The psychology behind how leadership expectations can elevate - or limit - employee potential.
In a classic behavioral economic study, made popular by Dan Ariely, consumers were given subscription options for a major publication:
Option 1: $59
Option 2: $125
When given just two options, 68% chose the lower priced option.
When the researchers introduced a 3rd option, a combo price for $125, 84% chose the high-priced combination.
Why?
Humans have a difficult time evaluating things without a comparison.
So when presented with a “combo deal” at the higher price, buyers were ready to spend more money.
We see this phenomenon at movie theaters all the time.
The value price of the large popcorn and/or drink makes selecting a small seem silly.
You may have also heard this science applied as “Good, Better, Best” pricing.
A lot of sellers assume that a two-choice option is the best because it prevents confusion.
But it’s the third, high-priced option that gives our brains the comparison we need to look for value over price.
Looking to maximize your team’s potential? Contact Benchmark Training to meet with an Executive Coach.
