Leveraging The ‘Endowment Effect’ For MSPs
The endowment effect, a concept rooted in behavioural economics and coined by the eminent Richard Thaler, is the theory that people tend to assign more value to things simply because they own them.
If you remember Gollum from Lord of the Rings and how he ended up being infatuated by the ring, you’ll know what I mean. Some practical examples in everyday life could include when someone takes a car for a test drive, the endowment effect starts to kick in. Or if you’ve ever lent someone your lawnmower you’ll know exactly what I mean.
How Can MSPs Use It?
As an MSP owner, you might see this in action if you have ever let a client have a high-end laptop for while, yet that’s not always practical – so how else can you use it?
This potent psychological bias can be harnessed by managed service providers (MSPs) to foster client engagement and loyalty in the relationship – rather than just in objects and 'things'. That is to say that by encouraging a sense of ownership over their managed services, MSPs can enhance client relationships and drive business growth. Here's how:
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