5 ms·

I've been reading Rory Sutherland's book Alchemy and it's full of fascinating insights about marketing/branding etc Case in point: - company was testing out t

I've been reading Rory Sutherland's book Alchemy and it's full of fascinating insights about marketing/branding etc Case in point: - company was testing out their mail based fundraising drive - they randomly tested cheap vs expensive envelopes, regular envelopers vs side opening envelopes etc for how people could send back a check - they found that expensive envelopes beat cheap and side envelopes beat top loading The part that was fascinating is that many folks would think "what difference does it make what kind of envelope you use?". Sutherland points out that putting a check for a large amount in a cheap envelope somehow feels "wrong" even if people can't verbalize this. Another example is how in the 1950s many food engineers were obsessed with the idea of "food nutrient pills" and how they would replace cooking and eating out in restaurants. While it's true that things like Soylent and Huel made inroads with the tech crowd, most people still love going out to restaurants. The point being b/c eating out isn't only about eating: it's also about taking your wife out for your anniversary or meeting your siblings who are visiting from abroad. I mention this b/c the HN crowd tends to be very logical/rational (including myself) and this book was a real eye opener around how people actually make decisions. 0 - https://amzn.to/3Plf65m https://amzn.to/3Plf65m

bigstrat2003 8mo ago
Similarly, when I was a teenager I knew a guy who built guitars by hand. He is a master craftsman who makes beautiful instruments, but he told me one time that he had customers sometimes lose interest because his guitars were cheaper than similar competitors (5k vs 10k as I recall). He wound up raising his prices, and got more sales as a result, even though the guitars hadn't changed at all. It was a really interesting (and to me, bizarre) demonstration of how people can make decisions very irrationally at times.
- johnsillings 8mo ago
  veblen goods
- alexpotato 8mo ago
  Couple of other interesting pricing stories: 1. Cereal Apparently cereal makers were losing money b/c they priced their product at a much lower price point than, at the time, the regular breakfast of bacon and eggs. They hired a consultant who pointed out they could raise their prices as long as it was lower than bacon and eggs, make more money and still be cheaper. 2. Raising prices There is a story in one of the pricing/economics books about a store keeper who told her assistant to halve the price of jewelry that wasn't selling. The assistant misheard and doubled the price. The jewelry immediately sold. 3. The shelf that always sells In the book about Shopsin's in NYC, the author and owner mentions that certain shelves in a store will sell out of whatever is on that shelf. Regardless of price, product, time of year etc. Apparently, putting things right by the front door in supermarkets is the opposite: very few people buy anything that is there. I noticed that one of the Real Housewives of NJ had her food product there and thought to myself: someone is giving you bad advice and/or humoring you by putting your product there.

bigstrat2003 8mo ago

Similarly, when I was a teenager I knew a guy who built guitars by hand. He is a master craftsman who makes beautiful instruments, but he told me one time that he had customers sometimes lose interest because his guitars were cheaper than similar competitors (5k vs 10k as I recall). He wound up raising his prices, and got more sales as a result, even though the guitars hadn't changed at all. It was a really interesting (and to me, bizarre) demonstration of how people can make decisions very irrationally at times.

johnsillings 8mo ago
veblen goods
alexpotato 8mo ago
Couple of other interesting pricing stories: 1. Cereal Apparently cereal makers were losing money b/c they priced their product at a much lower price point than, at the time, the regular breakfast of bacon and eggs. They hired a consultant who pointed out they could raise their prices as long as it was lower than bacon and eggs, make more money and still be cheaper. 2. Raising prices There is a story in one of the pricing/economics books about a store keeper who told her assistant to halve the price of jewelry that wasn't selling. The assistant misheard and doubled the price. The jewelry immediately sold. 3. The shelf that always sells In the book about Shopsin's in NYC, the author and owner mentions that certain shelves in a store will sell out of whatever is on that shelf. Regardless of price, product, time of year etc. Apparently, putting things right by the front door in supermarkets is the opposite: very few people buy anything that is there. I noticed that one of the Real Housewives of NJ had her food product there and thought to myself: someone is giving you bad advice and/or humoring you by putting your product there.