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Is 2 Minutes a Good Read Time For This Blog?

It depends. What was the last number you can remember hearing?

I taught a course years ago about the book 'Priceless' which was written about the human propensity to lock into a number they've seen recently 'recency bias' and then decide if the next number is good or bad.

Example, your spouse says today it's going to be 75 degrees. Then you are asked if 80 is a good score in golf. Because 80 is higher than 75, you will feel optimistic and are more likely to defend your belief that's a good score -- compared to a similar situation where you'd just heard that 150 people were hurt in a plane crash, and the asked if 80 is a good golf score? In that case you'll be less optimistic, less likely to argue that's a good score.

These numbers heard before the question have nothing to do with each other, yet they have a huge impact on how information is processed and perceived, and more importantly - time had very little impact. You hear the number earlier in the day, and that's the last number you heard, it will still influence you later in the day.

Are rates of 6% good? It depends.

With rates we were repeatedly told rates were at all time lows, 3% was used in media and that became the baseline. When rates went to 4 or 5% that is perceived as negative. We've now had a few quarters of higher rates, and notice how media has been talking about the 'high' and 7% is often thrown around. That is resetting the minds of consumers, and when rates are 5.9% they anchor on the prior numbers to determine if it's a good or bad rate.

TIP: Consumers don't understand the financial impact of rate unless someone can explain it to them and one way to do that is to be mindful of this dynamic in your communications.

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