Here’s How “Product Context” Helps You Sell More Stuff Online

Posted: August 26, 2013 in Artist Corner
Tags: , ,

by Derek Halpern | Follow Him on Twitter Here

Product PiecesThere are triggers that persuade people to buy…

…and when you know how to activate them, it can be the difference between making or losing the sale.

Today, I’m going to tell you about one of my favorite buying triggers.


Is $5 Always Worth $5?

The short answer is, no.

Back in the 1980s, two researchers, the nobel laureate Daniel Kahneman and Amos Tversky, stumbled on this fascinating facet of human buying behavior:

When people make purchases, they create a product context before pulling the buy trigger.

What’s a product context?

It’s the facts that surround your product (and yes, smart online marketers know how to take advantage of this to sell more stuff).

Question is how does it work?

Here’s How “Product Context” Persuade People to Buy

To understand how it works, let me take you back to the psychological research…

Kahneman and Tversky posed this question to research participants:

Imagine you’re about to purchase a leather jacket for $125. The salesman informs you that the product you wish to buy is on sale for $120 at the other store. It’s 20 minutes drive away. Would you make the trip to the other store?

How many people do you think said yes?

Not many – only 29% of the research participants agreed to make the drive.

…But here’s where this experiment got interesting. When Kahneman and Tversky changed the product and price, more people agreed to make the drive for $5.

Imagine you’re about to purchase a calculator for $15. The salesman informs you that the product you wish to buy is on sale for $10 at the other store. It’s 20 minutes drive away. Would you make the trip to the other store?

How many agreed to make the drive now? Sixty-eight-percent. What a huge increase, right? What’s going on here?

The context was different. In the first example, $5 was 4% savings, whereas in the second $5 was 33% savings. Sure, it was the amount of money, for the same amount of time, but the % saved – the context – is what made people act.

Now let’s look at a real-life example of context at work.

How Amazon Uses Context to Sell Stuff Online

Remember, people tend to accept offers when they’re saving a significant percentage of money on their purchase. To see how this works online, look no further than

If you take a second and load up one of their product pages, you’ll notice two different prices: list price and the price you pay. You’ll also see another number right below the price you pay which says “You save.”

How does this relate to context?

Well, Amazon constructed a scenario where people believe they are AT the store with the better price. There’s no driving necessary. You see how much you’re saving and think you’re getting the good deal right here and right now.

This is a great tactic. It prevents your customers from shopping around at competitors. However, let’s say you don’t want to discount your products. How else can you use context to get sales?

Demonstrate Tremendous Value

When you demonstrate the amount of value people get from your product, they’ll often find that it’s cheaper than the price you’re selling it for. This essentially creates a discount without offering a discount.

For example, let’s say you’re about to launch a brand-new $97 product. In it, you’ll include an ebook, 2 hours of recorded audio, and three 30-minute videos. Additionally, you’ll include two 1-hour group telesminars.

Now let’s say your hourly rate is a modest $50. From the start, you can tell people that they’re getting 5.5 hours of your time PLUS an ebook. To get equivalent help in consulting, it would cost, at the least, $300, so $97 ain’t so bad.

Or, keeping with the Amazon example, this means your list price is $300, the “price that people pay” is $97, and the “you save” amount is $203. However, the best part is, you created a discounted context instead of actually giving a discount.

Offer A Sales Bonus

If you’re selling stuff online, a common way to create a persuasive context is to offer a bonus. However, if you’re including a bonus, your prospects must consider it significant for it to work. Let me explain.

In the research experiment, there were two feelings that the research participants felt. On one hand, $5 was 4% savings, whereas on the other, $5 was 33% savings. The latter seems more significant than the former, which is why it was more persuasive in testing.

Now, the question is, what’s a significant bonus online?

When dealing with digital products, many marketers often include bonuses that total to more than 100% of the purchase price.

It seems a little crazy, but when you’re working with digital goods, the marginal cost of distribution is zero. Instead, it’s all about how people perceive the bonus. To read more about that, check out my article on the power of perception.

The “Context” Marketing Action-Plan Checklist

Here are the four ways you can use context to sell stuff online:

1. Compare your price to higher priced alternatives because it will help you create the context that you’re offering the best deal.

2. Demonstrate your product’s value. Instead of merely stating the price, go into detail about what people will get and explain how much it’s all worth.

3. Offer a bonus. If you don’t want to discount your price, offer a bonus with a marginal cost of zero. This works exceptionally well… especially when you use perception to build up price expectations.

4. Offer a physical bonus. If you’re selling a digital product, chances are you’re working with a high profit margin. You could use some of that profit to offer a physical good. This helps you sell because people are better at assigning value to things they can touch.

Here’s the section of the blog post where I ask you to leave a comment. Have you used context to sell stuff online? If so, how did you use it? Please feel free to provide links to your work. This is a great opportunity for some self promotion!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s