Three Identical Bikes in brand new condition.
A bike still at the store.
Which is the most valuable?
On the surface, they are of equal value, none hold any intrinsic value that should make one better than the others. However, if you were to ask 100 people if they would trade their bike for yours, or if they would sell their bike for more than they paid for it, many would hesitate, if not tell you no.
Logically this makes little sense; why turn down the opportunity to get more than what you paid for an object? You could buy a nicer bike with that money, or buy the same bike and something else. Economist Richard Thaler and his research partner Daniel Khaneman would argue that it is due to the endowment effect, and that this phenomenon is not limited to high value objects. Thaler and Kahneman’s famous mug experiment highlighted the common; though largely unconscious, tendency to place a higher value on objects over which we have a sense of ownership, regardless of the object’s intrinsic value. The bike may not be worth more on the open market, and most people wouldn’t pay the owner their desired amount to part with it, but those realities have little effect on how an owned object is perceived.
Business Is A Mind Game
This is an important insight for brands looking to create desire for their products and drive more conversions, especially if their primary method of selling is online. In a physical retail setting, that sense of ownership can be facilitated by encouraging shoppers to touch, hold, try on, or test out the products. Sales associates in boutiques help create outfits and prompt shoppers to think about where they would wear the selections to paint the picture of what it would be like to own the pieces. Customizing the outfits makes the pieces of clothing more than just the shirt hanging on the rack, they become key pieces of the shopper’s wardrobe.
Similarly, car sales are heavily reliant on test drives not because the shopper needs to make sure
the car works (though that is also important), but because even just sitting in the car allows the shopper to start to build that sense of ownership. Once out on the road, that feeling is further amplified. If you have ever seen the promotions for the 24 hour free test drive, you may now understand more clearly the benefits that the dealer hopes to gain, despite the fact that the car is not available for other drivers to shop.
What about products that are sold online or can’t be housed on a showroom floor? Think about a custom built house; the future owner has nothing to touch, nothing to see except for the architect’s renderings, and yet many buyer’s pay a premium for the house and believe that it is worth more than the market average.
Creating A Sense of Product Ownership
While physical touch and experience are clearly beneficial in creating a sense of ownership, they are not completely necessary if you can stimulate a sense of attachment prior to purchase. One of the most effective ways to do this is through the use of product visualization and visual configuration.
Why do picking out outfits or designing a home create ownership? It is because the buyer feels like they have helped to create and mold the product into something unique that fits their exact specifications. The process of configurating a product, choosing the colors, textures, logos, and features, is an active experience that engages the buyer beyond choosing a brand. Even for products with limited configuration, only choosing a color for instance, the act of exploring and picking the right color stimulates the brain to take ownership of the product and begin to associate it with the buyer’s life.
Once that sense of ownership is established, it is harder to let go, harder to not hit add to cart or find at a dealer. The buyer has invested time and emotion into the product, and now they want to bring it home. Not only do they want to bring it home, but they may be willing to pay more for the exact model that they have configured. More conversions at higher price points? Sign us up.
The benefits of visual configuration are not limited to the psychology of ownership; brands also benefit from creating a more immersive and engaging experience that shoppers enjoy and see value in. Happy customers will generally return, and will likely recommend a brand whose products and experience met or exceeded expectations (and competitors).
Perhaps the greatest benefit of visual is the ease with which brands are able to implement a variety of tools and experiences for their customers. With ATLATL Visual, our streamlined implementation process and web based visualization software allow brands to quickly build and launch an immersive customer experience across product lines. With our self service offerings, your in-house or agency team has the freedom to manage, update, and revise the experience and products offered as needed.
Ready to see psychology at work? Check out our latest demo and explore how you can create an ownership experience today.