Stepps (Practical Value)

5. Practical value (useful)

"...people don't just value practical information, they share it. Offering practical value helps make things contagious. People share practical valuable information to help others......passing along useful things also strengthens social bonds..."
Jonah Berger, 2013

Sharing shows that you care for them and also makes you feel good for being helpful to them.

While social currency is mostly about the information sender, practical value is more about the information receiver, ie
"...it's about saving people time or money, or helping them to have a good experience......sharing practical value is about helping others...... sharing is caring..."
Jonah Berger, 2013

If you think something is a good deal, you are willing to share it with others.

Founded rationality (the psychology of deals as part of behavioural economics)

A way of looking at the intuitive judgement and choice, ie prospect theory

"...the way people actually make decisions often violates standard economic assumptions about how they should make decisions. Judgements and decisions are not always rational or optimal. Instead, they are based on the psychological principle of how people perceive and process information..."
Jonah Berger, 2013

A key plank of the prospect theory is that people don't evaluate things in absolute terms. Rather than evaluate them relative to a comparison standard or reference point. People have different reference points depending on their experiences. For example, older people will tend to have a lower reference point for the prices of goods than younger people, as the have the former experienced lower prices during their life than the latter.

NB
"...people like to pay less, so a drop in prices makes things more desirable..."

Jonah Berger, 2013

Using words like discount, sale, etc will increase demand for a product.

Linked with prospect theory is diminishing sensitivity, ie the same change has a smaller impact the farther it is from the reference point. For example, saving $10 on a $35 deal is preferred to saving $10 on a $600 deal.

Also, deals are more attractive when they highlight incredible value, ie offering a surprise or surpassing expectations.

Availability of products can make a deal seem more attractive, ie

"...restricting availability through scarcity and exclusivity makes them seem more valuable..."
Jonah Berger, 2013

Timing or frequency is important in deals. Putting something on sale can make it seem like a good deal. However, if this is done too often, that sale price becomes the norm or reference point, ie expected price. Similarly, if too many items are on sale, it can reduce purchases.

Putting something sale for a limited time is like making the product scarce and can encourage purchases. Limiting quantity works the same way, eg 'one per household', etc. This can increase sales by more than 50%.

Other effective techniques include restricting access to particular customers, ie rewarding loyal customers with exclusive rates

"...Like restrictions involving quantity or timing, the mere fact that not everyone can get access to this promotion makes it seem more valuable..."
Jonah Berger, 2013

Rule of 100

Whether to give a discount as a percentage or absolute figure depends on the value. Generally if the product is worth less than $100 it is better to use a percentage as a discount as the percentage will give a perception of a higher saving.

Supplying useful information is another for the practical value that people will share, like investment advice, handling health and education issues, recipes, restaurant reviews, etc, ie

"...practical advice is shareable advice..."
Jonah Berger, 2013

To get useful information shared, it needs to be

- packaged well, eg a shortlist focused around a topic

- audience, ie the more information is unique to someone, the more likely it will be shared

NB Need to be careful of sharing 'fake news' and misinformation

Even though there is a selfishness about feeling good when sharing information with others

"...it's also about altruism, the inherent goodness of people. We care about others and want to make their lives better..."
Jonah Berger, 2013

In summary,

- practical value can be shown by

"...saves people money, makes them happier, improves health, or saves them time..."
Jonah Berger, 2013

- need to highlight the advantages of your product, service or idea and package it so that it is easy to pass on to others

- develop news that you can use

 

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