Understand Your Buyer > How To Convert > The Token Effect
What is it?
When you exchange money for tokens it distorts your understanding of value which can have both positive and negative impacts.
Why does it work?
It works because we are used to equating money with purchasing power – the larger the number the better.
But a larger number doesn’t always mean a lot more value. Let me explain; It costs 1000 tokens to buy a toy at the fairground. The toy costs £5, but you may well spend £15 to “win” enough tokens to get the toy for “free”.
This also happens when you travel. If you exchange £100 for 1,732,895 Indonesian Rupiah it feels like you somehow have more money. The units of value are changing and you equate more units with more worth, 1.7M of anything is a lot… right?
How can you use it?
If you allow buyers to acquire tokens, points or credit, then using much larger numbers will make your buyer perceive they are getting more.
Exchanging £10 for 1000 points can feel more enticing than exchanging £10 for 10 tokens as in the first example you are “getting more”.
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