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The Psychology of Loyalty

percent on his second, you would assume he was smart and then became lazy. But if you reverse the order of those scores, you would surmise that the test taker is not necessarily smart, but that he busted his butt studying for the second test. In fact, there is no difference between the two scenarios.

A business needs to do everything right the first time. If a consumer gets an initial low price, it's very likely that she will view subsequent prices from that business as comparably low—and might not even go through the trouble of price checking. In that instance, the small business benefits from our tendency to go out of our way to justify the status quo.

We also tend to justify our decisions, and feel comfortable iwth the familiar. The implications of this are clear and provocative:

  • Go out of your way to offer the best possible deal—even if it means selling at cost—and the best possible service to first-time customers. Make sure they anchor to your business immediately.
  • Go the extra mile to remain visible and familiar to your customers. They are more likely to think better of you simply for that reason. Regular emails and texts and retargeting—within reason, of course—can play pivotal roles in maintaining loyalty. 

2. When, on first impression, we instantly find one quality appealing in a person, we tend to extend that opinion to other qualities not connected to that initial impression. For example, if we think that someone is attractive, we also think they are trustworthy, or if we think someone is intelligent, we also think they are fair-minded. The same is true for businesses; if we like one aspect of a brand, we'll have a positive predisposition to everything else associated with it.

3. Our minds have an unusual way of reacting to pricing and perceived value. Let's look at what happens when consumers have a choice of two products. Product A costs more and has more features; Product B is less expensive and has less features. More people choose Product B.

Then a third option, Product C, is introduced. It is the most expensive option, and it has more features than B, but less than A.

Because Product A now looks like a better value than Product C, many more people choose Product A than they did in the first example.

Rational behavior? Absolutely not. If you didn't want the more expensive option before Product C was introduced, why would you want it after? It's a perfect example of our minds tricking us.

As a small business owner, you probably don't give nearly enough thought to the way you present your pricing options to consumers. You should. Understanding how consumers make decisions can have a meaningful effect on your revenue.


Adam Hanft is a brand strategist at Como, where he works closely with Como's marketing and executive leadership on strategy, branding, and messaging.

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