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Why Do People Buy Diamonds?
May 6th, 2015
by Bill Boyajian

At the recent American Gem Society Conclave in New Orleans, the best-selling co-author of Freakonomics and Super-Freakonomics, Stephen Dubner, spoke about the power of incentives and data.  That doesn’t sound very exciting, but the examples he used and the stories he told were captivating.

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Yet in my view, his best “story” was in response to a question at the end of the presentation by none other than Martin Rapaport.  The question: Why do people buy diamonds?  The answer, and I’ll paraphrase:  People buy diamonds because they have a long-standing reputation for being precious.  Not necessarily rare, but quite precious.  Stephen went on to say it is the very reason they are expensive that makes them desirable.

I have to admit that I never thought of diamonds as having a reputation.  Precious yes.  Reputation no.  But the more I thought about it, the more sense it made.  Reputation is based on what people think about something or someone.  And they are usually willing to pay for what they want, be it a product or service.  Hence, the beauty, prestige, and value of diamonds make them a sought-after symbol of love, wealth, status, and success.

Dubner also spoke about how stories are incredibly meaningful and much more memorable to people than mere facts.  So the next time you try to sell a diamond, think about the reputation it carries and tell a fascinating story that will captivate your customer the way Stephen Dubner captivated his audience in New Orleans.



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