In this episode, Alex Mandossian talks about the contrast effect about how the human brain perceives and is influenced. Alex relates this concept to sales and most business deals and how it could be influential if used correctly. Learn how the contrast effect works with human buying decisions and pricing as Alex dives into the strategy of pricing high then going low and not the other way around. At the core of it, he shows why the contrast effect is not perception but is fuel.
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The CONTRAST Effect
This show is devoted to coaches, consultants and other service professionals who want to get more premium clients, but don’t enjoy the sales process. We believe that seeding through storytelling is the new selling. No matter what you believe, nothing happens in your business until something is sold.
It doesn’t matter what business you’re in. If you hate selling, then this podcast is for you. After you read a few episodes, you’ll find out that selling can be fun. It’s fun as long as you know what to say when to say it and how to say it.
If that’s what you’ve been looking for, then you’re in the right place because this podcast teaches you how to sell by obliterating the objections that lead to that terrifying personal rejection that everyone is panicked about. I don’t know if you’re panicked about it, but many people are, and many are my students. If all of this sounds interesting to you, all you need to do is lean forward and read carefully.
Although ethical influence is central to our discussions, you and I will also explore other fascinating and important topics such as getting more exposure on social media, attracting the right joint venture partners, how to create an Amazon bestseller and podcast SEO tactics. SEO stands for Search Engine Optimization. Getting higher-end clients, that’s my specialty.
[bctt tweet=”You don’t have a traffic problem when you have a website. Instead, you have an offer problem.” username=”AlexMandossian”]
Creating irresistible offers. My friend, Ryan Deiss, says that you don’t have a traffic problem when you have a website. You have an offer problem. You will also learn about curriculum design, productivity habits, story selling formulas, and even ninja marketing tips just to name a few.
In this episode, you’ll learn three key insights, which I believe are critical to making you a highly-skilled ethical influencer. You’ll learn, number one, what the contrast effect is and why it’s influential when you use it correctly. Number two, you’ll learn how the contrast effect works with human buying decisions. Number three, why the contrast effect works with pricing when you price high, then go low and not the other way around.
Lean in and read carefully because this episode could have a significant impact on how you can win the hearts of others with total and absolute certainty. That makes your world and your life a lot easier when you have more certainty, especially when you sell.
If English is your second language, I hope you read this and all the other episodes not just once, not twice, but three times because nothing empowers your fluency of any language when you’re learning the art and science of ethical influence.
The Story Of Dr. Robert Cialdini
Dr. Robert Beno Cialdini was born on April 27th, 1945. He is an author and a Regent’s Professor Emeritus of Psychology and Marketing at Arizona State University. He was a visiting professor of marketing business and psychology at Stanford University.
He’s also been involved at the University of California at Santa Cruz. That happens to be the same university where the founders of Neuro-linguistic Programming or NLP started. I’m talking about Richard Bandler and John Grinder.
Cialdini, who is a friend of mine, I’ve known him for over a decade. He’s best known for his 1984 book on persuasion and marketing. It’s titled Influence: The Psychology of Persuasion. If you don’t have that in your library, I recommend that you pick it up immediately. At least the Kindle version so you can start reading it. I also recommend the audio version.
It was based on three undercover years of applying for and training at a used car dealership, at fundraising organizations and telemarketing firms to observe real life, in the field situations of persuasion.
If you know his Cialdini’s Six, now there are seven principles of persuasion. He observed six fundamental principles at the time. One, reciprocity. Two, commitment. Three, consensus. Four, authority. Five, liking. Six, scarcity. It’s in no particular order of importance. In 2016, he proposed a seventh principle, which he calls the Unity Principle.
The commitment was called commitment and consistency in the original book. The consensus was called social proof, which you may have heard of, but they’re the same principles. The more we identify with ourselves to these principles and with others, the more we are influenced by others as well as the more we can influence others.
There’s an effect that he talks about in his books. It was first brought up in his 2007 book called The Psychology of Persuasion, which explores how our perceptions are formed by using comparison techniques. That effect that applies all seven principles is called the contrast effect, which is the topic of this episode.
The Contrast Effect
When we experience similar things in succession or spontaneously, we will evaluate the lesser or greater value of the second through direct comparison with the first. All that means is we’re creatures of comparison. We know how expensive something is by how inexpensive something else is. We know how heavy something is by knowing how light something else is.
The contrast effect is important because it leads to an enhanced or diminished perception of the second thing or even the third thing when it comes to pricing on how we viewed the first. I’m going to give many examples.
For example, if you pick up a heavy box and then you pick up a lighter one, the lighter one will feel a lot lighter than if you just picked up the light one on its own. This happens all the time. It can also be with the temperature of the water. Putting one hand in hot water and the other hand in cold water. If the cold water was just tap water, room temperature, it will feel a lot colder than it is because of what your other hand is feeling with the hot water. That’s the contrast effect.
It works in business all the time. It’s working on you constantly. I want you to be aware of it so that you ethically can influence others. Ethical influence is something that Bob Cialdini first taught me over a decade ago.
The reason the contrast effect is so powerful is when you do that contrast, especially in a sale or enrollment, then it becomes influential in an ethical way where people are buying and you’re not just selling.
What’s happening with the contrast effect scientifically? It’s because our brain evaluates things based on the mode of comparison that is most easily accessible at that given moment rather than what’s most suitable for you. You decide based on comparison and not by something else. It’s the simplest way to get someone to be influenced or persuaded into something.
It’s the same in parallel comparison. The parallel comparison effect has been utilized in infomercials for years. When you do a side by side of before and after in weight loss products or one that comes to mind that I was involved in in the early 1990s was a product called Tarn-X, it’s been around forever. It’s a silver polishing liquid.
I remember the parallel comparison of one spoon going into a competitor’s polisher and then another spoon that you would eat with goes in Tarn-X. They’re dipped into the product, then they’re brought up. The Tarn-X one shows instant silver that’s a lot shinier than the other one which is still tarnished.
There’s a before and after comparison and it’s most powerful when you do it almost instantaneously, the less time that is being taken between the before and after effect. If you do it at the same time simultaneously, the contrast effect works well. Especially if it’s in the same sentence or paragraph when you’re comparing price, feeling the temperature of the water, lifting heavy boxes or whatever.
In other words, we will evaluate by comparison, by referencing rather than using more correct or absolute value. What do five pounds feel like on its own? I believe and I know from experience that five pounds feel a certain way if I lift five pounds like a five-pound done dumbbell in the gym. If I lift a 25-pound dumbbell, and then I lift the five-pound at the same time or immediately after, that five pounds feel like three pounds. Even though it says five, it feels like three.
[bctt tweet=”Start high then go low. Don’t edit your success by just assuming you know what the budget is of the buyer.” username=”AlexMandossian”]
The contrast effect is applied in all areas of judgment and you can use it on a day-to-day basis. One example is if you’re at a cocktail party and you talk to someone who you wouldn’t say is attractive, maybe they’re unattractive. They have some flaws. You’re then joined by someone who you would say if you met them on your own and without comparing is someone who’s average-looking.
The contrast effect says that you judge the average-looking person to be attractive than they would be if you just saw them on your own. If you think about how Facebook started if the story is true and it’s not an urban legend at Harvard. If you watched the Social Network movie, it was all about contrast. It was all about showing two pictures and then choosing one. In this case, it’s women at Harvard and students were voting on who was more active attractive side by side. That’s the contrast effect.
In this way, the contrast effect can affect our judgments, your potential buyers and prospects about people, products, market values, the values of other attributes and characteristics. The contrast effect has many applications in sales and marketing and is often utilized by brands to influence customer’s perceptions, what they think or feel about products and services in marketing.
In marketing, we call them offers. The technique can be used by a salesperson to offer either low-quality or contrast it to luxury that’s overpriced alongside with what they ultimately want to buy, to influence the perception as the target product. Maybe the third product which is just right, it’s high-quality or medium-quality and it’s not overpriced.
That is the choice made by the two extreme values. That’s the Goldilocks principle, not too hot, not too cold, it’s just right. The goal with the contrast effect is to utilize it ethically. The way I’ve used it over the years is through high-end pricing.
For example, one of my offers that I make for the Amazon bestseller program. The offer is $25,000 if we write the book for you and we promote it. It’s an Amazon bestseller with certified reviews on Amazon, which is difficult to get, but we do a good job of it guaranteed. If you don’t want the book written, it’s already written and you’re writing it, then it drops down to $5,500.
$25,000 if we write the book and do all the work and $5,500 if we do the Amazon bestseller campaign, I interview with you and we get the bestseller status. We get the certified reviews. If that’s not right, then you get Virtual Book Tour Secrets. It’s the 2.0 version. I made several million dollars from the 1.0 version from 2008 to 2010.
Those are the three offers. The big offer, $25,000, includes the middle and the lower one. The middle one also includes the low one. They get the course for free. One is done for you at $25,000. The other one is done with you at $5,500. The third is do-it-yourself and that’s at $1,000.
There’s a little footnote here if you come through a strategy session or we call it a clarity call, then what we ask for is a $500 commitment for them to make the buying decision within a year. If that year expires, then all bets are off. That’s a non-refundable small commitment and deposit toward their scholarship.
What does that mean? That means the $25,000 program is $30,000. Why is it $30,000? Because if they don’t make a $500 commitment, which is small compared to $25,000, then they are going to come back later on and say, “I want to do this again, Alex.” I have to pay $30,000. I don’t get that $5,000 discount.
If they want to do a Virtual Book Tour where we do it with them and the book is already written, it’s $7,500 normal price, but they get a $2,000 scholarship if they put down $500. Virtual Book Tour Secrets is $1,997 but it pops down to $997 if they put down the $500. That small commitment gets them to decide and all of that is fueled by the contrast effect.
If you’ve ever done strategy sessions, that $500 commitment which I’ve done at physical events for over a decade rings true and gets people to decide because of contrast by getting a commitment. If they don’t commit $500, they weren’t going to be a client, customer, student. We call them members or whatever you call them. Let’s call them buyers. They weren’t ever going to become one.
There are a lot of situations where the persuasion happens through the perception of attractiveness, of risk, high-risk versus low-risk, of cost. All of that is done through demonstration. Sales professionals will exploit this all the time. Let’s say by selling refrigerators. One way on the contrast effect working is not to go from low to high. If I’m selling refrigerators and there are three different prices and three different types of units based on quality.
If I have a $500 one if I have a $1,500 one and if I have a $3,000 one. The first thing I would do is I would say, “I have no idea what your budget is, but I’m going to show you all three models. I’m going to start at the top of the line. It’s $3,000. It does this and that and this. It even has a signature and ice cubes if you want it to do that. It has two freezers. It has special compartments for the meat and the vegetables.” All the features.
I say, “If that’s not in your budget, then I got to take away a few of the few features.” “We can’t sign your signature in the ice cubes. It only has one freezer.” It doesn’t have all the different whiz-bang compartments, but for $1,500, it’s a good value at the bottom of the food chain. There’s no freezer, but it does keep the food cold at $500.
“Which of the three do you believe is best in your budget? Which one should I talk more about?” They may say none of them or they may say I like the $1,500 one. Compare that to if I started low and then went high. I show the $500 one, then I added more features and showed the $1,500 one. I added even more features and went to $3,000, the chances of them buying the $1,500 one is lower.
How do I know? I have tested it in hundreds of case studies on my own. I’ve taught other students to do it on their own as well. Plus, it’s in the science of selling, the profession of selling if you do it that way. Start high then go low, regardless of budget. You’re taking away things and down selling rather than upselling. It’s simple if you will apply these principles in your personal and professional life.
You can ultimately convince your kids to go to bed on time, to make sure their phones are not at the dinner table when you’re eating. I’ve applied it in many ways through the contrast effect. It’s not a principle of persuasion. It’s more like the fuel that makes those seven principles that Dr. Bob Cialdini has created.
Reciprocity, commitment, consensus, authority, liking, scarcity, and then in 2016, he talks about the unity principle where we’re influenced by others inside our group or community. Entire nations have risen and fallen based on that one principle. I believe in all seven principles and the effect of contrast. Contrast effect works by adding more fuel and putting more fire in your presentation. You’re not manipulating. You are ethically influencing, as Bob says.
What is the contrast effect and why is it so influential? I think you know by now. Go back and read again so you get it a second time. You can contrast what you learn the first time by what you learn the second time because you’re not the same person right now than you were before.
I think you would agree. You know new things and you’re in that position where you can go back and relearn it and see what you missed. How the contrast effect works with buying decisions is by using that contrast effect so that you can show different quality levels, different pricing levels, weight levels.
If you show diamonds and you’re comparing the two, a different shaped diamond, depending on what carat size it is, will look different. If you take one shape and compare it to another, the same carat size, a three-carat diamond or a two-carat diamond will look bigger or smaller depending on the cut, which is another contrast effect principle if you’re selling diamonds.
Power Of Three
Remember, when you’re going to offer to price, I love three. That’s The Power of Three, another episode from All Selling Aside. You can go back and read that one. Start high then go low. Don’t edit your success by assuming you know what the budget is of the buyer.
Alexism: Don’t Be Ungrateful
The Alexism in this episode is this. The best thing you can do for the ungrateful in your life is not one of them. What does that mean? Let’s say you just have an irresistible offer and someone says, “That’s too much money.” What’s my response? Here’s what I say, “Compared to what?” What are you comparing it to?
Do you want a Lexus for the price of a Toyota Prius? Do you want a Rolls Royce for the price of a Lexus? Do you want a Lamborghini for the price of a BMW, which is what I own? It all is relative. If you make it relevant, you will have more success more often.
Here’s a quick review of the insights you and I rediscovered. I don’t think anything I taught you in this episode is new. You’re just looking at it through a different lens. Compare my teaching style to others. Is it more consumable? Is it more actionable? I hope it is because that’s the contrast effect I want you to experience.
Here’s what we rediscovered in this episode and none of these insights will work unless you apply them. Number one, you learned what the contrast principle is. We call it the contrast effect. You learned what it is and why it’s so influential. You learned how the contrast effect works with human buying decisions. Remember the good, better, best offers. I gave an example of our Amazon bestseller program.
Finally, you learned among other things, why the contrast effect works with pricing, especially when you start high then go low. Don’t go low and then high. Start high and go low and I gave you several examples of that, especially the refrigerator example.
Remember, these insights will only work for you if you work them. Please make sure you execute what you’ve learned here because this show is for your future to be bigger. It’s for your future to look brighter. I want you to create that future on your terms because ethical influence has that sort of power in your life. Does that sound exciting? I think it sounds exciting to think about.
Speaking of reviews, if you’ve already given me a review on iTunes, then please write down your biggest takeaway on an index card or maybe an a-ha moment that you learned here and then you can go back and review it later. If you haven’t given me a review, then I want you to do this. I want you to go to AllSellingAside.com/iTunes. Write your biggest a-ha moment, your biggest takeaway in the review section of iTunes.
I don’t want a review of the entire show. I just want an a-ha moment from this episode or any other episode. It’ll mean much to me. Once you do that, iTunes will ask you to rate the episode. I hope the way I teach and what you’ve learned has earned me a five-star rating. Only you can decide that.
Will you rate and review this episode? Will you subscribe to iTunes? If you do, then you’ll get a subscription notice from them. You won’t go to my database every single week. All of these take three minutes out of your day, but what you declare could provide you and others reading your review a lesson that they can hold on to.
I have one final gift for you in honor of this episode. That’s a physical copy of my Amazon bestselling book, Alexisms. You’ll pay for the shipping and handling. I pay for the book and we get it to you, even if you live outside of North America. It’s a little bit more, but I lose money on the book. It’s the funnel that you’ll experience along the way, which I call the magic funnel for selling free goods and services. This happens to be a free book that can triple sales.
[bctt tweet=”The best thing you can do for the ungrateful in your life is not one of them.” username=”AlexMandossian”]
You may be able to show $8 on the page, but then you’ll get over $30 when they’re done. You’ll see what I mean when you go to MarketingOnline.com/Book. The most valuable thing is the reliable marketing funnel. I’m talking about in the form of an audio and video tutorial. It’ll show you step-by-step how you can do it once you go through the process. You’ll be glad you did.
I hope our paths cross again in the next episode. Remember, this is the show dedicated to making you an ethical influencer. Plus, bringing more certainty into your life in any exchange in business or marketing. It’s 25 years of sales and marketing know-how, mine and everyone I’ve studied with. Now my students become my teachers. I get rid of all the mistakes. We’ve made 25 years of that and it’s put into 25-minute chunks week after week.
Do whatever it takes to join me because our topic is Give Reasons or Results. This is a great one and I learned this from my good friend T. Harv Eker, who has a coaching program that I helped market with him years ago. If you have reasons, then you don’t need the result. If you have a result, you don’t need the reason.
I encourage you to invite a friend or a colleague on this one. You can bring your study buddy to All Selling Aside because it’s a lot more fun studying with somebody else. Wouldn’t you agree? I can’t wait to connect with you then. It’s going to be a super fun episode. I do want you to join us with a study buddy. You can even refer to them before next week so they can start reading and learning. That’s it. All good wishes.
Links and Resources:
- Alex Mandossian
- Alex Mandossian Fan on Facebook
- Alex’s Friday Live events
- Marketing Online 4-Part Video Training Series
- Alex Mandossian on YouTube
- Alexisms by Alex Mandossian
- All Selling Aside on iTunes
- Alex Mandossian’s free live Friday show
- Ryan Deiss
- Dr. Robert Cialdini
- Richard Bandler
- John Grinder
- Influence: The Psychology of Persuasion by Dr. Robert Cialdini
- All Selling Aside Episode 65: Profit Down-Selling Tips
- All Selling Aside Episode 66: Profitable Up-Selling Tips
- All Selling Aside Episode 36: The Remarkable Power of Three
- Alexisms: Useful Life Lessons from a Recovering Serial Entrepreneur
- Ryan Deiss
- Neuro-linguistic Programming
- Virtual Book Tour Secrets
- Influence: The Psychology of Persuasion
- Kindle – Influence book kindle version
- The Power of Three – previous episode
- Give Reasons or Results – next episode
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