So, imagine this scenario: you go to a lottery booth and buy a scratch-off ticket. You’ve just spent (not invested – spent – and foolishly so!) NIS 20 for a ticket that has a fairly poor return on investment.

And you scratch it off and… mazel tov! Wow! You found three in a row and you won NIS 200! Talk about good luck! The man in the booth waits.

What’s he waiting for? Why doesn’t he pull out a crisp NIS 200 note and hand it off to you, wishing you well? Aaah! Exactly! Because if you are like most people, you won’t take the winnings in cash – rather you’ll point to some scratch-off cards on the counter and say “please give me some of those.” (Some people will “prudently” ask for the amount they spent originally to be given back in cash, and spend the rest, only to spend that same amount of money again when the other tickets do not produce a win.) But in any case… You bought the new tickets and now you lost. Those tickets were not as lucky as the first one, and you now are back to your original spend of NIS 20.

Is that so bad? You had 15 minutes of excitement and enjoyment, all for a few shekels? After all, “all entertainment costs money.”

Here’s the “a-ha,” straight up and for easy digestion: the person has not spent NIS 20, but in fact has spent many times what he feels he has spent.

So why don’t people think that way? And the answer is….

The mental buckets.

You and your clients all have mental buckets. Money for which they worked hard on per hour is spent very differently than money found on the street, or money received as a tax refund, or money that you got as a gift from your uncle Selig, who always gives you some money when you go to visit, over your smiling protests to spend it and “do something special for the children.”

It is also the reason why people spend more on credit than when they pay in cash, and why a bank loan is not spent as smartly as cash in the bank. And why people spend inheritance money so quickly and why you may be willing to carry credit-card debt with interest while not touching the money you have saved up in the bank that is getting almost no return. Different buckets, different mental picture! Depending which business you are in, the bucket from which you are trying to drink changes. Are you selling clothes? Food? Business improvement? Enjoyment? Shelter? (Look up Abraham Maslow’s hierarchy of needs. The more you can widen your targeting to cover multiple levels, the better off the consumers investment in your product or service is.) The more correctly you can identify and target which bucket you are most likely to find matching what you offer, the better you can convert potential clients to actual ones.

If tax refund time is coming, and your business feeds (or can be tweaked to feed) off that type of bucket, you can generate lots of business at one specific time of year – when those buckets get topped off. If your business is something for seniors, you will have an easier time on the days of the month the money comes in than when they are three days away from the next check. (Walmart cashes seniors’ checks for free, because if they come to cash the checks they will stick around and buy stuff. A different angle at accessing the bucket – by being the spout! And that’s why sometimes Walmart seems so full of seniors on a seemingly random weekday afternoon) The better you can target a specific customer type and target your entire message to fit like a glove by customizing your offering to that specific sub-market or niche, the closer you can bring them.

In another study, a group of people was asked “how much do you think a meal at [a random made-up restaurant name containing a number] costs, on average?” depending on what the number was, the higher the average estimate. So the restaurant named Q88 had a much higher value perception to the average Joe than the restaurant named Q17. We aren’t as savvy as we think we are! The field of behavioral economics is a fascinating one and these insights can help you both in business and in life, understand how and why you make decisions, and become better at making the right ones.

issamar@issamar.com

Issamar Ginzberg is a business adviser, marketer, professional speaker and rabbi.

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