Kennedy or someone else?
The 34-year-old man was sworn in as the leader of his country on a cold January day. At his side was his predecessor, a famous general who 15 years earlier had commanded his country's armed forces in a war in which Germany was defeated. The young leader had been raised in the Roman Catholic faith. He watched honorary parades for the next five hours and partied until three in the morning.
It's easy to guess who I'm describing, isn't it? It is January 30, 1933, and I am describing Adolf Hitler and not, as most would assume, John F. Kennedy. The whole point is that we make assumptions. We form an idea of the world around us that is sometimes based on incomplete or incorrect assumptions. In this case, the information I gave was incomplete. Many of you probably thought I was describing John F. Kennedy until I added a little detail: the date.
Decisions based on assumptions - not knowledge
This is important because our behavior is influenced by our assumptions or by supposed truths. We make decisions based on what we think we know. It wasn't long ago that most of humanity believed that the earth was flat. This supposed truth influenced behavior. There were few discoveries in this era. People feared that if they ventured too far they would fall over an edge at the end of the world. So they preferred to stay where they were.
Only with the discovery of a small detail - that the earth is round - did that change. After this discovery, cultures began to explore the planet. Trade routes emerged, spices were traded. Societies began to exchange new ideas, for example in mathematics, which made all imaginable innovations possible. Correcting a simple false assumption moved humanity a little further. One could also say: lost illusions are clarity gained. But what can we do about the power of manipulation?
With carrot and stick
There is no product or service offering on the market that the customer cannot get just as cheaply, just as well, with just as good customer service and corresponding properties elsewhere. Most new products lose their lead within a few months. Innovative products come up against equally or even better products on the market in a very short time. And yet, when asked why their customers are loyal to them, most companies will reply that they are better, cheaper, have superior products, and serve their customers better. This shows us that most companies don't know why their customers are their customers. And if a Company does not understand why its customers are loyal to it, then it will not know why its employees are loyal to it.
A company that does not know why its customers and employees are loyal has no way of knowing the ways in which it can attract new employees and strengthen the loyalty of existing ones. The reality is that most companies base their decisions on sketchy or even completely wrong assumptions about the forces that drive what is happening in the marketplace.
5 manipulation techniques: this is how influencing people works
There are two methods that can be used to influence people: manipulation or inspiration. Manipulation doesn't have to be a bad thing; it is a normal tactic that is not necessarily harmful. We all manipulated others in our youth. The phrase "I want to be your best friend" is an expression of a negotiation tactic that generations of children have used in order to get things from other children that they wanted. And every child who has already given away a piece of candy to make a new best friend can confirm that the tactic works. Manipulation is common in sales and marketing. This is not only true in the
Economy but also in politics. Types of targeted manipulation are discounts, promotions, peer pressure, addressing fears and wishes or announcing innovations. These funds are used to influence purchasing behavior and voting behavior or to secure support. Companies and other organizations that do not have a clear idea of why their customers are loyal to them tend to use massive manipulation techniques to achieve their goals. And there is a good reason for that. The manipulation is successful.
1. The price as a manipulation technique
Many companies have reservations about discounts, but they use them because they know they are effective. So effective that the temptation is almost irresistible. There are few professional service companies who don't simply drop their prices to close a deal when the chance of a big deal arises.
Discounts are like heroin addiction
No matter how you explain it to yourself or how you explain it to the customer, the price is a highly effective manipulation technique. If we lower the price just enough, the customer will buy the product. We see this in retail at the seasonal "sell-out". If you cut prices low enough, the shelves will empty quickly and space will be made for next season's merchandise.
However, working with discounts can be costly and in trouble for a company. For the seller, discounts are like a heroin addiction. The short-term gain is fantastic, but the more you do it, the harder it becomes to quit. Once shoppers get used to paying a below average price for a product or service, it is very difficult to get them to pay more for it again. And the sellers, who are under intense pressure to keep prices down in order to remain competitive, have to accept that their profit margins are also getting smaller and smaller.
When the price spiral turns downwards
More has to be sold to compensate for the losses. Again, the quickest way to do that is by price. And so the downward spiral of price dependency is started. In the drug world, addicts are called junkies. In the business world, this role has been taken over by consumer goods. Insurance. Home computers. Cell phone service. Packaged goods. There is a long list of consumer goods that have only become part of this through discounts. It is almost always the responsibility of the companies that have to sell their products as consumer goods. Certainly, dropping prices is a perfectly legitimate way of increasing sales; but the challenge is to stay profitable.
Wal-Mart seems to be an exception. The chain built a very successful business model with its discounts. But at a very high cost. Only their size allowed the Wal-Mart group to avoid the dangers of discounts. But the company's fixation on price made it vulnerable to scandals and damaged its image. The trigger for the scandals was always the attempt to keep costs down in order to be able to offer products at low prices. Price always has its costs. The only question is, what do you want to pay for the money you make?
2. Manipulation with buying incentives
General Motors had a bold goal. The company wanted to gain the largest market share in the American auto parts industry. By the XNUMXs, there were four choices in the US auto industry: GM, Ford, Chrysler, and AMC. Before the foreign auto manufacturers appeared in the market, GM dominated. However, as expected, the new competition made it difficult to achieve the goal. There is no need to provide statistics to show what has changed in the auto industry over the past fifty years. But General Motors successfully steered through most of the past century and was able to maintain its dominance with high-priced products.
Buying incentives only work at the beginning
Since 1990, however, Toyota's share of the US auto market has more than doubled. In 2007 Toyota's market share rose from just 7,8 percent to 16,3 percent1. In the same period, GM's US market share plummeted from 35 percent in 1990 to 23,8 percent in 2007. In 2008 that became an unthinkable reality: US consumers bought more foreign than American cars.
Faced with the successes of the Japanese competition, GM and the other American car manufacturers began to offer incentives to buy in the 500s. The goal was to keep the dwindling market share. GM offered massive incentives for customers who bought cars and trucks, with cash back between $ 700 and $ XNUMX. For a long time the actions worked splendidly. GM's sales rose again. But in the long run, the incentives only contributed to the dramatic decrease in GM's profit margin and caused the company's heavy debt.
Customers as cashback junkies
In 2007, GM lost $ 729 per car, largely because of the incentives. When it was realized that the model could not be maintained, GM limited the discounts, but with it sales also fell. No cash, no customers. The auto industry had turned customers into cash-back junkies; customers were no longer willing to pay full price.
Whether “two for the price of one” or “plus free toys” - such campaigns are so widespread that we often forget that we are being manipulated. The next time we buy a digital camera, let's pay attention to the criteria we use to make our purchase decision. It's easy to find a camera that fits your needs - size, number of megapixels, good price, well-known brand name. But one of these cameras may have an action associated with it - a free case or memory card. Given the relative equivalence of properties and performance, that little extra is often the decisive factor in a product. In the B2B area, this is called »value enhancement«. The principle is always the same: to give something away to reduce the sales risk.
The peak of manipulation: 40 percent of customers involuntarily forego discounts
As with the price, you can see that actions are successful. Action manipulation is so widespread in retail that the industry gave a name to one of the principles applied. You call this abandonment rate. The abandonment rate measures the percentage of customers who do not take advantage of the promotions and instead pay full price. This usually happens when buyers fail to attend to the formalities necessary to claim the discount, a process that has been deliberately complicated or impractical to increase the likelihood of errors or passive attitudes and to keep abandonment rates high.
To take advantage of discounts, the customer usually has to send a copy of a payment confirmation or cut out the bar code on packaging and fill in a discount form with product details and detailed information on purchasing behavior. Submitting the wrong packaging or omitting a detail in the application form often delays the payment of the discount by weeks and months or makes it invalid. The discount industry also has a name for customers who simply don't care about applying for discounts or never redeeming the discount coupons they receive. These are the so-called dropouts.
For business, the short-term advantages of discounts and other manipulations are obvious: a discount ultimately leads the customer to pay the full price for a product that he possibly only bought because he expected a partial refund. But around 40 percent of customers never get the discount they expected. You could call this a tax on ill-organized buyers, and retailers are counting on it. Market surveillance has tightened control of the discount industry, but with moderate success. The redemption of discounts remains cumbersome, and that means money gain for the seller. A brilliant manipulation. But at what price?
3. Manipulation through fear
If someone robbed a bank with a banana in their pocket, the charge will be armed robbery. No one was actually in danger of being shot, but it is the victims' belief that the robber has a real weapon in his hand that counts for the law. For good reason. The robber threatens his victims because he knows they will obey him out of fear. Playing with the fear of a real or imagined threat is probably the most effective way of manipulating a crowd.
Fear makes facts secondary
"Nobody's been fired for hiring IBM," said an old commercial that reflected behavior dictated by fear. People in procurement departments whose job it is to find the best suppliers for their company turned down better and cheaper products only because they were offered by small companies or unknown brands.
The real or imagined fear that the job would be at stake if something went wrong was enough to neglect their duties, and even harm the company's interests. When fear is involved, facts are secondary. Deeply anchored in our survival instinct, it cannot be fought with data and facts.
This is how terrorism and parenting work
This is how terrorism works. It is not the statistical probability that someone might become a victim of a terrorist attack that can paralyze the population, but the fear that it might actually happen. The power of fear to manipulate us is, of course, mostly used for far more harmless purposes. We use fear as a tool in raising children. We use fear to encourage people to obey a code of ethics. Fear is regularly used in advertisements from government agencies, for example in campaigns for the safety of children, in AIDS awareness campaigns or to promote the use of seat belts.
Television viewers in the XNUMXs were bombarded with anti-drug advertisements, including one run by a government agency under a national teen drug abuse program: "This is your brain," said a man with an undamaged egg in hand. Then he beat the egg into a frying pan with splashing hot oil. "This is your drugged brain ... any questions?"
This is how fear works
Another line-up aimed to scare the hell out of cheeky teenagers: "Cocaine doesn't make you sexy ... it makes you dead." Politicians who claim their opponents are raising taxes and cutting security expenses, or special clips on the evening news that create the impression That health and safety will be at stake unless the television is turned on at 23 p.m.; in one case as in the other one tries to scare. Companies also work with fear; they use our deep-seated insecurity to sell products. We are told that something bad could happen to us if we fail to purchase a certain product or service.
"Every 36 seconds a person dies as a result of a heart attack," says an advertisement for a local heart specialist. “Do you have radon in your house? With your neighbors, yes! «Can be read on the truck of a company that offers services for checking pollution levels in households. And then of course there is the insurance industry, which offers life insurance with the slogan "Before it's too late". Anyone who links sales with the warning that there could be negative consequences if one does not buy a product is putting the buyer under more or less pressure at gunpoint to buy the "better" product. It may be that he only works with "bananas". But it works.
4. The power of desires
"Quitting smoking is very easy," said Mark Twain. "I've done it a hundred times." Fear drives us to avoid the negative. Messages that address our desires draw us to what we yearn for.
This is how the power of desires works
Salespeople often emphasize the importance of creating claims, that is, offering someone something they would like to have and giving them the opportunity to get it faster with the purchase of a certain product or service. "Six steps to a happier life", "With abdominal muscle training to dream size", "Get rich in just six weeks." They lure us with things we want or promise us to become what we want to be.
While positive, wishful messages are most effective in addressing those who have no discipline, who do not believe that they will be able to achieve their dreams without help (which at times applies to each of us for a variety of reasons). In an exaggerated way, one could say that we can easily be persuaded to become a member of a fitness center with a message of wish, but that we have to be inspired to actually go there three times a week.
Who is susceptible to desire manipulation?
Anyone who has a healthy lifestyle and is physically active regularly does not respond to slogans such as "In six steps to your dream weight". Those who do not have a healthy lifestyle are particularly vulnerable. It is known that many people test diet after diet in order to get a dream figure. But no matter which diet you choose, it is always emphasized that regular exercise and a well-balanced diet will improve results.
In other words, it takes discipline. Every January, when we try to make New Year's resolutions for a healthier life a reality, enrollments in fitness centers increase by twelve percent. But only a fraction of the fitness enthusiasts still visit it at the end of the year. Wish messages can provoke behavior, but it won't last long.
Wish messages in the B2B area
Wish messages are not only effective in the consumer market, they also work in the B2B area. Large and small company managers want to be successful; they make decisions, hire consultants, and implement systems to achieve the desired goal. Not that the systems are bad, but we are often unable to implement them consistently. I can speak from my own experience here. Over the years I have implemented many systems or processes to "achieve the success I want," but always got back to my old habits within two weeks.
What I want is a system that avoids systems that fulfill all my wishes. But I probably wouldn't use it for long. The short-term answers to long-term wishes are also present in the world of business. A friend of mine, a management consultant, was commissioned by a billionaire company to help implement goals and wishes. The problem was that the managers preferred the faster, cheaper solution to the better, long-term solution for all questions, as she explained to me. Like notorious dieters, "they didn't have the time or money to get it right the first time," she said of her client, "but they always have the time and money to do it all over again."
5. Manipulation through peer pressure
"Four out of five dentists recommend Trident," the chewing gum advertising says, to make the product palatable. "A double-anonymized study at a top university came to the result ...", it says in an information insert. “If the product is good enough for professionals, then it's good enough for you too,” the advertising hype continues. "With a million or more satisfied customers" advertises a different advertising. Peer pressure is built up.
Peer pressure creates fears
Sellers claim that the majority of the population or a group of experts prefer their product, trying to convince the buyer that their products are simply better. The peer pressure exerted in this way works because we believe that the experts know more than we do. Peer pressure does not work because the majority or the expert is always right, but because we fear that we are wrong ourselves.
Sometimes celebrity advertising is used to create peer pressure among other selling points. "If he has," the suggestion goes, "then it must be good." That makes sense if, for example, Tiger Woods approves golf products from Nike or golf balls from Titleist. (In fact, it was because of the deal with Tiger Woods that Nike entered the golfing world.) But Tiger also advertises General Motors cars, management consulting services, credit cards, groceries, and Tag Heuer watches that “specifically for golfers «3. Incidentally, the watch has a shock resistance with a maximum value of 5 g, a shock to which the golf ball is more likely than the golfer. But Tiger is promoting it, so it has to be fine.
This is how advertising with testimonials and celebrities works
The advertising of celebrities should address our desires and our longing to be like them. This was shown most clearly in the Nike campaign “I want to be like Mike” 4, which tried to convince young people that they could become like Michael Jordan if they used Nike products. With many celebrity advertisements, however, it is difficult to see a connection. Sam Waterston, famous for the TV series “Law & Order”, advertises the TD Ameritrade online sales platform, for example. In his case, it's not entirely clear what an actor who became famous for convicting manic killers is worth to the brand. It is probably his "trustworthiness". But not only the easily impressed youngsters are the target of peer pressure.
Most of us have been pressured by a salesperson at one point or another. Has a sales person ever tried to sell you an "office solution" with the argument that 70 percent of your competition uses the services of his company, so why not you too? But couldn't it be that 70 percent of the competition is made up of fools? Couldn't it be that those 70 percent were being offered an incentive or a price so low that they simply couldn't resist the temptation? This behavior has only one goal: to create buying pressure. We should get the impression that we are missing something or that everyone but us knows about it. Better to go by the majority, right?
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