Selling services such as theatre or museum tickets in a bundle reduces the likelihood that consumers will use them all up. Promoting their individuality is one of the techniques you can use to combat the Sunk Cost Effect.
Soman & Gourville (2001) Transaction decoupling: how price bundling affects the decision to consume. Journal of Marketing Research.
If you purchase individual tickets to five different gigs for a city-wide music festival, as opposed to buying a full pass (full-access “bundled” pass granting you entry to all five gigs), the chances of you attending each individual gig will be higher. This is even though the end benefit, which comprises of access to all five gigs, is the same! But why?
It’s because the act of physically holding onto a new ticket for each day serves as a clear reminder of the money you spent on each individual ticket. Alternatively, buying a season pass or bundle makes this cost less visible, therefore lowering your obligation to attend the plays simply because you prepaid for all the tickets.
A study conducted by researchers has found strong evidence for this bias (Soman & Gourville, 2001). Using historical purchase and attendance data of a 1997 Summer Shakespeare festival, they found that theatregoers who purchased tickets to a single play were certain to use the tickets. On the other hand, budding theatregoers who had purchased tickets to four plays (“a bundle”) were only 84% likely to use their first-play ticket and only 78% likely to use any of their other tickets, across the four plays. In the words of the great man himself, “go wisely. Those who rush (into buying an all-access pass) stumble and fall…”
This study shows us the impact that a purchase’s physical form can have on its use. The researchers suggest that in the end, it all boils down to our perceptions of costs and benefits; when we buy something that involves just one cost and one benefit, both become noticeable and tightly coupled, motivating us to consume to make up for the cost. However, for a purchase that involves one payment and many benefits, the costs and benefits become less clear and decoupled, and this reduces our desire to consume all of the benefits to make up for the cost.
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
Nuggets are highly-distilled research papers to help you make better data-driven decisionsGet the tool