What Is The Low Ball Technique And Does It Work?
By Sarah Fader
Updated December 14, 2018
The low ball technique is a persuasive tactic that is frequently used, directly or indirectly, in selling a variety of products. Traditionally, the salesperson offers an item at a below market or average market price to the buyer. The buyer may agree to make a purchase or come close to committing to a sale. However, the seller will then increase the price without warning.
What Is The Low Ball Technique?
The low ball technique may appear to be a "low tactic," but when done artfully it has been known to work in some markets. If the seller can carefully balance the objectives of (A), make the initial request attractive enough to get a "YES" from the client and (B) not making the second inflated price so over the top that the customer feels cheated out of a good deal.
The low balling technique is very often used poorly, particularly at "second hand" selling locations, such as a used car lot or an unscrupulous real estate firm. In this case, the client feels that the seller has been dishonest since he misrepresented the price and product by suddenly changing the price on him.
However, companies can also use the low ball technique in more subtle ways, to get the customer interested in the deal and then simply accept that every good deal has a few tacked on fees. For example, the service provider who quotes $49.95 a month but then adds service charges and miscellaneous fees. Or the same would be true in selling a car or a property; additional fees, like finder's fees, commissions, documentary fees, and so on could be added on without much protest. The buyer sees that the final price has increased but has tolerated it because the price differential was not great, and there was also a logical reason for the price increase.
Another example of the low ball technique might be where a seller badgers the customer into a "buy it now or else…mentality" where the customer has to pay more money for the same deal if he doesn't buy within a suggested timeframe. A poorly executed low ball move would be to simply increase the price of an item after the customer shows interest and without much logical explanation. In this scenario, the customer senses that the seller has exploited his need and capitalized on it by hiking the price.
A customer will then usually back out of the deal. However, in the case of some companies (especially companies that handle expensive resources) companies can afford to hike the price and customers will pay it because of a lack of market competition. In fact, some states and federal governments have passed laws protecting consumers from the similar tactic of "price gouging," usually involving companies handling in-demand resources
A History Of Low-Balling In Sales
According to Study.com, the low ball technique was first officially demonstrated by Robert Cialdini in 1978, although it's safe to presume it has been used historically, well before this milestone. A study of human trade over the centuries suggests that exploitation and taking advantage of desperate buyers is a common psychological tactic used by individuals and or companies that want to increase their profits.
The psychology behind the low ball quote is that of cognitive dissonance. If a person already wants to buy the product and shows interest in it, and is already anticipating the future benefits, he would not be motivated to back out of the deal-even if he wasn't thrilled about the price. This is the principle of cognitive dissonance at work, which refers to the mental comfort of a person who struggles to understand two opposing and disharmonious elements. Mental stress results from these two opposite beliefs and so reducing that stress is a natural motivator. Therefore, in sales, giving the customer a reason to avoid that cognitive dissonance would prompt him to commit to a sale. This is an especially effective technique if the seller downplays the extra costs and highlights the benefits of the product.
The studies done by Cialdini proved that groups of people would fall for the low balling technique if they want to avoid cognitive dissonance that comes from backing out of a commitment they made. Simply Psychology discussed the Cialdini studies and the concept of commitment. Cialdini asked students if they would like to participate in an experiment that took place at seven A.M. Most subjects refused. However, in a subsequent study, another group was told of the experiment study, without learning of the time. When they did learn of the time later and were given the option to drop out, almost all of the subjects came anyway-a 95 percent attendance rate!
So it's not just the advantage of receiving the benefits of the product that motivates a client to buy, even in inconvenient circumstances. In many cases, the desire to decrease cognitive dissonance can result from simply not wanting to go back on a deal the buyer already made. He doesn't want to break a commitment and will find it hard to say no, after giving a resounding yes-to the seller and himself.
How To Make The Low-Ball Technique Work
If you're having difficulty understanding the technique or getting it to work on your customers, consider the following steps in mastering the dialog.
- Make sure to make an attractive initial price and pitch for the product. You must be confident the buyer will go for this price.
- Get a commitment from the customer, verbally AND publicly in some way, such as a down payment or a contract.
- Change the agreement (always within the confines of the law) and then point out the benefits of the deal, the necessity of the price increase (as in, it's mostly out of your hands, or that you don't make much money from the deal anyway) Downplay the additional costs as something small the customer can afford with ease.
- Eliminate pressure or negative feelings. Always let them know it's their decision entirely.
Observing The Low-Ball Technique In Other Walks Of Life
Even outside the context of sales, you may occasionally notice people using a similar technique, otherwise known as "compliance." Even in interactions with family and friends, persuasive tactics are sometimes used in everyday conversations. For example, techniques designed to gain cooperation from another subject after persuasion, like a child asking his parents for a favor, a student wanting a better grade from his teacher, or any "favor" that suggests influencing an outcome later on.
Universally, low balling has a negative connotation, since the seller or manipulative party seeks to guide the subject to a specific decision, and not necessarily an open-ended one based on what the subject wants. In the case of a real estate agent, his technique might be to price the house at a lower bargain price for the interested client and then increase the price to actual market value later.
Some have even wondered whether low balling techniques are abusive forms of persuasion since they are often used to take advantage of a person who is not experienced in dealing with sales or a certain industry, like cars, or real estate. Manipulation of a person without that conscious recognition (as in, the person knows what's happening and accepts it) could be called unethical. However, it is rarely declared illegal.
The only exception might be in specific legal situations, such as lawyers that try to lowball jurors to get a favorable verdict. Typically a judge will challenge and strike any comments from the record that suggest the lawyer is flattering the jury or trying to establish his authority over the jury.
While using techniques like the low ball strategy may be primarily reserved for business transactions, it is fairly common for people to be manipulated into making impulsive decisions. Companies rely on these so-called predatory strategies to make income, at the expense of the consumer. This can lead to a multitude of problems in person's family life, especially if it involves falling into debt, taking part in risky behaviors, or suffering from anxiety and depression.
If you or someone you know who is suffering from depression because of debt or reckless behaviors, there is always the option of seeking professional treatment. Unlike 20 years ago, today's online therapy option is affordable and convenient. You can webcam chat, phone chat or text chat according to your schedule. If you find a doctor or counselor you like, you can arrange to meet them at their next available time.
This is a breakthrough in affordable counseling and has allowed many clients to come forward and seek professional help for their problems. This includes many clients who would otherwise have never considered getting help before, whether because of transportation issues, high costs of in-person sessions, or shyness. The option is always open to you (or your loved ones). Make a choice now and make sure tomorrow is a better day.