Technology Services

Persuasive Web Design, Part 12: Over-Estimation of Big, Unlikely Events

We tend to over-estimate the likelihood that big events will happen to us. And, it follows, we tend to over-prepare for such events. This principle applies to both positive and negative events.

For generations, savvy marketers have capitalized on this psychological truism to empty our wallets. Here are a few examples:

Lotteries

On a strictly logical level, most of us understand that it’s extremely unlikely we’re going to win the lottery. And yet, when we buy a ticket, we actually believe we have a real chance of winning!

We’re prepared to pay — in fact to over-pay &mdash for that slice of hope.

Insurance

An entire multi-billion dollar industry relies on this principle. People will pay for protection against the most unlikely things:

  • Volcano damage insurance (when we live nowhere near a volcano)
  • Flood insurance (when we live in a very low-risk area)
  • Flight insurance (even though flying is much safer than driving)
  • Additional flight insurance against a terrorist attack (incredibly unlikely to happen)

Extended Warranties

Extended warranties are actually a type of insurance: we’re buying protection against an expensive repair. And since the covered event is not as unlikely as a plane crash, the premium is much higher!

Extended warranties often cost hundreds of dollars and can add 25% or more to the purchase price. On a logical level, they make no sense whatsoever. Yet for peace of mind, many consumers are persuaded. Once again, they’re over-paying for protection against a big negative event.

The bottom line is that people — including your customers — will pay for the most unlikely things. In particular:

  • They’ll over-pay for protection against terrible events that won’t happen.
  • They’ll over-pay for a chance to get something really wonderful… even though it won’t happen.
Cardinal Path

Share
Published by
Cardinal Path

Recent Posts

Optimizing user experiences with Digital Experience Analytics (DXA) platforms

As consumers become increasingly digitally savvy, and more and more brand touchpoints take place online,…

1 month ago

Enabling Value-Based Bidding with Google Tightlock

Marketers are on a constant journey to optimize the efficiency of paid search advertising. In…

2 months ago

Resolving “Unassigned” Traffic in GA4

Unassigned traffic in Google Analytics 4 (GA4) can be frustrating for data analysts to deal…

2 months ago

This website uses cookies.