Three reasons to be optimistic that car sales will bounce back, according to a behavioural science expert
While forecasters are predicting the weakest, new car sales since 2002, entrenched human behaviours dictate we will see a faster recovery than expected, says Behavioural Science expert Dan Monheit.
Monheit digs deep into psychological insights to highlight heuristics from Behavioural Science that offer an insight into the human behaviours rarely factored in when projecting our future decisions.
Go on, you deserve it
By Dan Monheit, co-founder and director of strategy at Hardhat
After almost a year of civil obedience, conservatism, abiding by new rules and limiting our lifestyles, it’s no secret Australians are desperate to treat ourselves. This is due to the Licensing Effect, a cognitive bias that demonstrates our core desire to maintain balance, as we constantly offset our positive acts against our negative ones. Essentially, it’s the ‘because I did X, I deserve Y’ mentality.
“Because I went to the gym this morning, I deserve a burger for lunch.”
“Because I spent the last month hunting down Christmas gifts for everyone else, I deserve to buy something extra special for myself on Boxing Day.”
Since March, our ledgers have been well and truly stacked in the virtuous camp; so not surprisingly, we’re all looking for ways to treat ourselves to equalise. With many of the usual suspects, including international travel, cruises, large scale sporting events and concerts off the table, new cars remain right up there at the top of the list for many. This means that there’s never been a better time for cars – preloved and new – to be the treat that millions of Australians are looking for. Pining for. Hanging for. Right now.
So how can dealers make the most of our innate desire for balance?
Watch for clues – Listen carefully at the start of the sales process for any signs that this purchase might be a treat, rather than a pragmatic, rational purchase. If so, there’s a good chance you’ll have more success with ‘cherry on top’ items like upgrades and optional extras than usual. After all, if we’re going to treat ourselves, we should at least do it properly.
Lead with the treat – Look out for ways to weave the idea of ‘a treat’ into your holiday and new year’s marketing messages. This could be done subtly (“isn’t it about time…”) or more overtly (“treat yourself!” or “You deserve it!”).
To learn more about the Licensing Effect, check out episode 9 of the Bad Decisions podcast.
