Examples in practice
Posted: Sun Dec 22, 2024 9:11 am
The new employee
Suppose you have interviewed three candidates for a job opening. In theory, you could continue interviewing endlessly until you find the "perfect" candidate. But in practice, you often choose from this first group if there is a suitable candidate among them. A smart approach here is to draw up a short checklist of three to five crucial characteristics. When a candidate meets these, it is "good enough" - even though theoretically there could be better candidates.
Investments in automation
A classic example: you know you need to modernize your administration system. There are dozens of solutions on the market, each with hundreds of features. It is practically impossible to compare them all thoroughly. An effective strategy is to first identify your two main pain points, and then compare up to three systems that solve these problems. Once you find a system that meets these basic requirements and fits within budget, you can abandon the search.
Pricing Strategy
When setting your prices, you could theoretically conduct india mailing list complex market analysis and examine each competitor. In practice, it often works better to start with a simple rule of thumb: cost price plus a reasonable margin, looking at 2-3 direct competitors. Then you can make adjustments based on customer feedback and sales figures.
Using Bounded rationality to your advantage
By being smart about your offer, you can take advantage of our tendency not to make optimal decisions:
Simplify choice
Customers get overloaded with too many options. By presenting a limited but thoughtful selection, you make it easier to choose. For example, offer three service packages (basic, standard, premium) instead of endless customization options.
Provide clear points of comparison
People have trouble determining the value of something without context. Help them by offering relevant comparisons. For example, if you do consulting work, compare the cost to what it would cost the client not to solve the problem.
Emphasize one core benefit
Because customers cannot process all the information, it is effective to focus on one clear benefit. Instead of a long list of features, highlight the main problem you are solving.
Leverage social proof power
People often make decisions based on what others do because they can't research all the options themselves. Reviews, testimonials and references from similar customers can therefore be very persuasive.
Offer a clear default option
Many people choose the "default" option because they don't want to spend the energy figuring out alternatives. By offering your best option as the default, you make it easy for customers to make a good choice.
Of course, all of this must be done ethically: the goal is to help customers make better decisions, not to manipulate them.
Suppose you have interviewed three candidates for a job opening. In theory, you could continue interviewing endlessly until you find the "perfect" candidate. But in practice, you often choose from this first group if there is a suitable candidate among them. A smart approach here is to draw up a short checklist of three to five crucial characteristics. When a candidate meets these, it is "good enough" - even though theoretically there could be better candidates.
Investments in automation
A classic example: you know you need to modernize your administration system. There are dozens of solutions on the market, each with hundreds of features. It is practically impossible to compare them all thoroughly. An effective strategy is to first identify your two main pain points, and then compare up to three systems that solve these problems. Once you find a system that meets these basic requirements and fits within budget, you can abandon the search.
Pricing Strategy
When setting your prices, you could theoretically conduct india mailing list complex market analysis and examine each competitor. In practice, it often works better to start with a simple rule of thumb: cost price plus a reasonable margin, looking at 2-3 direct competitors. Then you can make adjustments based on customer feedback and sales figures.
Using Bounded rationality to your advantage
By being smart about your offer, you can take advantage of our tendency not to make optimal decisions:
Simplify choice
Customers get overloaded with too many options. By presenting a limited but thoughtful selection, you make it easier to choose. For example, offer three service packages (basic, standard, premium) instead of endless customization options.
Provide clear points of comparison
People have trouble determining the value of something without context. Help them by offering relevant comparisons. For example, if you do consulting work, compare the cost to what it would cost the client not to solve the problem.
Emphasize one core benefit
Because customers cannot process all the information, it is effective to focus on one clear benefit. Instead of a long list of features, highlight the main problem you are solving.
Leverage social proof power
People often make decisions based on what others do because they can't research all the options themselves. Reviews, testimonials and references from similar customers can therefore be very persuasive.
Offer a clear default option
Many people choose the "default" option because they don't want to spend the energy figuring out alternatives. By offering your best option as the default, you make it easy for customers to make a good choice.
Of course, all of this must be done ethically: the goal is to help customers make better decisions, not to manipulate them.