Written by Georgi Zai

Value Propositions are central to a marketing strategy, defining an offering’s merits in alignment with customer needs. However, they mostly ignore the “predictably irrational” aspect of human behavior that influences value perception, undercutting their own potency.

What is value perception?

The foundational concept of the Value Function is Reference Point Dependence.

People assess gains and losses in relation to a reference point, serving as their baseline.

While utility theory posits uniform value changes, prospect theory underscores the subjective nature of value, hinging on an individual’s starting position.

For example, take two individuals:

  • one begins with $200 and receives an additional $200,
  • while the other starts off with $800 and also gains $200.

Even though both individuals experience a $200 increase, their appreciation of this gain diverges significantly because of their distinct initial reference points.

Grasping customer’s reference points is therefore crucial. They offer insights into customers’ benchmarks and reveal where improvements would resonate most.

Evaluating reference points as a source of innovation

In much the same way that these individuals’ perceptions differ based on their starting positions, the “Buy Now, Pay Later” (BNPL) model emerged as a response to traditional credit card systems.

For years, credit card companies focused on small upgrades and big advertising pushes, thinking they’d maxed out on major features. Yet, by evaluating customers’ reference points, a key area ripe for innovation became clear.

Addressing the enduring challenge of constant debt and credit management held more significance than anything else. Spotting this need, companies like Klarna stepped in, introducing a transformative alternative.

Shifting the reference point (status quo bias)

A connected behavioral pattern is the Status Quo Bias: a tendency towards consistency, manifesting as inertia or loyalty to past choices. It’s a hurdle for businesses, which, nonetheless, must be respected.

Buy Now, Pay Later trailblazers, while redefining credit management, retained most important credit card benefits—like immediate product access and deferred payments.

Building on this foundation, Affirm further evolved by eliminating late fees, while ZIP reincarnated the popular credit card feature of cash-back rewards.

Another case in point is the Danish neobank Lunar. To overcome the Status Quo Bias, they launched a campaign titled “Try another bank without leaving your old one,” nudging consumers to try Lunar while keeping their existing bank. This encouraged customers to experiment with Lunar – effectively appeasing emotions and softly confronting the status quo.

Additionally, Lunar crafted a second narrative, juxtaposing the unappealing representation of the “Old Bank” (as an older, mannerless male in a suit) with their avant-garde ethos (as a young lover). This strategy is rooted in the Contrast Effect, another cognitive principle that emphasizes how stark comparisons can skew customer perceptions.

Using behavioral biases as game- changer

Understanding behavioral biases isn’t just a theoretical exercise—it’s a game- changer. By tapping into customer reference points, FinTech startups have redefined entire sectors, showing that aligning deeply with psychological nuances can revolutionize offerings.

With this foundation, we’re poised to explore further, and in a next article we’ll delve into the pivotal concept: Loss Aversion, and its role in crafting powerful Value Propositions and shaping perceptions.



This article is the first of a three-part series grounded in Behavioral Economics, and more specifically, the Prospect Theory, where we explore how key behavioral biases are tied to value perception. Using fintech examples, we showcase how understanding these biases can bolster value propositions, granting a marked competitive advantage.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of the Swiss Finance + Technology Association.

Georgi Zai is a senior marketer with 20 years of experience in the financial and IT sectors, and an aspiring product manager. He has had impactful roles at Saxo Bank, UBS, and Falcon Bank, where he’s contributed to launching innovative financial products and applications.

Skilled both in strategy and execution, Georgi also brings a background in UX design, paired with a passion for behavioral science. He shares his expertise as a mentor to startups.

Outside the office, he’s an avid athlete and has completed 16 Ironmans, including the esteemed Ironman Hawaii.