In case, you have ever signed up for a gym membership, then you are probably well acquainted with the power of sunk cost effect. Every single visit to the gym is actually gripping the hold of sunk cost effect over you and hence restricting you from pulling out of it. The sunk cost effect has come out as a reliable strategy for the Ecommerce marketers to experience increase in sales. Several researches and studies have shown that the users often get lured by the concept and proceed to make purchase. This strategy basically helps you as an Ecommerce owner to decode the customer psychology. We suggest you to follow this basic guide to use the sunk cost effect to raise the Ecommerce sales.
Subscription Services: The primary reason for why subscription services are poplar amidst the visitors is sunk cost effect. Subscription service offers the visitors with the opportunity to make purchases while availing additional benefits such as discount coupons. This is considered as an option to save money while just signing up for subscription. The buyers quickly come in to terms with the fact that they have come across some means to enjoy the services and products. Considering the amount that users have already spent upon the subscription, they mostly come out with positive reviews about the product or service they receive. Just to justify the cost, users make way to posting blog posts, testimonials, sharing reviews over social media.
Branding Benefits: The fact is that people are willing to pay a little extra for the brands that they hold affinity for. Since buyers believe that brands deliver highest quality of products and services, as an Ecommerce site owner, you can always draw benefits through the sunk cost effect. There is a conception in the minds of customers that the products that cost higher are of better quality. Again, when they pay higher price, they force themselves to believe that they bought something that is value for money. This leads them to share their experience with the product or service to convince themselves. The affinity towards the brand, helps in creating a loyal customer base.
Assistance in Upselling: When buyers pay a hefty sum for some services or products, they are made to believe that by paying a little extra they can come across an even more spectacular experience. For instance, when you purchase a personal computer, you are being offered with the option to buy an anti-virus. This would seem a great deal as you want something to protect your system against any threat.
As a whole, this offers great assistance in upselling products. They consider how much they are paying for buying the targeted product and based upon the same decide how much could be spent upon the product offered through upselling. As stated in the example above, the buyer considers the hefty amount invested in buying the laptop. Thinking that the amount is high, the buyer would prefer buying a antivirus so that such a threat does not mess with the laptop and affect the investment.