The Endowment Effect: How Humans Value Things They Own

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The endowment effect is this idea that we value things that we own. Once something becomes ours or once we think of something as ours, we place even more value on it. So a great marketing example is there was this online wine company and they wanted me to buy a bottle of wine by 1159 tomorrow. They didn't just say, hey, buy a bottle the day before; they said, you have $15 of unused credit in your account that expires at 1159Tomorrow. The net net was the same, but I was more likely to do it because I thought of the $15 is being mine. And that's why the endowment effect can be so strong.

When you understand your customers’ motivations, then you can start using your marketing tactics way more effectively.

Nancy Harhut is the Co-founder and Chief Creative Officer at HBT Marketing. She’s also an expert in behavioral science and its intersection with marketing.

Daniel and Nancy discuss why you don’t just need to get the right message to the right person - you need to do it in the right way, how the powerful Endowment Effect can influence sales people, and why autonomy bias is a practical tactic all marketers can put to use.

And thanks to our episode sponsor, Retention. What do brands like Warby Parker, Dr. Squatch, Vital Proteins, and Blendjet all have in common? Retention.com is their highest performing ROAS channel by far. Visit Retention.com to book a demo today.

Follow Nancy:

LinkedIn: https://www.linkedin.com/in/nancyharhut/

Twitter: https://twitter.com/nharhut

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LinkedIn: linkedin.com/in/daniel-murray-marketing

Daniel is a Workweek friend, working to produce amazing podcasts. Find out more, visit: www.workweek.com