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Was “Black Thursday” a Stupid, Stupid Idea?

December 29, 2013 1 comment
Black Friday Lines

Black Friday Lines

This year many major retailers, spurred by competition and disappointing sales, decided to start their usual Black Friday deals a day early. Their reasoning was twofold: 1) an earlier start would help them get a jump on any competitors who waited until Friday morning to lower prices, and 2) a larger time window for their discounts would allow more potential shoppers to take advantage of discounts.

This brilliant idea may have resulted in the worst Black Friday sales results in years.

Not long afterwords, many U.S. news outlets started running articles like this and this. While the concept of Black Friday has been eroding for years (Kmart and many online retailers had started their deals early in years past), this was the first year where the customary effect of Black Friday was truly upset. Local news stations reported by and large that the Black Friday crowds lacked the intensity of previous years. Retailers had more empty parking spaces. In water cooler conversations, people commented that they simply wouldn’t bother getting up at 5am this year.

The 2013 post-Thanksgiving weekend sales were successful only from a very specific viewpoint: public safety.

Traditionally, the Black Friday concept makes very good use of one of Robert Cialdini’s “Weapons of Influence”: Scarcity. In this case, it’s not the purchased item that’s scarce, but the deal itself. In the past, Black Friday discounts have been available only for a couple hours, or until stock runs out. This creates an insane, in some cases dangerous amount of urgency. There is nothing so motivating as a perceived dwindling supply of something you perceive to be valuable. In this case, the opportunity to buy a $400 item for $150.

So how come, when retailers started these sales on Thursday, we didn’t see the same chaos happen a day earlier?

It’s because they left the window open through Friday. By increasing the amount of time that the discounts are available, retailers destroyed the perception of scarcity. No doubt they thought that there would be some disruption to scarcity, but that expected this to be offset by increases in the over number of patrons. Instead, it looks in retrospect as if scarcity has a tipping point. When the window was only a few hours wide, consumers would plan their whole day around getting into the store to get the deal. Now, with over 24 hours at their disposal, maybe they’ll pick up the item they wanted on their way to doing something else. It’s okay; there’s time enough to go grab the thing.

Imagine the horror of U.S. retail executives when our Black Friday ended up being a busy but fundamentally civil experience rather than the bloody, hair-pulling, bystander-trampling reality show they were hoping for.

As we mentioned before, it’s the availability of a certain deal that’s scarce, not the item itself. The concept of supply and demand tells us that demand increases when there’s not enough of a certain item to satisfy all potential consumers. But in this case, there is enough of that item. Retailers create artificial shortages with limited-time offers to stir up demand that would be otherwise placid. Sometimes it’s in the form of a limited time price. Other times it’s a seasonal offering like the famous McDonalds McRib or Shamrock Shake. If these items were available year round, people would certainly have more opportunity to buy them. But by limiting their availability, the resulting demand increase creates more overall sales than would the year-round availability of the product.

One final point on economics. Classical economic theory holds that you can increase or decrease demand through changes in price, although some goods and services are more elastic in this regard than others. But here we see an anomaly: the same price level creates two different levels of demand. Last year, price-drop x created a certain level of demand. This year, the same price drop created less demand than last year. That’s not supposed to happen in classical economic theory. If people are always acting in their rational self-interest, the demand created by price-drop x should have been similar in both years. It wasn’t until Behavioral Economics was introduced by Daniel Kahneman and Richard Thaler that irrational decision-making factors became a part of economics. Consumers under classical economic theory cannot be “stirred-up,” even though we know in practice that they can.

The Anti-motivational Speech – A Top 10 List

December 10, 2012 5 comments

When I was 11 years old, I saw a speech by 80’s-era motivational speaker Joe Charbonneau. I thought it was the coolest thing ever, and from that day forward wanted to be a public speaker of some kind.

That star faded a little bit as I got older, and I could peek behind the curtain of the tropes and platitudes that seemed so brilliant at the time (no disrespect to the late Mr. Charbonneau). This kind of speaking is now (rightly) considered more self-parody than serious boost to personal development. I wish I could say that the genre is no longer taken seriously, but speakers like Tony Robbins are now giving mega-concerts to thousands of their faithful. There is, when you think about it, no substantive difference between Tony Robbins and Joel Osteen or Rick Warren. They deal in the trade of temporary ecstasy.

I was looking through YouTube for examples of good modern motivational speakers, just to see if there was anyone out there with some substance. The exercise was depressing. The field has not changed much from the 80’s; the most successful speakers are still blow-dried white guys talking about getting you to change your state of mind. Many are hired by their fellow blow-dried, white corporate managers who believe that their workforce is unmotivated because of some attitudinal flaw that only affects the middle class.

What’s worse, the content is mostly schlock. Many famous systems are based on Neuro-linguistic Programming, a controversial, unproven form of hypnosis. Recently, on an international flight, I saw a BBC documentary called  “Money” about the proliferation of wealth creation seminars in England. It was about how poor and middle-income people would pay thousands of pounds for materials about attitude transformation. They would be instructed to meditate in strange ways several times a day, visualizing themselves with tons of cash. It was sickening, like an Amway seminar had slept with a Baptist revival.

I still want to be a speaker, and after having listened to a lot of modern motivational speeches, I think I have a useful trial theme. I call it, “The Anti-motivational Speech: How To Motivate Yourself and Those Around You By No Longer Being a Fucking Idiot.” I think it’s really going to save the world. It turns out, even smart people get themselves into really stupid habits, and transform into idiots slowly over time. You might be behaving like a total idiot and not even know it! I have ten points so far that I’m thinking about including, and I invite you to submit suggestions if I’ve missed anything important. Read more…

The “Shaken Self”: Self-Confidence and Product Choice

June 30, 2011 2 comments

I’m always excited when science finally catches up with marketing.

M&MsA man walks into a sociologist’s office, and is asked to write a short essay highlighting his healthy life habits. He does so. Afterwards, he’s offered a choice of two small rewards for his work: an apple, or a pack of M&M’s. He makes his choice and leaves.

After that, another man walks into the sociologist’s office, and is asked to write a short essay highlighting his healthy life habits. As he’s about to begin, the sociologist asks him to write it with his non-dominant hand. After he does so, he is offered a choice between an apple or a pack of M&M’s.

This second man, who wrote with his non-dominant hand, is significantly more likely than the first to choose the apple. Why would that be?

A lot of excellent research is starting to emerge dealing with the relationship between “state” self-confidence (short term mental states) and purchasing habits. The study I’ve just referenced came out of Stanford last year. It was published in Advances in Consumer Research by Leilei Gao, S. Christian Wheeler, and Baba Shiv, and talks about the concept of the “shaken self.” Read more…

Rethinking the Core Human Needs

January 31, 2011 110 comments

Okay, everybody…I need your help with this one.

Normally when I post an entry, it’s because I’ve reached a conclusion. This one is different. It’s unfinished. I’ve thought about this entry for a long time, and I’ve taken it a certain distance, but I need some help and feedback to finish it. In this entry, I talk about a new way of thinking about our core psychological needs. I’ve got a good start, but there are some inconsistencies I discuss at the end, and I’m not sure what to do with them yet. So, when you get to the end, please let me know your thoughts. Here we go:

There’s a good reason that Maslow’s Hierarchy has survived as long at it has: it covers every rational need you could think of. When you look at the model, it just strikes you as sensible and exhaustive. The first level of needs is Physiological, and you think, well that’s obvious. Without food, water, air, and the like, we don’t make it very long…so I can see that. What’s next? Safety needs, like health, property, security, etc. That also makes a lot of sense. When our immediate security is threatened, we feel a ton of anxiety. So that one is also easy to buy. What’s next?

English: Maslow's hierarchy of needs. Resized,...

English: Maslow’s hierarchy of needs. Resized, renamed, and cropped version of File:Mazlow’s Hierarchy of Needs.svg. (Photo credit: Wikipedia)

Next is Love and Belonging. Possible to survive without it, be we know that people have gone seriously nuts in isolation. So yeah, that makes total sense. From here on, we get a little more abstract. Fourth level is Esteem. These are qualities like self-confidence, respect, and achievement. Who among us doesn’t know someone who’s seriously off-kilter because of how they perceive their own value? What the hell: who among us hasn’t struggled at some point – even a little bit – with issues of how we perceive our own value? So that level seems to belong. The fifth level is Self-actualization, which sounds nice, but few of us really have an internal notion of what that is. It sounds like something that would really make us happy, if we ever got there.

These categories are broad, and seem to capture everything, but actually, they don’t quite. If I could pick one bone with this otherwise excellent model, it’s that it emphasizes rationality. We’ve since come to learn about man that not only is he far from rational, but that his most interesting tendencies seem on the surface completely irrational. The man with the gambling addiction, which of Maslow‘s needs is he fulfilling? How about the woman who drives a wedge between her ex-boyfriend and his new girlfriend? How about the friend of yours who has to top everyone’s experience story, like that Kristen Wiig character from Saturday Night Live?

Kristen Wiig as Penelope, the Attention Seeker

Kristen Wiig as Penelope, the Attention Seeker

One could argue all three of those examples into a Maslow category, but it feels like a stretch. I wanted to understand our core psychological needs and drives in a way that spoke more directly to our everyday lives. So I’ve been keeping my eyes open for a new model.

I stumbled upon a talk that performance coach Tony Robbins gave to the 2007 TED Conference (I geek out and watch those talks whenever I can). He espouses his own model of six core psychological needs. While I am not a drinker of the TR Kool-Aid, I thought his model was interesting for a couple of reasons. His six needs are 1) Certainty, 2) Uncertainty, 3) Significance, 4) Comfort and Love, 5) Growth, and 6) Contribution.

His model is interesting for a number of good reasons. First, he is the first person I’ve known to list “uncertainty” as a need. It’s irrational to need uncertainty; if we were all acting in our own rational self-interest, we would want life to be as predictable as possible so that we could reap the most advantage. We typically try to eliminate unpredictability, but Robbins acknowledges that we also crave it. He also posits that we need to contribute to causes greater than our individual selves as a prerequisite to fulfillment. One could argue this is implicit in Maslow’s self-actualization, but this model gives contribution the individual emphasis it really deserves.

Tony Robbins at the 2007 TED Conference

Tony Robbins at the 2007 TED Conference

I played with a couple other different needs models as well. I took a look at Max-Neef’s “Human Scale Development,” Cialdini’s Influence Triggers, Jonathan Haidt‘s Moral Matrix, David McClelland‘s Achievement Motive, and some other ideas from Dale Carnegie, Napoleon Hill, and other contributors. But something keeps bringing me back to Robbins’ contribution, because I see insights in that model that I don’t really see in some of the others. True, there are examples that I can’t make fit into Robbins’ model, but I don’t think that’s as much a problem with the model as it is with its phrasing. I think that using Robbins’ model as a starting point, we can come up with a truly psychologically insightful model of rational and irrational needs.

Here’s what I’ve come up with so far. These are the six categories of psychological need as best I can articulate them (physiological needs are omitted). They are not mutually exclusive, meaning that one event can satisfy multiple needs at once. It’s not perfect, and I’ll go through some inconsistencies at the end. Please leave comments with your ideas for how to refine this idea. Read more…

9 Strategies for Influencing Others

December 18, 2010 2 comments

The Hay GroupThe Hay Group is a management consulting firm that does its own research into motivation strategies and produces self-assessment materials for students and clients. I recently took one of their assessments for an MBA class on leadership strategies. The assessment was called the “Influence Strategies Exercise,” and told me how much I rely on each of nine separate influence strategies. Their workbook then went into detail on each strategy, and the context under which it would work. Here are the nine strategies: Read more…

My Opponent is Hitler – Why Negative Ads Work

October 25, 2010 2 comments

Negative Ads in Election Campaigns“I am a Christian war hero charity donor who will create jobs, lower taxes, increase Medicare and make the sun shine every day. My opponent dresses in women’s clothes to perform Satan-worshiping ceremonies, when he’s not luring small children into his unmarked van.”

Please take a look at these two example TV spots from candidates running against each other fr the vacant U.S. Senate seat in Illinois:

Here is the first, from the Kirk campaign against Democrat Alexi Giannoulias:

Now here’s the “Alexi for Illinois” ad about Republican Mark Kirk

Crazy from Negative AdsAs negative ads go, these are two of the less colorful of the 2010 midterm election cycle. No one is portrayed as a demonic sheep, for example. I see these ads multiple times a day, particularly on Sunday mornings when the talk shows are on.

I’m sure that like me, they both make you roll your eyes. One candidate is a military intelligence veteran who’s here to save us from a mobbed-up failed banker, and the other is a family business owner and staple of the community who is here to save us from a corporate elitist who takes away money from laid-off workers, and eats his young.

We know that both are obviously disingenuous. And they paint a picture of two candidates who are basically equal in everything but voting record: equal in cynicism, equal in lack of class, equal in hackery, equal in personal agenda, etc.

Yet, these ads work. They work even though we think they don’t. They work even though we believe ourselves better people than those who would be affected by such obvious hyperbole. They just work. They’ve always worked.

Here’s why negative advertising works, even though we believe ourselves to be unaffected by such classless tactics. Read more…

The Secret Triggers Behind The American Identity

September 12, 2010 1 comment
Wagon Circle

"The white folks wouldn't let us into they're wagon circle, so we made our own." --Blazing Saddles

Picture a wagon train from the old west. What do they do when they encounter an Indian war party? They circle-up, point all their guns outwards, and pray.

That picture is the prototypical metaphor of America. It goes a long way to explain who we are and why we want what we want.

About six months ago, I started wondering why the Tea Party had caught on so strongly in America. There are several general reasons, but no obvious causes for such strong emotion. Its core platform has to do with deficit spending, which does not have the emotional wedge of abortion, immigration, crime, or national security. The movement seems to be thriving on an anti-taxation platform despite the fact that so far, taxes have not increased. By contrast, Clinton actually raised taxes midway through his first term, and it did not spark the visible outcry we see today.

The Tea Party makes a nice, visceral example of American moral and political outcry, but my questions are broader than that. Is there some subtle nerve being hit here, that runs deeper than the obvious surface issues? Some secret anxiety that runs through the core American identity, of which this is just one example?

It seems to me that secret triggers are working below the visible surface of these issues. And I believe that these triggers are core to the fundamental American political traditions and beliefs. Read more…