The "Diamond Loophole": The Power of Psychological Pricing

Every marketer dreams of crafting a message that sticks. You’re about to discover how a single ad campaign did more than stick…

It shifted cultural paradigms and set new financial standards.

But how did a slogan initially perceived as bizarre redefine luxury for generations?

And what secret weapon did a marketer use to make an extravagant expense seem like a necessary tradition?

Welcome to the world of the diamond engagement ring.

Today’s marketing loophole is responsible for every cringe engagement video you see on the internet:

Yup. People make these awkward videos and buy diamond rings in the first place because of a powerful marketing campaign by the De Beers diamond cartel in South Africa.

In fact, the genius marketing trick I will share with you is why you have to fork over 2 months’ salary for a ring…

Something I and every other man on planet Earth are not happy about. 

You see, nobody bought diamond rings for engagements back in the day.

Nobody bought diamonds at all. The stones were so rare that only kings and queens could afford them.

That was until the De Beers diamond cartel stumbled on a huge hidden supply of diamonds.

The cartel didn’t know what to do with all these extra diamonds, so it started a campaign to make people associate diamond rings with engagement.

This was a tough sell. Most people had never bought a diamond before. 

Honestly, the whole kneeling on one knee with a ring was probably seen as creepy.

So the De Beers diamond cartel hired copywriter Frances Gerety to help out. 

Gerety’s campaign not only linked love and marriage with buying a diamond ring…

But it established exactly how much money a ring should cost:

Remember, in the past, diamonds were only available to kings, queens, and silly rich people with wigs.

The average person had never bought a diamond before and had no idea what they were supposed to pay.  

To help people out, Frances Gerety used what I call the “diamond loophole” to set a price.

This is commonly referred to as “the anchoring effect.” 

It means that people use the first bit of information they hear about something as a reference point (or anchor) in which they judge everything else. 

In the case of diamond rings, Gerety and De Beers set two months' salary as the “anchor”...

Flash forward a few decades, and every man on earth is piling away two months' salary to buy their ‘loved one’ a ring. 

Does this “anchor” have to be logical?

Heck no! 

If the ad used one month's salary instead of two, that would be the price people would pay.

Anything above that would be a rip-off.

Anything below would make you look like a total cheapo. 

Again, the anchor doesn’t have to be logical. It can be plucked out of thin air.

But when you set it correctly, it will determine everything else about how customers think about your product. 

First impressions matter - in life and marketing. 

Happy Marketing, 
Evelio

Ps. In the next email, we'll discuss a deceptively simple yet incredibly powerful marketing technique that has the potential to transform the way your customers perceive your brand forever.

This isn't just a game-changer; it's the ultimate move in customer psychology that could ensure your brand is remembered more fondly than ever.

You won’t want to miss out on mastering this essential marketing strategy!