Tell Me Precisely …
Think about the last time you sold something—maybe something on Craigslist or a yard sale. Chances are you mentally calculated what you wanted for the item and rounded the number up to the nearest common number. For example, let’s say you want $175 for an old table in the basement. You set the price at $200 giving yourself room to negotiate. The buyer comes back at $150 and you settle for $160. That’s $15 less than you wanted. It’s a common tactic, but research suggests you may be leaving money on the table.
A study reported by Steve Martin in the Influence at Work blog suggests, “…people could improve the result of their negotiations by ensuring that the first offer made is a precise rather than a round ended one.”
The study by Malia Mason, Alice Lee, Elizabeth Riley and Daniel Ames asked people to pretend they were negotiating for a used car. When the initial price was set at $2,000, the average counteroffer by the “buyer” was 23% lower. However, when the initial price was a more precise number — e.g., $1,865 of $2,135 — the counteroffers were significantly more generous. A precise initial offer typically generated a counteroffer that was only 10–15% lower.
Do the math! A 23% drop in counteroffer takes you from $2,000 to $1,540. A 15% drop in counteroffer takes you from $1,865 to $1,585. According to the research, you’d make $45 more on the precise initial offer even though the asking price was lower than the round-ended offer.
Here’s how the researchers explain this phenomenon: The recipients of an offer are more prone to believe that the seller put more research and energy into setting a price if it is precise. Buyers think the seller with the precise offer must have good reasons for the suggested price. In other words, the seller with the precise price has more credibility than the seller with the round-ended one.
Copywriting veterans understand the value of this concept. Considering unusual quantifications is a tried and true method for boosting credibility with your copy. Take this ad from Novartis Canada (courtesy of Adpharm.net).
The headline would be much weaker if it said, “Over eighty percent of infant invasive meningococcal disease … ” The “82%” is so precise it must be real.
Here’s another example from Mederma®: “In a recent clinical trial, 77% of subjects noted moderate to significant improvement in scars treated with Mederma … ”
It’s not “about three-fourths” or “almost eight in ten.” It’s 77%. Very precise. Very credible.
When writing copy for our pharma clients, we always try to use precise quantifications. Using an unusual non-round-ended number can increase your credibility by 93%. (Okay, I made that up, but you get the point.)