You’re Not as Rational as You Think
We like to think of ourselves as straight-thinking. Rational. Nobody’s fool. Especially when it comes to money, we tell ourselves we can’t be tricked, that we can spot marketing lies from a mile away.
But what if I told you that you can be tricked? Easily. Every day.
Businesses do it all the time. They’ve studied how the mind works and how to use it against us. They know how to make us buy what we never planned to buy and spend more than we intended.
They do this by targeting a part of our brain that psychologists call automatic thinking, or System 1.
System 1 is fast. It uses shortcuts and jumps to conclusions. It fills in blanks, relies on intuition, and doesn’t always think things through.
System 2, on the other hand, is slow and deliberate. It’s what you use when solving a maths problem or planning your finances.
Guess what? We use System 1 far more than we think.
Quick Demo
Let’s test it.
When you read text, your brain fills in what it expects to see. If you saw “THNIK” and read “THINK”, your brain just edited your reality based on intuition and convenience.
Let me give you another demonstration: A bag and a book cost ₦1,100. The bag costs ₦1,000 more than the book. How much does the book cost?
Automatic Answer: ₦100
Correct Answer: ₦50
Your System 1 brain got it wrong.
Your brain uses automatic thinking in all areas of life. We make assumptions, we think we saw/heard something, but it was something else. We fall for the appearance of a situation, rather than its actual substance. Businesses design their websites, advertisements, copywriting, marketing, sales, and entire user experience to appeal to that error-prone, fast System 1 thinking. They use it to sell to us, shape assumptions about their products, and influence us to buy more.
How They Do It
Let’s look at some of the tactics businesses employ to get you to buy more, with examples:
Anchoring: The Power of the First Number
Anchoring is when the first piece of information sets the tone for everything else. This information is called the anchor. Once that anchor is set, all subsequent decisions are made in relation to it. This is why job seekers are told never to give the first number during salary negotiations. It’s also why lawsuit amounts are always ridiculously large at first, because once the negotiations start, everyone involved almost always dances around that first number.
Outrageous Price First
When a business shows you a product that was ₦120,000 and now says, get it for, now says ₦85k, 30% off. Your brain doesn’t evaluate ₦85k separately. It compares it to the initial ₦120k. It makes you feel like you’re getting a bargain. Even if the ₦85k is still overpriced, and ₦120k was outrageous to begin with. You’re familiar with this one because market sellers do this a lot. They quote an outrageous price, so that when you negotiate, you both settle somewhere in the middle.
Restaurants place extremely expensive items at the top of the menu. Not because they’re expecting to sell it often, but they do it to make everything else look affordable. It’s supposed to create a sense of relief within you. To make you feel like, “oh, thank God it’s not so expensive”, “Thank God there are cheaper options”.
E-commerce sites like Jumia and Temu do this all the time, especially Temu with their “₦68,000, now ₦25,000 after discount was applied.“. Even when you consciously know that it’s a trick, it still works, because it bypasses the rational part of your brain.
The Decoy Effect
Even tech companies do this with their pricing tiers, too. You’d see the Basic plan at ₦5k, the Pro plan at ₦15,000, and the Premium plan at ₦50,000. The premium plan probably just has two or three extra features more than the pro plan. What they really want is to get you to buy the Pro plan. The premium plan is just there to make the Pro plan seem reasonable.
Now that we’ve seen how your first exposure to price anchors you, let’s look at how familiarity pulls you into believing in a brand.
Your Brain Has Been Hacked
The idea that we are not always in control of our buying choices might be scary at first or even shocking, but once you start to see it, you can’t unsee it.
Anchoring, Availability. Familiarity, Scarcity, and Trust are all mental shortcuts that companies use to nudge us towards choices we didn’t plan to make.
Their tricks don’t end here. In the next part of this series, I will cover more psychological tricks that companies use to get us to buy more, and what can be done to defend yourself against them.
Think about the last time you bought something because it was popular or because the first price seemed high–did you notice this mental shortcut in the moment?