The Endowment Effect
The Endowment Effect states that we, as consumers, value products when we feel like we own them. Or at least a part of our life.
For example, when buying a piece of software, you might be considering the pros and cons but when you experience the free trial for 7 days, you get to feel like it’s already yours and instantly start valuing the product more.
How to apply this to your marketing?
- Reframe your copy from impersonal statements like “claim the gift today” to “claim YOUR gift today”. Livongo, a health management company, changed its “Join the program” to “Claim your welcome kit” and saw a 120% boost in registrations.
- In your cart abandonment emails, give them the feeling of endowment and ownership by saying something like “Your product is waiting to come home to you.” To give the prospects a feeling like it’s their OWN product.
- Create virtually interactive experiences where the customer can visualize using the product in his daily life. For example, IKEA’s Place app lets people see how the furniture fits in their homes, endowing them as owners.
TAKEAWAY: Make them feel they already OWN it.
