Mental Accounting

Here's something to help you think about how people evaluate options. You probably engage in this yourself, and customers definitely do when the think about buying things. An entrepreneur has to get into the heads of customers as much as possible. Here's the description in Wikipedia, the free, on-line encyclopedia. I've edited out some of the language as a litte too jargon-esque.

Mental accounting,...attempts to describe the process whereby people code, categorise and evaluate economic outcomes... Mental accounting theorists argue that people people mentally frame assets as belonging to either current income, current wealth or future income...The way a person frames a transaction in their mind will determine the utility they receive or expect. This concept is similarly used in prospect theory, and many mental accounting theorists adopt that theory as the value function in their analyses...There are 2 values attached to any transaction - acquisition value and transaction value. Acquisition value is the money that one is ready to part with for physically acquiring some good. Transaction value is the value one attaches to having a good deal. If the price that one is paying is equal to the mental reference price for the good, the transaction value is zero. If the price is lower than the reference price, the transaction utility is positive...More generally, a mental accounting cost or mental transaction cost, a kind of transaction cost, is the cost of making a useful decision, especially of a consumer making a useful decision to buy, and may set a lower bound on useful price granularity in a market. In a software engineering context the latter phrase refers to the cost to the user of making a useful selection in the user interface, in contrast to a computational transaction cost such as CPU, memory, or network usage

If you're interested in this, read the whole Wikipedia article. And post a comment.

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