How Companies Are Using The Contrast Effect To Outsmart Their Customers
And how to avoid it in the future.
In his book, Influence, Robert Cialdini tells the story of two brothers, Sid and Harry, who ran an American clothing store in the 1930s. Sid was in charge of sales while Harry led the tailoring department. Whenever Sid noticed the customers who stood before the mirror really like their suits, he became a little hard of hearing, but not in the literal sense. He would call over to his brother and say, “Harry, how much for this suit?” Harry would then look up from his cutting table and shout back: “For that beautiful cotton suit, forty-two dollars,” which at the time was an absurdly inflated price. Sid pretended as if he hadn’t understood while responding, “How much?” Harry would yell back, “Forty-two dollars!” Sid then turned to his customer and rather than relaying the previously mentioned dollar amount, he reported, “He says twenty-two dollars.” At this point, the customer would have quickly put the money on the table and hastened from the store with the suit before poor Sid noticed his supposed ‘mistake.’
This is the first example of what will be referred to from this point on as the ‘contrast effect,’ meaning we judge something to be beautiful, expensive, or large if we have something ugly, cheap, and small in front of us.
This contrast provides difficulty when it comes to our ability to judge with absolutes.
Here is another example you might be a bit more familiar with: If you take two buckets and fill the first with lukewarm water while the other is filled with ice water and dip your right hand into the ice water for one minute, it is going to grow extremely cold, as expected. Now, if you were to then put both hands into the lukewarm water, you will notice the lukewarm water feels as it should to the left hand and piping hot to the right hand.
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Again, this is the contrast effect at work: you have two nearly identical things exposed to different conditions before then subjecting them to the same environment. The residual sensation from the previous environment is inevitably going to impact the way it takes to the next.
How This Is Being Used In The World Of Business
Without the contrast effect, the discount business would be entirely untenable. If a product has been reduced in price from $100 to $60, it seems to be at a better value than a product that has always cost $60, even though the starting price should play zero roles.
Our money disappears without us realizing the value its already lost due to inflation over time. Rather than if we were to have a tremendous tax imposed on our purchases, we would be outraged.
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From Cars To Food (and everything in between)
The contrast effect is a common misconception and one we are guilty of on a near regular basis. Consumer habits are one of the easiest metrics to draw from when observing how easy it is to fall victim to the contrast effect. Take for instance the new leather seats you opted for when purchasing a new vehicle. Sure, $3,000 sounds like a lot of money when surrounded by general vernacular, but when put in comparison to the $60,000 price tag on the car, it is a mere pittance.
Let’s take an example many of us can relate to — food. As consumers who need food to survive, we are likely to opt-in to potential savings when going for a meal. In fact, experiments will show that people are willing to walk an extra ten minutes to save $10 on food, but those same people wouldn’t dream of walking ten minutes to save $10 on a $1,000 suit. When put into this context, it seems a bit irrational because ten minutes is ten minutes and $10 is $10, but the contrast effect motivates this method of thinking.
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Leave Your Supermodel Friends At Home
Dare I say the contrast effect can ruin your whole life…but it can. A charming woman marries a fairly average man all because her parents were awful, making the average man appear to be a prince. When bombarded by advertisements featuring supermodels, we now perceive beautiful people as only moderately attractive. That being said, if you are seeking a partner, never go out in the company of your supermodel friends. People will find you less attractive than you really are. It sounds foolish, but take into consideration the harsh truth behind this statement. When positioned among those the general public might epitomize as ‘perfect’ or ‘stunning,’ you are involuntarily creating a game of comparison where the odds might not in your favor.
The contrast effect is in a multitude of facets within our lives and it is up to us to recognize where we might be rendering control. When we look at things objectively, rather than subjectively and comparatively, we are allowing ourselves to make more sound and rational decisions. All too often, the sellers of goods will cloud our perspective before we get the chance to do so. Educate yourself and remember when you adopt a certain opinion on a good, a person, or an experience, consider what else might be around introducing involuntary influence to your perception.