Low-ball

The low-ball is a persuasion and selling technique in which an item or service is offered at a lower price than is actually intended to be charged, after which the price is raised to increase profits.

An explanation for the effect is provided by cognitive dissonance theory. If a person is already enjoying the prospect of an excellent deal and the future benefits of the item or idea, then backing out would create cognitive dissonance, which is prevented by playing down the negative effect of the "extra" costs.

Technique

A successful low-ball relies on the balance of making the initial request attractive enough to gain agreement, whilst not making the second request so outrageous that the customer refuses.

• First propose an attractive price on an idea/item which you are confident that the other person/buyer will accept.
• Maximize their buy-in, in particular by getting both verbal and public commitment to this, e.g., a down payment or a handshake.
• Make it clear that the decision to purchase is of their own free will.
• Change the agreement to what you really want. The person/buyer may complain, but they should agree to the change if the low-ball is managed correctly.

Studies

Dr Jay Ho (2014) conducted a study on how low ball can be an effective method to achieve the desired outcome. In his studies, Jay (2014) found the equilibrium of low ball can scientifically determined, using the co-efficient of low ball.

The co-efficient of low ball, is found to be 0.8929. Users of low ball can bargain, with the free will of the others, at an average, 10.71% lower than the original price.

In another study by Cialdini, Cacioppo, Bassett, and Miller (1978), it was demonstrated the technique of low-balling can be used in a university setting. They asked an initial group of first-year psychology students to volunteer to be part of a study on cognition. The researchers were clear about the meeting time being 7 a.m. Only 24 per cent of the first-year college students were willing to sacrifice and wake up early to support research in psychology. In a second group condition, the subjects they were asked the same favour, but this time they were not told a time. Of them, 56 per cent agreed to take part. After agreeing to help in the study, they were told that they would have to meet at 7 a.m. and that they could back out if they so wished. None backed out of their commitment.

On the day of the actual meeting, 95 percent of the students who had promised to come showed up for their 7 a.m. appointment, which means that, in the end, 53.5% of the subject pool agreed to the experiment.^[1]

See also

• Bait-and-switch
• Compliance (psychology)
• Door-in-the-face technique
• Foot-in-the-door technique
• Predatory pricing
• Selling technique
• Boiler room

References

• Cialdini, Cacioppo; Bassett, John T.; Miller, Rodney; Miller, John A. (1978). "Low-ball procedure for producing compliance: Commitment, then cost" (PDF). Journal of Personality and Social Psychology. 36 (5): 463–476. doi:10.1037/0022-3514.36.5.463. 
• “The mindlessness of ostensibly thoughtful action: The role of "placebic" information in interpersonal interaction” (pdf)
• Weyant, J. M. (1996). "Application of compliance techniques to direct-mail requests for charitable donations". Psychology and Marketing. 13 (2): 157–170. doi:10.1002/(SICI)1520-6793(199602)13:2<157::AID-MAR3>3.0.CO;2-E.