Behavioral Economics? What's That?Written by Steve Gillman
A new science sheds light on some of our most important decisions. Behavioral economics is study of how and why people make money-related decisions. As a science it is relatively new, although some of its findings have been known intuitively by good salesmen and marketers for many years. Much of what has been learned from recent studies, however, has not yet been applied systematically in real world of business. Here are some of things studies have shown thus far: Confirmation BiasWe tend to act economically in a way that confirms current belief. When buying same model of Mecedes, for example, current owners, who presumably already believe in value of a Mercedes, pay $7,000 more, on average, than new Mercedes customers. I'm sure you can imagine value of this knowledge to companies that sell high-priced items. Decision ParalysisStudies show that, given four samples of jam, for example, people actually spent more than when they had twenty to choose from. You may not want to tell customer about all 84 colors he can choose from. Limiting options may be a useful sales technique, according to this research finding. Sunk-Cost FallacyThis phenomena of behavioral economics persists, even after we're confronted with it's illogical nature. We are more likely to attend an event if we paid for ticket than if we got it free, even when we have same information and interest in event. Since money is already spent, it has no relevance to decision, but even seeing this, aren't most of us going to feel a greater loss throwing away a ticket we paid for than one we got for free?
| | ETO ERP Quotations Simplified by Encompix ConfiguratorWritten by Roger Meloy
Encompix ETO ERP software leader based in Cincinnati, OH, announced inclusion of proprietary ETO Configurator as part of company’s product suite. The ETO Configurator is based on Configure One’s concept product and is specifically design for engineer-to-order manufacturers. Unlike most project configurators that can handle only simple configuration challenges, ETO Configurator can handle very complex product rules normally associated with engineer-to-order, project-based, or custom manufacturers. Roger Meloy, Marketing Director with Encompix, note, “The ETO Configurator dramatically reduces time it takes to go from a customer’s initial request for a quote to when product is actually shipped by streamlining and automating much of pre-manufacturing process. This includes creation of quotes, sales and production drawings, routings, and bill of material (BOM.) The data is seamlessly integrated with other Encompix components and is used to create a routing and a complete indented BOM in Emcompix.”
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