here’s what you need to understand about how humans think:
We are bad at determining the value of something in isolation. We feel more confident about the value of something after we compare it with alternatives.
If you want to be more persuasive, stop offering only your idea. Contrast your idea with a second or third option to put your desired choice into perspective.
Here are some examples of this trick that I’ve seen in the wild:
Good House, Bad House
This past weekend, my wife and I were looking at houses with our realtor. We were scheduled to only see one house, but an hour or so before the appointment our realtor asked us if we'd be interested in seeing a second home right after our appointment. Seeing as the second house was only 5 mins away from the original appointment, I said “sure, why not.”
The first home was nice, it felt like an actual home. It was clean, the mechanicals were recently replaced, and you could immediately see the care the owners put into decorating the place. But, to be honest, the house itself wasn't anything too special. As many of you may know, hunting for a new home isn’t just about the on-paper features like bedroom/bathroom count or square footage. It needs to inspire the feeling of this is our future home.
Given the price, the recent interest rates hikes, and the absence of any real emotional connection, we weren't too keen on submitting an offer. But that changed when we visited the second home..
The second home was the exact same layout as the first one but, in contrast, it was a dumpster fire. The exterior of the house was desperate for a fresh coat of paint, the floors on the inside hadn't been swept in months, and the mechanicals looked old and leaky1—it appeared that the owners did nothing to maintain or upgrade the property since it was built in the late 1960s. And, to top it all off, it was $30,000 more expensive than the first place we saw.
Suddenly, the first house felt like a bargain. I could start to feel the FOMO creep up in my mind. “Maybe we should put an offer on the first place... it did get great natural sunlight and the school district was solid.”
The first house, alone, was an ok house. The first house in comparison to the second home was a much more desirable house.
Comparison heightened the value of the first home even though nothing about it objectively changed.
Amazon.com Pricing
This is a simple one. Imagine you were buying a TV on Amazon, what price would seem more like a deal?
Option A: List price included but crossed out
Option B: List price not included
If you picked option A, it’s likely because you felt buying on Amazon was a better bang for your buck in comparison to the list price (which is shown, crossed-off, in option A). Through this little trick of showing an alternative price, Amazon has subconsciously persuaded you into believing that offered price of $1461 is a great deal.
(If you picked option B, I’d love to hear more on why, in the comments)
The Economist Decoy
Psychologist and behavioral economist Dan Ariely was one of the first to highlight the decoy effect. His experiment, using The Economist Magazine’s subscription offer page, showed how consumers tend to have a specific change in preference between two options when also presented with a third option.
In the below screenshot, the third, print-only option, is a decoy. Clearly, there’s no reason to pay $125 for the “print-only” plan when you can also bundle in the digital subscription for the same price.
Ariely ran the experiment with 100 MIT students and observed that without the decoy option, 68% of students would pick the cheaper $59 plan. But, with the decoy option, the results flipped. The pricier digital + print option seemed more enticing and was selected more often.
Similar to our real estate example, nothing has changed between the cheapest and most expensive options, but the “useless” middle option heightened the value of the pricier offer.
The option that was useless, in the middle, was useless in the sense that nobody wanted it.
But it wasn’t useless in the sense that it helped people figure out what they wanted.
—Dan Ariely, professor Psychology and Behavioral Economics
Recap
The key takeaway is as follows: never offer only one option when trying to sell your ideas/products/etc.
Contrasting options can significantly increase the desirability of your preferred choice as we saw in:
Good House, Bad House: A mediocre house became appealing after viewing a worse, more expensive one, showing the impact of comparison.
Amazon Pricing: Discounted prices on Amazon seem like better deals when compared to the crossed-off regular prices, enhancing perceived value.
The Economist Decoy: A decoy subscription option made a pricier option more attractive, demonstrating how comparison can quickly change what you seem to want.
Good Beats
First heard this when playing NBA Street Vol. 2 Edition on my Playstation 2.
Brings me back.
Appropriate choice for this week’s post.
A 50¢ word (aka words that say a lot with less)
Decoy Effect:
a psychological phenomenon where people's preference between two options changes when a third, less appealing option is introduced.
For Your Thoughts
"Comparison is the thief of joy, but the catalyst of clarity."
—Adapted from Theodore Roosevelt
Yours,
-Rahul
P.S. a reminder you can reply directly to oldmanrahul@substack.com, or you can tweet me @oldmanrahul about this edition. Thanks for reading and supporting my writing :)
We actually smelled gas when the furnace turned on