Buying anything online or from a TV infomercial these days seems to automatically include a one or more bonus items. (“And if you call right now, we’ll double your order!”)
Would you rather get one (or more) free bonuses when you purchase a Snuggie or Sham-wow? Or would you rather buy them as a set, for the same price? Same items, same price, just presented differently. Which approach has the higher perceived value?
Let me ask the same question a different way, which might make the answer clearer. On Christmas morning, would you rather open one huge box containing all your presents – or lots of smaller boxes?
In a soon-to-be-published book, “Priceless: The Myth of Fair Value (and How to Take Advantage of It),” author William Poundstone explains that the central principle of infomercials is what the economist Richard Thaler calls “Don’t wrap all the Christmas presents in one box,” meaning that consumers value freebies that come with a purchased item more than purchasing the same items presented as a set.
“Thaler deduced that marketers should devote less energy to promoting how absolutely wonderful their product is, and more to breaking it down, feature by feature, or selling several products in one bundle,” Poundstone writes. “The one thing you can’t buy in an infomercial is one thing.” NY Times
By the way, Consumers Union tested the Snuggie and was less than impressed. The Snuggie was hard to walk in, created lots of static electricity, pilled and shed when washed and left your backside uncovered. Watch the video.