psychology of ownership

Ownership psychology is a powerful marketing tool that emphasizes the fact that with the right usage, the perception of ownership can boost sales. This concept is based on research and findings by psychologists who were trying to find out why people are attached to certain objects even if they don’t know how to use them.

Marketing is all about understanding what customers think and feel about a product or service. If an organization can get them to think they own something, they will be more willing to actually buy it. This is a well-researched phenomenon in psychology, marketing, and economics, whose basic premise is that people value certain things more highly when they own it compared to when they don’t.

The concept is based on a psychological process called ownership heuristic. This is the belief that an object belongs to someone because they found it or discovered it. To put this in simple terms, if an individual finds a pen in a public place, he will believe that it’s his even though he didn’t buy it.

In this case, there is no knowledge about where that pen came from, and yet the person who found it still assumes it belongs to him because he found it. It is a well-known fact that we value what we have more than what we don’t. Most of us know it from experience, but this tendency has also been studied and validated by scientists many times.

Ownership heuristic is used to describe how humans perceive the value of something they own compared to how much someone else values the same thing when they own it. Studies show that people who possess an object find it more valuable than those who do not, and are less likely to sell it at a low price. This effect is also known as the Endowment Effect.

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The Link between the Psychology of Ownership and Marketing

The psychology of ownership states that people tend to appreciate things that are theirs more than other things, even if other things are objectively better or more functional. This suggests that we attach personal value to physical items, and feel a sense of pride when acquiring them.

It is a powerful marketing tool that marketers use to increase brand loyalty and enhance the customer experience. Consumers have an innate desire to feel special, which is why it is important for marketers and business owners to focus on this strategy.

The study of the psychology of ownership shows that customers who feel like they are getting a good deal are more likely to make an impulse buy. When a consumer feels like they own something, they will want to tell other people about their purchase. This can be beneficial for businesses because word-of-mouth advertising is an effective marketing tool.

Customers also want to feel like they are making the best decision possible when purchasing a product or service. By using the psychology of ownership, companies can provide customers with the information that they need in order to make an informed decision.

Leveraging the Concept for Success

Leveraging the concept of ownership makes a lot of sense for marketing when it is thoroughly scrutinized, Someone that already owns something enjoys the benefit of owning it. In order for ownership to be given up, people will need to be compensated in some way for the loss of this benefit. This compensation often takes the form of money, which is why economists have long used the concept of opportunity cost to explain human behavior.

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Some of the most successful marketers, such as Steve Jobs, have understood this idea of ownership, and how to create it. The key is successfully marketing the idea that a product or service is in rare supply, in order to create a sense of ownership among customers.

Many of the world’s most iconic brands are successful because of their ability to make customers feel like they belong to an exclusive club. The first step in creating a sense of ownership is to understand what ownership is and what it means for consumers.

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Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 175 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, and a 2020 Top Crisis Communications Professional by Business Insider. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, was named to PR Week's "40 under Forty" list, is a contributing columnist for Forbes and the New York Observer, and his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations" is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities.