Bye-Now Effect And Why It Matters In Business

The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye-bye” before ordering, the average price per meal rose to $45.

Understanding the bye-now effect

The bye-now effect is a relatively new cognitive bias that is based on two core components.

The first and perhaps most obvious is that the words “buy” and “bye” are homophones. That is, they are words with a different spelling and meaning that have the same pronunciation.

The second component is the concept known as priming – where consumers are exposed to one piece of information that influences their response to subsequent information. In combination, these components result in homophone priming. Here, the brain cannot ignore the alternate meaning of a homophonic word.

The buy-now effect, consumer behavior, and marketing

In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.

The results of this study found that the bye-now effect makes consumers buy more, even when links between homophonic words are non-existent. Further studies have also found that consumers who are distracted or multitasking are also prone to the effect. When consumers are presented with large amounts of information, the brain becomes overloaded and uses shortcuts to decipher the meaning of individual words. Thus, the words “buy” and “bye” are interpreted to mean the same thing.

Businesses who are building a brand can use the buy-in now effect to their advantage. One real-world example is the weight-loss drug Alli –pronounced the same as “ally” – implying that the drug is a useful friend in the weight loss journey. 

In another hypothetical example, consider a resort hotel company called Beech & Son. In this case, the buy-in effect may automatically generate the positive associations of holidaying with a brand despite the lack of supporting evidence.

Limitations of the buy-in effect

  • Potentially damaging to a brand. The strength of the buy-in effect can also be its biggest weakness. “Sam & Ella’s Chicken Palace” is a real-world restaurant where consumers might associate the owners’ names with salmonella.
  • Lack of profitability. Research has found that low-skilled readers are most susceptible to the effect. This may limit the ability to attract consumers with purchasing power.
  • Does not work for uncommon associations. While many consumers will associate the word “ewe” with “you”, it is much more unlikely that the word “you” will be associated with “ewe”.

Key takeaways:

  • The buy-now effect is a cognitive bias where consumers think of the word “buy” when they read the word “bye”.
  • The buy-now effect is comprised of two components that distort cognitive thinking: homophones and priming. In this situation, the overloaded brain automatically makes an association with the alternate meaning of a homophonic word.
  • The buy-now effect can be used to build a brand by generating positive associations with a product or service. Nevertheless, some words have the potential to damage a brand if not chosen carefully.

Connected Business Concepts

As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman since 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

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