CovertMarketing

Covert Marketing

Covert Marketing: Ten Ways to Influence Your Customers without them Realising

A free gift for readers of Mindshop!

Philip Graves Website: www.philipgraves.net “Philip is one of the world’s leading experts in consumer behaviour.” Kevin Hogan

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Covert Marketing

Copyright 2010 All Rights Reserved

Dear Reader

Welcome to Mindshop! As a special bonus to thank you for signing up at my website you are receiving this book containing information on marketing that you may not have encountered before: it doesn’t just reveal ways of getting people to buy your products to work, it explains why they work. Armed with this knowledge, and the latest insights into consumer behaviour, consumer influence and retail marketing I will send you in Mindshop!, you will get a new perspective and understanding on marketing that will enhance your success.

I also review retail experiences to share my knowledge of what works and what doesn’t, and examine advertising to analyse how successful or not I think it will be.

I recommend that you save the information you find useful from my site: whilst much of it will stay there as a resource, some will be available only for a short time.

Thanks for visiting www.philipgraves.net.

Philip Graves

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Covert Marketing

Table of Contents

Introduction.............................................................................................................. 4 1. Because You Feel Excited ...................................................................................... 5 2. Because You Can’t Resist Social Influence (Baaaa!) ................................................ 7 3. Because You’re Afraid ........................................................................................... 9 4. Because It’s More Expensive ............................................................................... 11 5. Because the Box Looks Nice ................................................................................ 12 6. Because there’s too Much Choice ....................................................................... 14 7. Because of the Comparisons you’re Encouraged to Make ................................... 17 8. Because it’s Easy (or Easier) ................................................................................ 19 9. Because of What You See or Learn First .............................................................. 22 10. Because You Feel a Sense of Belonging or Connection ....................................... 25 The Future .............................................................................................................. 28 References.............................................................................................................. 29

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Introduction

In recent years we’ve started to learn a lot about why people buy, and it’s often not for the reasons we like to tell ourselves. In this book I explain some of the reasons that people buy what they do and what you need to do if you want to influence them to buy from you. I’ve packaged these up with the term Covert Marketing because they share a common theme: none of them are reasons that any of us would acknowledge have influenced our behaviour as shoppers. To master covert marketing requires that you recognise the way the human mind works: it is the processes that sit beneath our conscious awareness that filter and shape our behaviour, not the conscious thoughts and post-rationalisations which follow those actions. Can the information that I share here be used to mislead people? There’s no doubt that it can. But any brand that is willing to make a short term gain and rip-off its customers is not going to stay around for too long – at least I hope not. The fact is that everything I describe here influences people whether it has been carefully designed with that intention in mind or not: I’m showing you how you can do better by understanding and fine-tuning those elements. Those interested in going to the next level of Covert Marketing might find my book, The Secret of Selling: How to Sell to Your Customer’s Unconscious Mind of interest. It is available at www.philipgraves.net. Also, in June this year, my book CONSUMER.ology: The Market Research Myth, the Truth About Consumer Behaviour and The Psychology of Shopping will be published by Nicholas Brealey Publishing – it’s destined to stir up quite a storm! So why do people buy? And since we’re all consumers of other people’s products ourselves, that question must also be why do we buy? The better you can recognise your own buying behaviour the better you’ll be able to tap into the real reasons people will buy from you.

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1. Because You Feel Excited

Hold on, you’re thinking, if the prospect of buying something is exciting surely that’s a good reason to get it. How gloomy are you trying to make my life Mr Consumer Scrooge? Let me reassure you, I’m not planning on making your life miserable, quite the opposite. You see the problem is when your unconscious mind gets excited it’s not very good at knowing quite what it’s excited about. It picks up on something that sets it off (and it gets jittery about all sorts of funny things) and sends out a feeling. One of the world’s leading experts on emotions, a neurology professor – rather than someone who reads a lot of agony columns – describes consciousness as the “feeling of knowing” something, and is quite sure from his work studying images of brains in action, and patients who have lost various important areas of brain function, that this feeling occurs quite clearly after the other feelings have had their go1. Lots of other psychologists agree with him too. So the conscious mind gets ‘excited’ as the message and tries to work out what might be causing it, so that we can pursue it and turn that anticipated good feeling into a real one. Signals are sent out to make the body more alert and able to respond quickly and the conscious is under pressure to quickly get a fix on where the action is. It’s a bit like being given a gun and told the target is visible by an excited insistent friend; at some point the pressure to fire becomes so great there’s a chance you’ll shoot at anything. There is a pretty good chance of picking the wrong target too: the unconscious mind has no way of telling the conscious what’s got it all hot and bothered, so it is forced to take a guess. Anything that might fit the bill will do and when it comes to spending your money that means this is a disappointment waiting to happen. You think that Tupperware pot is going to satisfy the thrill rising in your body, but in fact it’s been caused by the wobbly heal on your shoe. If this sounds a bit far-fetched – you’d never get so mixed up - I should tell you about an experiment conducted by a couple of social psychologists in a park in Canada. They invited a group of male students to take part in a survey that they told them was going to be about the impact of scenery on creativity. In fact, the sneaky researchers were interested in something else altogether. They used an attractive female researcher to ask the questions and she gave the people taking part her phone number in case they had any questions about the study; what they wanted to know was how many of the men would phone her to ask her out on a date. Not all the men were interviewed in the same place however. Half were interviewed on a scary footbridge 200 feet over a river, the others on a bench on one side of the bridge: sixty five percent of the men interviewed on the bridge asked the girl for a date, compared with just thirty percent of those on the bench2.

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Other studies that were less pleasant (at least for the male participants) have found evidence of the same effect. By manipulating people’s feelings without them realising, for example by giving them a stimulant disguised as a vitamin pill, or by telling them they were going to receive an electric shock, they found that people changed their response to something completely unrelated.

Covert Marketing Feeling misattribution is extremely common. To capitalise on it all you need to do is identify what your target customers find exciting (incidentally, observe this, don’t ask them) and either put that excitement around your product or take your product to where that excitement is already happening. Recently my six year old son and I went to a school craft fair and he took a small amount of his own money with him so he could buy something if he wanted to. I watched him lurch from one exciting trinket to another; each one seemed so exciting that he felt he must have it. Each time I gently advised him to keep looking around so that he could see everything before choosing. In the end he bought a small glass octopus. What made this so exciting? The stall included an area where you could watch the man making these ornaments by heating and bending coloured rods of glass: it was undoubtedly impressive and, with the flame, heat and moment of transformation where you saw what creature he was crafting, exciting too: compounding the excitement he felt from the craft fair itself. The next day, away from the excitement of the fair and the demonstration, I noticed that my son was no longer admiring his purchase. The product’s appeal was, for him, misattributed from the event. Product demonstrators can really increase sales: partly it is because they draw attention to the product concerned (always helpful) but partly it is because they make it seem exciting.

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When the unconscious mind is excited by something going on in the environment around a product, it’s easy for someone to buy something that they wouldn’t if that thing wasn’t there.

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Find ways to create excitement around what you sell, or take your product to sell where people are already excited by something else.

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2. Because You Can’t Resist Social Influence (Baaaa!)

OK, so I’m calling you a sheep, but that’s not so bad, lambs are quite cute! In fact most of us are sheepish in nature; we do, after all, live in this thing we call society. We depend on a degree of getting along with everyone else to make things work. One of the ways we figure out who it’s safe to be around – an important survival mechanism for our relatively un-evolved cavemeni brains – is by seeing who is most like us. Our closest friends are likely to be the people who share most of our views on things, enabling us to turn our backs on them from time to time without getting bumped on the head with a rock, or leave our children in their care and still feel there’s a chance they won’t have been eaten when we get back. When it comes to shopping though, we are massively influenced by seeing other people buy things. Clever manufacturers capitalise on this by making sure that their products are as visible as possible during and after purchase. The genius of the iPod wasn’t just its stylish design, it certainly wasn’t its technical features (other competing products offered the same or arguably better options), but its high visibility. White is a fairly impractical colour for headphones, let’s face it, the ear wax is going to really show up (euggghh), but how else is a slim pocket-concealed device going to get noticed? It’s in the interest of our unconscious mind to pick up on what other people are doing because it shows us what’s safe. If you’ve watched ten people eat a berry from the bush with the enormous prickles and not collapse to the floor clutching their throat or stomach, you’ve got a new food you can probably eat safely: the mechanism that helped our ancestors survive and prosper still exists in our unconscious mind, and now it helps persuade us that buying something is OK. If you want to get someone to look at a point on the ceiling – come on, admit it, it’s the sort of power you dream of having – all you need to do is get a few people to stand and look at it; your target will be unable to resist a glance in the same direction. Don’t stare without your helpers though; people will just think you’re losing your marbles. An intriguing aspect of our willingness to follow the flock is that we don’t actually need to see the flock ourselves; it’s enough for someone to tell us what a flock is doing! Psychologists looking at how people react to signs requesting that hotel guests use their towels for more than one day found that far more people did so when the message explained that most of the people who’d used the room had reused their towels3. For the same reason companies (especially on the Internet) use testimonials, so you can hear from other ‘sheeple’ like you how great their product is. Another way

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I’m calling us stupid so it’s OK to be sexist.

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to reassure and convince you is to tell you they’ve sold a suitably impressive number to other folk. Now perhaps you’re convinced that you would never be so impressionable. But before you dismiss this as a reason you might be parted from your hard earned money consider this: when psychologists looked at brain images of people who had been influenced to choose the wrong answer to a question, they concluded that the people weren’t making a conscious decision to go along with what they’d heard, they had truly come to believe it was true.

Influencing Customers You need to recognise that we’re far more susceptible to the impact of what other people around us are doing than we would like to admit to ourselves. Consider the items you’ve purchased recently that, perhaps purely coincidentally, you now realise are also owned by people you know or have seen around and about. This isn’t a coincidence. It’s very likely that the reason you felt that you wanted to buy these things was because other people had them. Where you can encourage customers to recommend your product it will have far more influence over potential customers than anything you can say yourself. Of course, the other elements of marketing need to be in place: people still need to be able to find what you’re selling easily and be certain it is what they’ve been told about.

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People copy what other people do.

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Consider ways to make your product or sales more visible.

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Use testimonials (quotes from delighted customers) to show that other people like what you sell.

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Encourage your customers to tell other people about your product.

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3. Because You’re Afraid

You could be bold and brave as lion for all I know, but you’re also afraid, at least your unconscious mind probably is. In fact there are some who argue that your unconscious mind’s number one job is to keep watch for dangerous things and get you in the best possible shape for surviving. Being scared is a good example of the unconscious mind driving our conscious awareness: imagine walking into a totally pitch dark unfamiliar room, your eyes stop sending information and your unconscious mind doesn’t like not knowing what’s going on. It releases adrenaline into your bloodstream, which in turn increases the supply of oxygen and glucose to the brain and muscles and away from the smaller blood vessels and the digestive system: essentially you’re body is now primed to run like crazy or fight for your life. Calm down and turn the light on. Given a moment or two you can remind yourself (consciously) that you’re probably safe, and get a grip. But what’s interesting is the order in which these things happen and that, unless there’s something badly wrong with your brain function, there will always be a way of creating a situation that will induce fear. When the conditions are right it happens quickly, before any of your other thoughts have the chance to get involved. Make a quick choice between the following pairs of alternatives: Pair One • A sure gain of £240 • A 25% chance to gain £1000, and a 75% chance to gain nothing • Pair Two • A sure loss of £750 • A 75% chance to lose £1000, and a 25% chance to lose nothing It turns out that in wide scale tests 73% of people choose the AD combination; even though BC is arguably a better choice (only 3% of people choose it)4. So, however bold and brave me might feel, if our unconscious is having a say in the proceedings (and it usually does) the chances are we will decide on the basis of what seems least risky, rather than what might produce the best outcome in the end. Most people will gravitate towards what feels safest and (critically for the consumer choices we make) stick with what we have or know, rather than take a chance on something new. This doesn’t just apply to what you buy: when asked most people say that they know what sort of television programmes they enjoy and that, if a new one came along that fitted with that view, they would like to watch it and see what it was like. In

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practice, when a new programme is spotted it is competing against lots of established programmes: at this point many people choose to watch something they’re familiar with rather than gamble on something new because they don’t want to risk wasting an hour or so of their life on something they might not enjoy. As a result they watch a familiar programme, often even if though they’ve seen the actual episode before (which is why certain TV series seem to be permanently on your screens).

Influencing Customers One way to tap into the way in which the unconscious mind is wired to be concerned about the future is to make sure that, if your product’s availability is limited, you tell your potential customers. Similarly, if the stated price will not be available for very long, let them know because they will hate to find out that they’ve lost out by not buying. If there is any chance that a customer might regret a decision not to buy make them aware of it. Another related point of influence is your brand identity. Lots of small businesses don’t pay much attention to their brand; feeling that they are just scrapping around for individual customers. Brands are a guarantee. Your brand is your way of telling your customer that they are going to get the same product or the same quality of product every time they buy something with your company’s mark on it. This saves them from having to think (or, more to the point, stops their unconscious mind worrying) if the product might lead them to feeling bad for some reason later. This phenomenon is the reason that, when it comes to winning over customers who buy from your competitors, you will need to do more than offer a better price. You need to find a way to convince people that your product is a safe choice, or else offer a price discount that is so substantial they can tell themselves that, even if they hate it, it was a risk worth taking.

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The unconscious mind is preoccupied with making a bad decision and losing out in the future far more than it is about taking a gamble that pays off.

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Let customers know if they might miss out by not buying now.

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Consider why your product is a safe (or safer) choice than a competitor's, not just why it is a better one.

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4. Because It’s More Expensive

Fear of regret isn’t the only reason you might stick with a brand over a competing product that you’ve never tried, but are convinced wouldn’t be as good. You might decide to buy the brand, or any expensive product for that matter, just because it’s more expensive. “But don’t they always say ‘you get what you pay for’”, you say? Well sometimes that’s true, and not just if you’re buying whatever it is by the pound (or kilogramme as I may be legally required to say). It’s impossible to argue with the logic that if something has better components, is built with more care, or requires more people to make or serve, that the end product will cost more and should be better for it. Unfortunately, very often when we buy something we have no idea what’s involved in manufacturing it and when we use price to infer quality we can easily deceive ourselves. ‘You get what you pay for’ may be a cliché, but it’s one our unconscious mind has taken to heart to an extraordinary degree. Recently, researchers in California conducted an experiment where they gave people the same wine to taste but gave them different information about the price. People consistently gave the higher priced wine higher ratings (even though it was the same). More intriguingly, brain scans conducted during the experiment revealed that the area of the brain believed to be responsible for encoding pleasure relating to taste and odour showed increased activity when the participant had been told that the price was higher. In other words, since people believed the experience would be better (on the basis of the price) the reward centres of the brain encoded it as feeling better.5

Influencing Customers Many companies get far too preoccupied with price. Always consider whether you may be able to command a premium for your product and let the sales data be your guide (not what people tell you). It’s often good to invest in product quality, but a high quality product with a comparatively low price may well not get the recognition it deserves.

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People often automatically associate price with quality.

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Use your sales data and create test markets to investigate what price works best for your product.

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5. Because the Box Looks Nice

As Rowan Atkinson’s character in the film Love Actually knew, packaging can really make a difference to how a product is perceived. In this instance, unlike with the adage of ‘you get what you pay for’, our unconscious mind hasn’t embraced the old saying that you shouldn’t judge a book by its cover. As with all the ways in which we allow ourselves to be influenced there are good reasons for our being so superficial. Given how impractical it is to consciously evaluate every single thing you come into contact with, be it bottles of wine on a shelf or berries in a forest, it would have been beneficial for our ancestors to make swift judgments about the likely quality of what was on the inside: judging books by their covers might result in us missing out on a riveting read (in fact, we’ll also be even more likely to miss out on it if the publisher doesn’t pay to have it displayed on the table at the front of the bookshop to make the cover easy to spotii), but judging berries by their covers will help us live longer and avoid eating poisonous bugs that have nibbled their way inside. Perhaps unfortunately, we also have an unconscious capacity for judging people by their appearance; again the ability to decide if someone is potentially threatening may have become redundant most of the time in developed societies, but even so the small number of dangerous people around means our sense of what someone is like as they approach us on the street is useful for self-preservation. When it comes to shopping this innate sense can be readily manipulated, and it is. Not surprisingly smart companies spend thousands of pounds developing both the physical structure and the design of packaging for their brands. Just how easy we are to fool was illustrated by a study where psychologists compared reactions to different wine labels. To keep the known complication of price out it, diners at a restaurant in Illinois were given a glass of wine with their meal. In each case the actual wine used was the same (an inexpensive Cabernet Sauvignon). However, different bottle labels were used to signal different wine qualities; one suggested the wine came from California and the other from the far less renowned North Dakota. It wasn’t just that participants rated the wine from California as tasting better, they also ate 11% more food and were more likely to revisit the restaurant again in the future! The wine itself was exactly the same; people’s entire experience was altered by the label on it. Of course, none of those people (much like your good self) would have said, either before or afterwards, that their behaviour would be altered by a wine label. The same can happen in reverse; from my own work for a well known snack manufacturer I discovered that poor packaging can lead people dismiss something they

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That’s fact rather than bitterness; at the time of writing I don’t have a publisher.

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might enjoy, were the wrapper to create a better impression. I asked a group of brand users to taste a ‘new’ variety of the product; they all liked it, thought it tasted much better than the variety they purchased currently, and insisted they would buy it if it was launched. In fact the product had been on the market for several years, and had even been advertised on the product that they bought, but because of the pack design most people didn’t give it a second look (or should that be a first look?). The popularity of margarine was increased dramatically in the 1940s when a crafty marketing chap realised that the product just needed to look better. He advised the manufacturer to colour it yellow, wrap it in foil, and call it Imperial Margarine. When they carried out taste tests on the two products the new version beat the original white product hands-down, and sales of margarine began to take off6.

Influencing Customers People do judge your products by their packaging. Understandably, product owners can get quite fixated on the technical aspects of what they sell. However, be aware that the right packaging can transform a product’s fortunes. A good designer is someone who has an intuitive feel for what makes a product (or anything else for that matter) attractive: it really is a mistake to skimp on packaging. However, packaging is something that your customers respond to at an unconscious level, and because part of what it must do is ensure a product is noticed, it makes no sense to place different packs in front of customers and ask them what they think. Either you need very sophisticated pack testing, or else you need to trust your judgment, and that of the designer, to create the right look (and then see how sales go).

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Recognise that the unconscious mind is easily influenced by looks.

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Invest in packaging like you would your product.

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6. Because there’s too Much Choice

Huh? Choice is nice to have isn’t it? A big range to choose from is one of the reasons people go to the big out-of-town stores. A bigger number of options mean there’s a bigger chance of being able to find what you want. Surely, with more alternatives you’re more likely to find the product that’s right for you. Logically no one would argue with any of the points I’ve just voiced for you, but in reality only one of them is true. Yes, one of the reasons people choose a retailer is because of the range they offer; a choice is nice to have. But often a choice is a barrier to buying and, if we do buy, can result in us feeling less good about what have bought! Consider a restaurant visit for a moment; have you eaten at a restaurant with a huge number of options on the menu? Was it you, the person you were dining with or both of you that asked what the other person was going to have? Was someone sitting there saying, “Ooh, I just can’t decide”? The issue is quite straightforward; the more choices you are weighing up, the greater the likelihood that you will regret the choice you eventually make. In this situation the biggest feeling of loss arises from ordering something and then deciding when it arrives that what your dining partner has ordered looks far more attractive and really kicking yourself. Some people use a partner’s choice as insurance, in the optimistic hope (or misplaced if it’s my food they’re hoping for) that they will at least be able to share some of what the other person has ordered. The same problems occur, but without the potential insurance policy, when you go to a shop that has a vast range without a specific purchase in mind, like buying a replacement washing machine for example. The anxiety and confusion you have forced on your unconscious mind comes out in one of two ways; either you put off buying a product you need (saving money but not helping get the clothes washed and adding to your stress about the growing pile of dirty clothes), or you buy what feels safest, which may well not be the best value product for your needs. The rational and sensible start point of consciously wanting a big choice creates a problem for your unconscious mind and its needs are likely to win through. We tend to reinforce our perceptions about choice being good by sometimes telling ourselves when we leave a store empty-handed that it was because they didn’t have what we wanted. One company I work with conducted a series of interviews with customers leaving their shops to try and identify why they hadn’t purchased anything on their visit. The most frequent answer was that the shop didn’t have what the customer wanted. Fortunately, before the stores were all enlarged and millions of pounds of extra stock ordered, my client had the presence of mind to ask customers entering the store how clear they were about what product they were going to buy; most didn’t have a specific product in mind!

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The problem of holding two conflicting thoughts in your mind at the same time, which psychologists call cognitive dissonance, was first identified in the 1950s and has been studied extensively since7. In one experiment, psychologists set up tasting tables in supermarket and varied the number of products available to choose from. For one test they used twenty four different jams flavours and for another just six. More of the people passing by stopped at the table with more jams, attracted by the large choice, but only 3% of them ended up buying a jam, compared with nearly 30% of the people offered just six. Another study looked at how people subsequently felt about their choice when the number of alternatives was larger. Participants were either given no choice, six choices or thirty choices of chocolate. Those with the large selection were found to be more dissatisfied and regretful about the choice they’d made than those with a smaller selection8. In my own research for retailers I often watch customers shopping and then speak to them about their experiences. I’ve learned that when people feel they have to make a choice, but find themselves with a large selection, they tend to make a sweeping decision and ignore the product information available to them. Often this involves choosing the same brand as last time by default, even if they were disappointed with how the previous product performed or how little time it lasted. Alternatively, people will stick to a budget they had in mind when they arrived at the shop, even if there are products that meet their needs technically at a lower price. Amazon is an example of a store that offers a vast choice. But Amazon also does a good job of narrowing down the choice for you: they will send you an email telling about five or six books they think you will be interested in because it is very unlikely you would browse and find them. Whilst they let you know that there are over 350,000 music titles that come up for the search term ‘rock’ – reassuring you that they have lots of choice – they only show the first twelve and point you towards the first three pages of them at the bottom of the screen: that way it doesn’t feel like there is an overwhelming number to consider and there’s a chance you will stumble on one that appeals rather than get daunted.

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Covert Marketing You can reduce the stress you put your customers under when they shop with you either by providing fewer options or by making sure that the options you have are so clearly delineated into separate sections that people can make a series of smaller choices. For example, if the category has dominant brands it might be that a choice of which brand is best is a sensible place to start. It may be that encouraging people to decide an approximate budget is a good idea. Perhaps you need to help people clarify exactly what they are interested in, so that you can show them the products that fit their interests.

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Choice is not always a good thing.

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Establish and test whether you need to offer all of the options that you do.

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If you have a big range, ensure you structure it in such a way that customers can make several choices, each one from a small range, rather than one choice from a large one.

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7. Because of the Comparisons you’re Encouraged to Make

As my economics teacher, Mr Welsby, used to say when we got into political and cultural debates, “The answer is rarely yes or no, it’s usually ‘it depends’”. He had a point. It’s very easy to believe that the choices and decisions we make are absolute, definitive judgments, when in reality they almost always depend on what’s going on at the time. Our conscious minds are very good at convincing us that what we’ve done was for our own good reason, but this is an illusion to help us feel empowered9. If you have children you can see a change in the way they represent themselves between the ages of two and six. If you ask a younger child why something disastrous happened they tend to provide a fairly accurate explanation: “Why did you pour the paint into your hand and rub it around your mouth!?” “Because I wanted to see what blue tastes like.” Later on, in the same circumstances the answer is less transparent, “I don’t know, I must have spilled it on my hand and wiped my mouth.” When it comes to shopping what we choose between is a key factor in determining what we convince ourselves we want. Again, it’s our unconscious mind intervening that leads to us feeling that one choice is probably the best. In a different set of circumstances, with a different range of options, we would choose one of the other products available and feel just as good about it (or as we saw in the last chapter, if the choice is too large feel worse). A number of experiments highlight how what we’re considering can change what we choose to buy, and even whether we choose to buy anything at all. In the first, people were asked to imagine that they were thinking of buying a CD player and were yet to select a model. You pass a store selling a Sony CD player for $99 well below the list price in a one day clearance sale. Do you buy it or wait until you learn more about the various models available? Two thirds said they would buy the Sony, the rest opting to wait. Next they explored what difference it would make if the store was also offering an Aiwa CD player for $169, also well below its list price. In this instance, with a better choice available, fewer people opted to buy; almost half decided instead to wait until they found out more10. So whilst our conscious mind likes to think that we are smart enough to make a choice, our unconscious mind leaps at the chance to not have to get it over and done with, before confusing alternatives arrive and the risk of choosing badly presents itself (our unconscious mind hates that we might make the wrong choice). So you might suppose that three alternative choices will send the unconscious mind into meltdown! Not quite. The thing about choosing between three is that there’s a middle option, and just as Goldilocks found during her fairytale crime spree, somehow the one that’s not too hard or too soft feels just right. When psychologists offered people a choice of two cameras, one at $170 and one at $240 they found that people were evenly divided between the two. When they offered a third, more

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expensive option at $470, the proportion of people selecting the $240 camera, now the middle option, increased to two thirds11. This phenomenon, known as extremeness aversion, shows just how influential the number of choices made provided can be. People’s camera ‘needs’ hadn’t changed, but all of a sudden they could feel better about one choice, knowing that they weren’t getting the worst product in the world and the camera feels like good value in comparison with the expensive alternative. Clever retailers know that by they don’t need to sell many of those really expensive products to justify including them in the range; if their presence causes enough people to decide to bump up from the cheapest product to the midprice one they stand to make a lot more money (and of course a few people will want to buy the expensive one either because they’re particularly susceptible to believing that a higher priced product is always better (see Chapter 0) or because they’re just that sort of person).

Covert Marketing Following on from the way in which you structure a range, described in the previous chapter, consider what set of options customers are choosing between. That way, you will be seeing the world through their eyes and understanding the decisions they make. It may be worthwhile experimenting with the addition of alternative products, not because you perceive a strong demand for them, but because of the context that we place your primary product in. If people can see that product X is a middle of the market option in relation to two alternatives they can feel good about the fact that they aren’t buying the cheapest product that might not last, nor paying over the odds for something and might discover later that they could have bought better.

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How people feel about a product is influenced by the alternatives available at the time.

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Look at the choices customers make and recognise that they are influenced by the products around them.

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Consider adding in products to small ranges so that customers can feel one is a ‘naturally’ good choice.

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8. Because it’s Easy (or Easier)

With the illusion that we only buy what we really want or need already pretty much in tatters it may still come as something of a surprise to here that you will often buy what’s easiest, rather than what’s best. Even now, you may be summoning memories of hideous experiences trying to park in your local town centre on a Saturday morning, or fruitlessly searching to find someone in your local DIY store to explain the difference which of the two types of wall plug is right for the job you have in mind, or even hours spent chasing futile search-engine links to find the cheapest source for the new hi-fi speakers you have you heart set on; ‘easy’ probably wouldn’t be a word that came to mind. If you think of a really tricky question like, “What’s the square root of 286?” you have to really concentrate and, unless you’re some kind of mathematics freak (in an endearing way, obviously) then the process is far from instantaneous. On the other hand, if you’re asked a simple question such as, “How many of each animal did Moses take into the Ark?” the answer “two” may very well just pop into your head with no discernable effort on your part12. Interestingly, it may have done this even though the answer is wrong. Not because the bible says that God specified seven pairs of some ‘clean’ animals, nor because the whole thing is highly implausible and most likely never happened, but because it was Noah in the story rather than Moses who arranged the animal cruise. So it becomes apparent that the problem with things that are easy to think about is that it’s easy to jump to a perception of them that is inherently flawed. Yes, Moses was a character in the same book, but you almost certainly know now, and knew all along, that he never got to dress up as a boat captain. Our brains work very efficiently when they’re going with the flow of what’s familiar, rather than carefully scrutinising every aspect of what we encounter. As usual, there’s a good reason for this; a reason that benefits us as a species when we’re trying to get on in the wild, and means we can learn to get routine things done quickly, can be taken advantage of when we’re out in the wild of the shops. For instance, supermarkets know that if they attract you in with a few signature discount lines, you will breeze through your regular shop without scrutinising the price of everything else as you go. In the past some supermarkets have really exploited this low-high pricing policy and, in the process, charged far more than their competitors for the same basket of goods. In one study that examined just how far-reaching people’s preference for what’s easy went, researchers asked people to consider one of two alternative cordless telephones and noted which if either they would buy, or whether they would opt to put off a decision and look elsewhere. When they made the text difficult to read by using a grey italic embossed font ((lliikkee tthhiiss)) three times as many people decided to look elsewhere before choosing13. In a similar experiment people were asked to make

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two choices, one about a digital camera and one for a microwave oven, but before doing so half were asked to say how easy or difficult they would find it to list ten reasons for choosing a particular product, and half just two reasons (they didn’t even have to give the reasons, just consider the difficulty of doing so). Fifty percent more people decided to defer making a choice when they’d been asked to think of ten reasons14. Another way in which the ease with which you can think of something works is through familiarity. The more often you have seen something the less work you have to do mentally identifying and categorising it and the better it is going to seem than an unfamiliar alternative. Somewhat disconcertingly there is even evidence that over time what we remember and accept is the bit that’s easy (because it’s easier for our brain to log) and as a result we can end up believing things despite having had the information that says we shouldn’t15. One of the reasons we can be confident that this is down to unconscious processes comes from research that uses subliminal imagery (that is images flashed up so quickly that people aren’t consciously aware of having seen them) before showing a related image and asking people how much they like it: when the picture was preceded by a related subliminal image, such as the outline of the ‘visible’ picture, or by a related work, such as the word ‘lock’ or ‘key’ before seeing an image of a lock, people liked it more. The mental associations were already primed and ready to go, and because the mental appreciation of the subsequent image was easy it was interpreted as being liked more16. This is one of the reasons you don’t need to see an advert in order to be influenced by it! As you flick through a magazine learning about the latest holiday escapades of marginal celebrities, or the latest D41K8000 model aeroplane motor, you may well believe that you’re taking no notice of the adverts that companies spend thousands of pounds putting alongside. But, whilst people are far more likely to recognise an ad if they were asked to look at it an hour earlier, the adverts they had been shown were consistently rated as more memorable, appealing, eye-catching and distinctive (as opposed to adverts they had not previously seen) whether they were viewed deliberately or not. In the experiment people were either asked to look at the page with the ads and say what the most striking feature on the page was, or else look at an adjacent page and comment on the layout, and both were equally effective in enhancing perceptions17.

Covert Marketing The products that people purchase regularly become fluently entrenched in their unconscious mind. Both the physical act of purchase and the continued use give the unconscious mind a feel-good factor that makes it far more likely that someone will continue to purchase it, and inherently quite resistant to purchasing anything else. Of

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course, the fact that the alternative is unfamiliar and consequently feels riskier plays a part. Becoming the default provider is a hugely powerful position to occupy. To get there you may have to invest a lot in terms of getting your brand name sufficiently familiar to feel safe and / or getting people used to the process of buying from you rather than someone else. Consider the success Amazon enjoys: it took them seven years to make a profit but now they are the ‘go to’ supplier for a whole host of products and many people will go straight to their site rather than comparison shop via an Internet browser or price comparison site. Communicating your product in a clear way, showing how it has features that its competitors don’t can work because it makes a decision to buy easy. The fact that, in the process, you are defining the criteria around which the choice is made is a separate matter: of course, if you miss out a dimension that the customer considers important you won’t win them over. Of course, the use of discounts and multi-buys (e.g. three for two deals) are another way that you can make one option seem so overwhelmingly attractive and, above all else, the easy choice.

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Familiarity will often win – being the best or the cheapest doesn’t always count for as much as it might.

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Make the process of buying from you as easy as possible.

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Mirror the purchase process that is used elsewhere to avoid throwing in an element that inadvertently triggers anxiety.

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Where possible, encourage customers to visit you or buy from you frequently so that you become the ‘go to’ provider.

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9. Because of What You See or Learn First

When people ask me what’s the single most important think in marketing the answer is fairly easy, although to be fair, a little cryptic: the first thing is most important. In another blow to our delusion that we make balanced, rational judgments is evidenced by something known as the primacy effect. Write down each of the following calculations on to a separate piece of paper and ask people to give you a quick guess of the answer: 1x2x3x4x5x6x7x8 = ? 8x7x6x5x4x3x2x1 = ? The average guess for the first calculation is 512, for the second 2,250, more than four times higher. Of course, the actual answer is exactly the same (and, for what it’s worth, considerably higher than people guess), but what happens is people attach far greater significance to the first few numbers and estimate an answer accordingly18. The same is true with words. People asked to consider two people and quickly decide who they think they would like more: John is intelligent industrious, impulsive, critical, stubborn, and jealous. Mark is jealous, stubborn, critical, impulsive, industrious, and intelligent. It shouldn’t make a difference, since the descriptions contain exactly the same words, and yet most people unconsciously attach more weight to the words they hear first and say they prefer John to Mark19. With examples like the ones I’ve just provided it’s almost inevitable that you will start on the left, after all you’re reading a book at the moment and if you’re using any other pattern sense much make to going aren’t sentences the! But what some people selling things in shops and restaurants have realised is that, by working out (or manipulating) where you look first they can influence what you think and what you’re more likely to buy. In many supermarkets the first produce you encounter is the fresh fruit and vegetables. This doesn’t make much practical sense; many of the items will be easily damaged by the sixteen bottles of vodka you’re planning to throw in at the end of the shop. However, picture two supermarkets in your mind’s eye… Supermarket one sells fresh fruit and vegetables, bread, delicatessen produce, frozen food, tinned goods and alcohol. Supermarket two sells alcohol, tinned goods, frozen food, delicatessen produce, bread, and fresh fruit and vegetables.

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Where will the bread be fresher? Most people think it will be fresher in the first supermarket. And by directing customers to one entrance and putting the fresh produce in their path, some supermarkets send a strong signal to your unconscious mind about the quality of what they sell. Other supermarkets make sure the exciting products that you might go and browse (such as CDs, books, clothes and electronics) are at the start of your journey around the store. This helps break the association that many people have with food shopping being the chore of getting the things on the list, and builds an association with a more enjoyable sense of exploration. Of course, it also helps that you select the items to buy here before you know how much you’ve spent in total on the food items you’ve come to get (a potential source of extra spending that I talk more about in chapter Error! Reference source not found.). The same also happens on the individual aisles. Manufacturers compete to get their product at eye level. It’s not just most visible at this height and the easiest to reach, it’s also the one you see first, and as a result will sell much better than any of the other products. I recently needed to buy shaving foam and found myself with a few minutes to kill before a meeting near a supermarket. I decided to break my usual buying habits and experiment with something different. There were six or seven products from one manufacturer lined up on the right of the shelf, with one jumping out because it was on offer – £1.99 instead of £2.89 – and the products next to it were all at the higher price. I then looked at the very bottom of the display and the extreme left and found an alternative can of shaving foam for £1.29. The alternative product was the same size, also a gel formulation and, to top it off, was exactly the same brand as the more expensive products. In the few moments I had, I could find no reason to do with size of claimed advantage to justify the purchase higher priced product. Whatever they choose to use, if they’ve experimented at all or if they’ve studied the primacy effect, shops and on-line retailers will make sure the products you see first put you in the best possible frame of mind (for them). It’s not just supermarkets who leverage this effect; the designers of restaurant menus have also found that there are certain ‘hotspots’ on a menu that will increase the sales of the items they put there. It makes perfect sense (for them) to put the dishes or drinks they make most money on in these positions20. One of the ways they do this is by not encouraging you to read the menu according to price: if the first thing you notice when you open the menu is a column of prices on the right hand side of the right hand page you’re far more likely to factor the price into your decision. If the prices are written on the end of the description, wherever that happens to fall on the page, and better still without the instantly identifiable symbol (for instance 16.95 rather £16.95), you won’t look at the prices first. Sometimes companies who don’t understand the primacy effect can miss out as a result. One restaurant chain who I advised couldn’t understand why people didn’t realise they had proper chefs preparing food from fresh ingredients; most people thought they had untrained kitchen staff heating up meals in microwaves. They had 23

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failed to appreciate that the first things people saw were the standardised décor, signage and menu, not the specials board or the food itself. The food was very good, but the time people ate it they’d received lots of indications that it was going to be fairly ordinary.

Covert Marketing Whilst my answer that what’s first is most important may seem unhelpful, it’s actually quite constructive. I can’t overstate the importance of carefully considering what your prospective customers will see, hear and feel about you first. It’s a good idea to experiment with varying product placement and/or website design so that you can explore how variations alter what customers do and what they buy. Where they look, where their mouse clicks first, what they touch first are all indications of what is priming a shopper’s experience.

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What people see first influences how they see everything else.

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Explore how different layouts for a shop, website or packaging change how people react.

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Put disproportionate effort into making what customers encounter first as good as it can be.

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10. Because You Feel a Sense of Belonging or Connection

Aside from the odd cantankerous individual we are, for the most part, sociable creatures. To a greater or lesser degree most people wanted to fit in and be part of the crowd at school. As we get older the need to belong tends to reduce, but mostly that’s because we’ve ended up in various social groups, be it through work, relationships or the pastimes we pursue. When it comes to spending money, one of the most powerful mechanisms that companies can leverage is our need to feel accepted. Some commercial organisations work hard to create a strong relationship with their customers, knowing that the stronger the bond they have with their own company, the less likely they are to risk using a competitor or, best of all, even consider using anyone else. This isn’t a new occurrence – although, as I shall discuss in a moment, it has taken hold with a vengeance relatively recently: for years many people bought insurance through a door-to-door salesman who visited them regularly at home and, in the days before direct debits (and with many customers not even having cheque books), premiums would be collected each week. As a result of the familiarity this created, the salesman would often come to be seen as a family friend, and his customers wouldn’t have dreamed of going anywhere else with their business. If you consider some of the reasons you spend more than you might that I’ve already highlighted it’s easy to see why close bonds with companies (or company representatives) are likely to lead to sub-optimal spending: the familiarity feels safe; conversing with the same person is easy – you become used to how they talk and think; every new purchase is a vindication of every previous purchase you’ve made, and so on. You may, not unreasonably, be wondering what all of this has to do with you; surely now that door-to-door salesman are a thing of the past you don’t have relationships with companies: were it not for the Internet that might be true. Now companies are setting up forums where people can interact and discuss their products. A small group of loyal customers can become a community whose common ground is the brand or product concerned. They may talk about all sorts of topics, but each time they do so they are close to the brand, exposed to its name, and developing a sense of affinity. Quite simply, the longer you spend ‘hanging around’ a product, directly or indirectly, the more likely you are to feel that buying more of it is a good idea. Buying increases your sense of belonging, gives you more to talk about and confirms your connection with the other people there. Most of all it can prime you with the thought about the purchase in the first place. It’s ironic that even informative web forums that aren’t affiliated with any company in particular can increase the amount you ‘choose’ to buy; undoubtedly the £47.00 twenty megapixel digital camera that your cyber acquaintance 25

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‘buggleseewuggles’ has posted about on the ‘saving money’ forum is an exceptionally cheap camera, but are you sure you wanted a new camera before you heard that one could be purchased so cheaply? It’s one thing if you found the reference when you were searching the Internet for “really cheap 20 megapixel cameras”, potentially quite another if you were just hanging out there sharing stories about the cheap deals you’d found. The renowned psychoanalyst Eric Berne identified six levels at which people interact when they spend time together. He realised that there were steps people progressed through, from a basic level with no commitment to the other person (withdrawal), through to the level of highest engagement and openness but more personally risky (intimacy)21. In much the same way, although usually without an explicit understanding of Berne’s hierarchy, companies know that the more involved and ‘personal’ the relationship they can create with you, the more likely you are to be loyal towards them. My bank, for instance, is constantly trying to engage me in a closer relationship; I have a ‘personal banker’ who calls me from time to time and likes to ask me about what I’m up to at the moment; she diligently makes a note of this in her file and then asks about whatever I say again the next time we speak. The bank makes this effort in the hope that I will speak to them first if I ever want a new financial service: why? Because they will have made themselves familiar and safe and, as you will appreciate by now, that’s ‘nice’ for my unconscious mind. Other companies generate their sales through selling ‘parties’; they develop a sales force of well-connected people who host get-togethers where friends eat, drink and merrily learn about a product range. The genius of the approach is that, once one person buys something, others feel a strong desire to do the same to reinforce their acceptance within the group. Our bias towards things we feel a connection to has been observed in several psychological studies. In one study half of the participants were tricked into thinking that they shared a birthday with Rasputin and asked to make a judgment about some of the things he’d done in his life. Those people who believed they had a birthday in common with the manipulative charlatan perceived the same description of him far more favourably than the people who didn’t22. In another study it was found that people whose name initial coincided with the first letter of a name for a disaster (for example, people with the initial K donating to a fundraising campaign for victims of hurricane Katrina) were more likely to make a donation than those who didn’t23.

Covert Marketing A lot is made of relationship marketing without really understanding the relationship that matters most: anything you can do to build a close connection between your brand and your customers will exert a powerful influence over how they choose to spend their money. For example creating an internet forum, sharing

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information they care about with them and recognising them personally when they might not expect it can all contribute to their feeling that their relationship with your brand is deeper than others. Also, avoid doing anything that might undermine their sense of belonging. It is human nature to be wary of people who let you down: when a brand does so it’s usually easy to take your business elsewhere. Loyalty cards, when used properly, can work well in building that relationship. Whilst customers may not be getting anything that others don’t have access to, the more they feel their loyalty is reciprocated and that the offers they receive are individually tailored to them the better. On a different tack, getting groups of prospective customers together can work well to build their sense of involvement with and appreciation for the brand. Group influence is such that people will compete to demonstrate the most extreme perspective on a topic: customers will delight in being the most brand loyal if placed amongst a group of similarly-minded people.

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Work hard to make your customers feel they are valued.

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Create an environment where loyal customers can share their affection for your products with one another – nothing will fan the flames of their affection faster than others with a similar view.

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Consider how you can let customers know that you value them in a way that feels individual to them.

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The Future

This is a dawn of a new age for marketing. I have no doubt that in decades to come a lot of what people currently believe about consumers will be exposed as fanciful nonsense. The problem is that we’ve been too willing to accept people’s word for the reasons they behave as they do for too long. If you’re interested in being at the front of the wagons heading into this frontier of new understanding then the Mindshop! at www.philipgraves.net is the right place to be. I think you’ll also find my forthcoming book CONSUMER.ology: The Market Research Myth, the Truth About Consumer Behaviour and the Psychology of Shopping a fascinating read when it is published later this year.

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References

1

Damasio, A. The Feeling of What Happens (2000)

2

Dutton and Aron (1974)

3

Goldstein, J. Martin, S. Cialdini, R. Yes! 50 Secrets from the Science of Persuasion (2007)

4

Kahneman, D. and Tversky, A. Choices, Values and Frames (2000) cited in Hogan, K. The Science of Influence (2005) 5

Rangel, A. Proceedings of the National Academy of Sciences, California Institute of Technology (2007) 6

Gladwell, M. Blink, The Power of Thinking Without Thinking (2005)

7

Festinger, L. (1957). A theory of cognitive dissonance. Stanford, CA: Stanford University

Press 8

Iyengar, S. Lepper, M When Choice is Demotivating: Can One Desire Too Much of a Good Thing? (2000) 9

See Wegner, D. The Illusion of Conscious Will (2002)

10

Tversky, A. Shafir, E. The disjunction effect in choice under uncertainty, Psychological Science 3, 5, pp305-309 (1992) 11

Kahneman, D. Tversky, A. cited in Hogan, K. The Science of Influence (2005)

12

Erickson and Matteson (1981), cited in Song, H. Schwarz, N. Fluency and the detection of misleading questions: Low processing fluency attenuates the Moses illusion, Social Cognition (2008) 13

Novemsky, N. Dhar, R. Schwarz, N. Simonson, I. Preference Fluency in Choice, Journal of Marketing Research August 2007, pp 347-356 14

Novemsky, N. Dhar, R. Schwarz, N. Simonson, I. Preference Fluency in Choice, Journal of Marketing Research August 2007, pp 347-356 15

Schwarz, N. When Thinking Feels Difficult: Meta-Cognitive Experiences in Judgment and Decision Making (2004) 16

Winkielman, Piotr, Schwarz, N. Reber, R. Fazendeiro, T. "Cognitive and Affective Consequences of Visual Fluency: When Seeing Is Easy on the Mind." In Persuasive Imagery : A Consumer Response Perspective edited by Scott, Linda M.//Batra, Rajeev. 75-90. (2003) 17

Perfect, T.J. & Askew, C. Print adverts: not remembered but memorable. Applied Cognitive Psychology, 8. (1994). 18

Hogan, K. The Science of Influence (2005)

19

Hogan, K. The Science of Influence (2005)

20

http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=162 (Reading Between the Lines: The Psychology of Menu Desing)

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21

Berne, E. What Do You Say After You Say Hello? (1998)

22

Finch, J.F., &Cialdini, R.B. Another indirect tactic of (self-) image management: Boosting. Personality and Social Psychology Bulletin, 15, 222-232 (1989) 23

Chander, J. Griffin, T. Sorensen, N. In the “I” of the storm: Shared initials increase disaster donations, Judgment and Decision Making, vol. 3, no. 5, June 2008, pp. 404-410

Also by Philip Graves: The Secret of Selling: How to Sell to the Unconscious Mind (available now from www.philipgraves.net)

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