The anchoring effect sends the first signal, and the subsequent contrasting effect sends the second signal. Peloton CEO John Foley discovered the third signal through trial and error when pricing new exercise bikes: "In the early days, we priced the Peloton bike at $1,200. As a result, we learned HE Tuber from customers that if you ask for $1,200, then The bike must be of poor quality. So we raised the price to $2,000, and sales suddenly increased because people said, 'Oh, look at the price, this must be a quality bike.'"

We often hear that good quality is cheap, but price is also a signal of quality, so make sure you make the right impression.

For example, if you reduce the price significantly ($750,000) in order to sell your house quickly, it will give buyers a confusing signal: is there any defect in the house? Making a buyer think the product (your house) is more expensive can change her perception of her budget and may even make her get more enjoyment out of her new purchase.

To extend: today is your birthday, and you want to bring a bottle of wine home to celebrate. Normally, the wine you drink costs around $20 a bottle, but thinking of a special occasion, you decide to buy wine with a price tag of $50. You don't have a specific wine in mind; you just assume that the $50 wine tastes better than the $20 wine. Just like the phenomenon of higher sales after the price of luxury goods increases...

Your first asking price anchors the buyer, and subsequent offers take advantage of the contrast effect and signal high quality. Here, we discuss the final psychological factor: reciprocity, the natural tendency of humans to return favors to others.

Reciprocity is a powerful force. Keep this in mind when negotiating with buyers. If you start the negotiation with a high enough first offer, you leave yourself plenty of room to be "nice" to the buyer - by pretending to make a big concession (going from an offer of $900,000 to $87 million (the actual reserve price was US$850,000), the buyer gradually made concessions, and finally the transaction was completed at no less than the reserve price.

To expand a bit: Successful salespeople have long used the principle of reciprocity to generate higher sales. Robert Cialdini of Arizona State University points out in his classic book "Influence" that the principle of reciprocity can induce goodwill even if the original kindness is not genuine but is artificially created specifically to induce reciprocation. One example he gave was Hare Krishna's charity, which distributed free flowers to passers-by and within seconds asked for donations (with a high success rate).

Write at the end

Through several African legends, we realize that the power of inspiration is far greater than imagined;

By identifying the costs of mixed signals, we can set correct and effective signals from a psychological perspective to ensure incentive success;

In order to maintain the long-term effect of incentives, strategies such as external incentives, commitment, social networking, and temptation bundling are used in turn, each with its own merits;

Finally, taking negotiation as an example, motivation can help us identify problems, improve actions, and achieve the goal of a better life.

The above is the entire content of the "Underlying Logic Analysis of the Incentive System". The reference comes from Uri Gneezy's new book, Growth Work Practice & Research. If you have different opinions, please leave a message in the comment area below for discussion.

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Add fish and meat, official account: Notes on adding fish and meat, everyone is a product manager columnist. Internet growth operation, trans from mini program-App-platform.

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