We’ve just come through the holiday season and retail sales were up about 8% from a year ago according to MasterCard. It’s probably not a stretch for me to assume that all of you reading this took part in holiday shopping if for no other reason than to take advantage of the great sales that were so prevalent.
There is something about a sale that grabs our attention and there are two primary reasons we love to take advantage of the opportunities retailers present. Contrary to what you might think, it’s more than just saving a little cash.
First, we hate the thought of losing. That’s the principle of scarcity at work on us. We’ve become so conditioned by sales that we know when we don’t buy something on sale we’ve most likely overpaid; i.e., lost money. Amos Tversky and Daniel Kahneman’s research shows people feel the pain of loss more than they do the joy of gain. In fact, most people experience the pain of loss anywhere from 2.0-2.5 times more than the joy of gaining the same thing. In other words, as much as we like saving $100 we hate the thought of losing $100 much more. Again, not taking advantage of a sale equates to losing.
However, as much as we like a sale we do know there are plenty throughout the year so what’s a retailer to do to get us to take action immediately? When you throw in some kind of limit our desire for the sale item is greatly heightened. Think about it; if there were not a time limit (“Sale ends Sunday”) or limited supplies (“While supplies last”) we wouldn’t be as quick to take advantage of the bargains. After all, it’s also quite natural for many people to procrastinate.
But why is scarcity such a motivator? According to Robert Cialdini’s best selling book Influence Science and Practice, it has to do with how we’re wired, i.e., our evolution as a species.
“One prominent theory accounts for the primacy of loss over gain in evolutionary terms. If one has enough to survive, an increase in resources will be helpful but a decrease in those same resources could be fatal. Consequently, it would be adaptive to be especially sensitive to the possibility of loss.” (Haselton & Nettle, 2006)
While some things may be changing rapidly (human knowledge is doubling every 12 months), human beings evolve slowly, very slowly. Most people probably don’t live in life and death situations like humans did thousands of years ago but our brain wiring is essentially the same. So that wiring that was designed to help us survive still exists today, only it’s tapped into in many ways that are not related to survival.
How does this impact you? In two primary ways:
If you’re a consumer make sure you don’t reflexively act on things. While the sale may look too good to pass up do you really think it’s the best sale there has ever been? Do you think it will never come back around again? The answer is most likely no in both cases. So take your time on major purchases and don’t be so quick to jump just because you see something is 30% or 40% off. It’s very likely there will be President’s Day, Memorial Weekend, Fourth of July, and Labor Day sales that are every bit as good if you can be patient.
When you’re a persuader look for legitimate scarcity in your product, service or offer. There may not be one thing that is totally unique but perhaps there is some combination of features or benefits that can’t be gotten elsewhere. Tout the combination to alert people to the uniqueness. And if there happens to be a limit on time or quantity make sure you mention it because it will increase the odds that someone will say yes to you.
In order to be a master when it comes to persuasion always look for the principles of influence that are naturally available. Then use those principles of honesty highlight what you’re talking about. Doing so will significantly increase your odds of getting to yes.
Brian Ahearn, CMCT®
Chief Influence Officer
Chief Influence Officer
influencePEOPLE
Helping You Learn to Hear “Yes”.
Helping You Learn to Hear “Yes”.
I’ve been on the road a lot lately. In a recent stretch I was gone Monday through Thursday or Friday four weeks in row. When I returned from a recent trip, my wife, Jane, had gone to Myrtle Beach to spend time with her family. I was left with a daunting task: two-dozen shirts to iron!But there was a problem; our iron was ruined not long ago when I dropped it on the floor. Before I could start ironing I needed to buy a new iron, something I knew nothing about. I’d like to let you in on my thought process as I made the purchase. I don’t think I’m much different than any of you reading this so perhaps it will help you understand why you do what you do when it comes to certain purchasing decisions.Let’s start with this fact – the vast majority of our decision-making takes place at the subconscious level. Martin Lindstrom, author of Buyology (yes, I spelled it correctly) contends non-conscious forces drive upwards of 85% of our decision-making. People who’ve been in sales for any length of time understand this and that’s why it’s often said, “People buy based on emotion then justify with logic.”My first decision was where to go to get the iron. I ended up at Target. I guess I could have stopped by Sears, Wal-Mart or some lesser-known stores but I didn’t even consider them because prior experiences at Target have been good, their prices are reasonable and Target is burned into my subconscious more than the other stores because of their advertising. After asking a clerk where I could find irons I ended up in front of shelving full of irons ranging in price from $12.99 to $89.99. Immediately I knew I would not spend anywhere close to $12.99 because having some cheap irons in the past and using them at hotels is frustrating. I also knew there was no way I’d pay anywhere near $89.99 for an iron because ironing as little as I do doesn’t necessitate one that would be used in a laundry mat.As I looked at all the different the models I saw several options from Shark. I’d heard of Shark and seen some commercials and remembered their products seemed unique although I couldn’t recall specifics. Other than glancing at some other brands I really gave all my attention to the Shark models.As I looked at the Shark irons they did look different than all the others and the price range was reasonable with the low-end model for $29.99 (Lightweight Professional) and the top of the line model for $49.99 (Ultimate Professional). There was one other model for $39.99 (Professional Steam Power).At this point I did what most discriminating shoppers do – I compared. Did I need 1800 watts, 1600 or 1500? Was the 9.5 inch base, 9.0 or 8.5 best for me? Does it matter that one is 3.6 lbs., 3.3 lbs. or 2.0 lbs.? Decisions, decisions, decision, all of which I knew nothing about. That led me to one more decision criteria; what do people say about each model? That was easy enough to look up on my phone as I stood in the aisle. Each iron had 4.5 stars, some with more than 100 reviews. I felt comfortable because people just like me (principle of consensus) thought highly of each model so I felt better and better about my potential Shark decision.With all that going on in my head which model did I buy? I bought the $39.99 model, which is what most people would do. I remember thinking, “Do I really need the top of the line and will those subtle feature differences be worth it?” I also thought, “If I buy the low-end model will I regret it because maybe it turns out a be a little cheap?” The middle seemed to be a safe alternative. Most companies offer three product models (cars, shoes, bread makers, etc.) exactly because of the thinking I outlined above. Some people will want the top of the line, some will default the cheapest but most people will buy in the middle. If a company removes its high priced model the average sale will drop because some people buy the top of the line but also because more people will shift from the mid-range product down to the lowest priced model. Pay attention next time you’re in a store and see if you begin to notice the three choice offerings.Although I’m in tune with buying, selling and psychology, I must admit, it was an interesting exercise to really pay attention to what was driving my purchasing decision. I got home and used that iron for three hours as I knocked out all the shirts at once. I must say, I was pleased with my purchase – at least that’s what my mind told me.
Brian Ahearn, CMCT® Chief Influence OfficerinfluencePEOPLE Helping You Learn to Hear “Yes”.
There’s a Seinfeld episode in which Kramer orders some Cubans. Jerry thinks he’s ordering cigars but Kramer actually brought three Cuban men over so they could roll cigars for him. He didn’t get cigars because they were illegal.When America cut ties with Cuba after Fidel Castro took over, it became illegal to do business with Cuba. Whenever something is banned or difficult to get all of a sudden people want the banned or difficult to get things even more. That’s the principle of scarcity at work on the human psyche. Here are just a few examples.There was a point in time when you could only get Coors beer west of the Rockies. As a kid I remember my dad and his brothers talking about how good Coors was when they could get it. None of them drinks Coors now.Yuengling is another example of a beer that was hard to come by, at least in Ohio, until recent years. I recall traveling with a friend who made it a point to stop at a conveience store in West Virginia just to buy a case of Yuengling. Twinkies started flying off the shelf when it was announced Hostess was discontinuing the cake-filled treat.Back in 2001, Oldsmobile exceeded it sales goal by a higher percentage than better-known brands such as BMW, Kia, Porsche and many others, when it was announced the car line was being discontinued.I’m a Scotch lover and asked an expert at a tasting event his thoughts on aged Scotch (25 years and older). He said he tries a glass but doesn’t buy a bottle because age doesn’t necessarily mean better taste. He said the reason the price is so much higher for aged Scotch is just because there’s less of it. Why do we naturally feel compelled to take advantage of scarce resources or opportunities? From Influence Science and Practice:“One prominent theory accounts for the primacy of loss over gain in evolutionary terms. If one has enough to survive, an increase in resources will be helpful but a decrease in those same resources could be fatal. Consequently, it would be adaptive to be especially sensitive to the possibility of loss.” (Haselton & Nettle, 2006) Now here’s the interesting thing – once something is no longer scarce we don’t want it as much. There’s a good chance we’ll see this play out with Cuban cigars. Now that relations between the U.S. and Cuba have been normalized it’s a sure bet Cuban cigars will be easier to get. In all likelihood there will be a rush to get them when they initially hit the store shelves. However, as they become more commonplace it’s likely people won’t value them as much.Humans are not always predictable so there’s no guarantee I’m correct in my assessment of what will happen with Cuban cigar prices. Only time will tell. However, given how scarcity works on the human mind and surveying similar scenarios from the past, if I were a betting man I’d bet on a price fall shortly after Cubans – cigars that is – hit the U.S. market.
Brian Ahearn, CMCT® Chief Influence Officer influencePEOPLE Helping You Learn to Hear “Yes”.