Lowball Technique

Definition

The lowball technique is a persuasion strategy where an individual is first offered a very attractive deal or agreement, only for the terms to be changed later, making the deal less favorable. This tactic takes advantage of the commitment that the individual has already made to the initial offer, leveraging their psychological investment to maintain their compliance even when the deal worsens.

5 Must Know Facts For Your Next Test

1. The lowball technique relies on the principle of commitment; once individuals commit to a deal, they are more likely to stick with it, even if the terms change unfavorably.
2. This technique is commonly used in sales and marketing, where customers may initially agree to a low price before hidden fees or conditions are introduced.
3. Research has shown that the effectiveness of the lowball technique is partly due to cognitive dissonance; people may rationalize their decision to accept worse terms because they feel committed.
4. It can create a sense of obligation; once someone agrees to an initial offer, they may feel pressure to comply with the new terms to avoid feeling like they have backed out.
5. Ethically, the lowball technique raises concerns as it can be seen as manipulative, making individuals feel deceived once the original offer is altered.

Review Questions

• How does the lowball technique utilize the concept of commitment in persuasion strategies?
  • The lowball technique taps into the idea of commitment by first securing an agreement from an individual on an attractive deal. Once that commitment is established, even if the terms change and become less favorable, people are often reluctant to back out due to their initial investment. This creates a psychological pressure that keeps them compliant with the new terms because they don't want to feel like they've gone back on their word.
• In what ways can the lowball technique be applied ethically in sales practices, and what should sellers consider?
  • Sellers can apply the lowball technique ethically by ensuring transparency and honesty in their initial offers. It's important for them to provide complete information about any potential changes in terms upfront. By doing so, they can maintain trust with customers while still utilizing commitment as a persuasive tool. Sellers should consider how their practices impact customer satisfaction and long-term relationships rather than focusing solely on immediate sales.
• Evaluate the potential consequences of using the lowball technique in marketing strategies on customer loyalty and brand reputation.
  • Using the lowball technique can lead to immediate gains in sales but may ultimately harm customer loyalty and brand reputation if consumers feel misled. When customers discover that they were subjected to a bait-and-switch tactic, they may become distrustful of the brand and share negative experiences with others. Over time, this can create a backlash against the company, leading to decreased customer retention and damaging its reputation in a competitive market.

Related terms

Commitment: A psychological state where an individual feels obligated to follow through on a decision or agreement they have made.

Foot-in-the-door Technique: A compliance strategy that involves getting a person to agree to a small request first, which increases the likelihood they will agree to a larger request later.

Cognitive Dissonance: The mental discomfort experienced when holding two or more conflicting beliefs, values, or attitudes, often leading individuals to change their beliefs to reduce discomfort.