People place more value on what they already own.
People often demand much more to give up an object than they would be willing to pay to acquire it.
The pain of giving up something we own drives up that price as compared to the price of acquiring it.
People focus more on what they may lose, rather than what they may gain and they assume other people will see the transaction from the same perspective they do.
Ways to apply the endowment effect in your marketing…
Tap into input bias: The more work you put into something, the more ownership you begin to feel for it.
Invite customers to become co-creators, offering them some ability to influence the end product they purchase, for example, by customizing the design or configuring the components from an available list.
Offer a free or discounted trial of your product or service. Once people begin to use it, they will start to think of it as theirs.
Inform people who've subscribed to your e-newsletter but have stopped opening it that you'll be removing them from your email list unless they begin to reengage.
Notify customers who have earned membership in a specific recognition tier that if their level of business declines, they will drop down to a lower tier and lose the benefits they currently enjoy.
When presenting options, lead with your most robust one. Once potential customers read about everything included in it, they establish mental ownership. When they read about the next, less robust option, they will feel like they are losing benefits.
Getting people to imagine owning your product. Simply imagining ownership begins to feel to people like they do in fact own the item. As a result, they are reluctant to give it up.
Offering a return policy or guarantee can prompt people to give a product a try, intending to return it if it doesn't work out, but once they take possession, the endowment effect can kick in.
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