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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.

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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…

My First Blog Mention, and It’s a Big One!

People-triggers has been cited by Inside Influence Report!

Inside Influence Report

Inside Influence Report is the blog produced by Dr. Cialdini’s professional training firm, Influence At Work. Its purpose is to apply Cialdini’s principles of influence (and the scientific research surrounding them) to contemporary business practice. The blog lists Dr. Cialdini himself as an author (with co-authors Dr. Noah Goldstein and Steve Martin, CMCT), and follows his interviews, projects and public events.

So, this is humbling and way cool!

Inside Influence Report produces current influence-related articles based and very recent scientific research. Here’s their most recent article on the reasons people choose to “go green.” I am gratified to see that the status transaction figures into the research!

Inside Influence Report: What causes people to be keen to go green?.

The Power of Charm: How To Win Anyone Over In Any Situation

June 24, 2010 3 comments

I just recently finished The Power of Charm, by Brian Tracy and Ron Arden, which was a recommendation to me from a friend of mine with excellent taste.

This book is about projecting charm, and covers material similar to Carnegie’s How to Win Friends and Influence People, and other famous books on the topic. The authors cover techniques to come across as attentive and appreciative, so as to charm others by giving them a feeling of importance.

This book proposes improving yourself from the outside, in. That is to say, if you adopt the physical characteristics of an attentive listener, with appropriate head tilts and eye contact, you will eventually become an attentive listener on the inside. One of the co-authors is an actor, and he compares this way of working to the British system of character development (As opposed to Americans, who tend to work on inner motivations first).

Tracy (an internationally-known self-help guru) and Arden emphasize what they call the “5 A’s”: Acceptance, Appreciation, Approval, Admiration, and Attention. The book covers physical techniques in attentive listening, speaking slowly and precisely, lavishing smiles and praise, 2nd Person-orientation, etc.

These are wise traits to focus on. Everyone could become a more attentive, focused listener, and improving that trait will almost universally make one seem more likable. Likewise, we could all find more ways to give honest praise.

Here’s my thing: there’s another element to this type of material that is always missed by self-help authors. And it’s every bit as important as the five A’s. Read more…

The Six Weapons of Influence – Part 6: “Scarcity”

June 21, 2010 10 comments

So far in this six-part article, we’ve covered five of Dr. Robert Cialdini’s six “weapons of influence”Reciprocity, Commitment/Consistency, Social Proof, Liking, and Authority. Now for the sixth and final weapon, the one that may have the most viscerally powerful effect on us:

Weapon number six: “Scarcity: The Rule Of The Few”

Scarcity is the reason why someone who’s breaking up with you seems much more desirable than she did when you were thinking about breaking up with her.

The Scarcity Rule is the sales tool that is most obvious to us when we see advertising: “Sale ends June 30th”; “The First Hundred People Receive…”; “Limited Time Only”; “Offer Expires”; et cetera ad nauseum.

Remember this one well: the only thing more motivating than a limited supply of something is a rapidly diminishing supply of that same thing. It creates a hell of an itch. Now, we not only want an item for its utility, but we want to possess it simply to possess it.

When I was first learning the principles of direct response marketing, my mentor taught me early on that no promotion ever went out without a very explicit expiration. Sometimes promotional prices (set not by us but by our vendors) would be steady for months at a time. So month after month we would announce that prices would expire at the end of the month (factually true; we didn’t know for sure what prices would do in the coming month), but the month after that we would announce a similar promotion at the exact same price. This would go on for months.

But those promotions unfailingly encouraged end-of-month sales, even though the prices never changed. Why? Because the prices were expiring at the end of the month. They never actually expired, but that didn’t matter. Read more…

The Six Weapons of Influence – Part 5: “Authority”

June 15, 2010 5 comments

So far in this six-part article, we’ve covered four of Dr. Robert Cialdini’s six “weapons of influence”Reciprocity, Commitment/Consistency, Social Proof, and Liking. Now it’s time to talk about the weapon that really scares me…

Weapon number five: “Authority: Directed Deference”

The Authority Rule is the reason no one questions the guy with the clipboard at the head of the velvet rope line. Well, that and the really big bouncer dudes who flank him.

Bill Murray, studying "negative reinforcement on ESP abilities"...and hot college chicks, in Ghostbusters

Cialdini opens this chapter very dramatically, putting the reader in the hypothetical situation of participating in a research study involving negative reinforcement (electric shocks) on memory quiz answers (kinda like Bill Murray in the beginning of Ghostbusters). You’re the volunteer who receives the shocks, and there’s another volunteer behind a two-way mirror who, under the direction of the researcher, administers the shocks.

The shocks begin mild, but as the wrong answers accumulate, so does the electrical intensity. Soon it reaches the point where you yell out as you receive them. You finally scream that you want to quit the study, but your pleas get no response. The other person simply repeats the next question into the intercom.

You can’t think straight anymore, and all your answers come out wrong no matter what. The pain is searing. You stop answering and just remain silent, but the examiner interprets your silence as an incorrect response and continues administering higher voltage…

You may think the story is starting to sound like something out of Orwell, or some really bad dream. Now here’s the kicker, and this really shocked me…

This experiment was actually done with real people.

Only one thing was different.

The person receiving the shocks was an actor, pretending to be in serious pain. The experiment was not testing the quiz answers at all. It was testing the behavior of the other volunteer, the one who was administering the shocks. They wanted to see how much pain a person would be willing to inflict on another innocent person, simply because someone in authority told him to do it.

Read more…

The Six Weapons of Influence – Part 4: “Liking”

So far in this six-part article, we’ve covered three of Dr. Robert Cialdini’s six “weapons of influence”Reciprocity, Commitment/Consistency, and Social Proof. The next weapon is, in my opinion, the most powerful and psychologically interesting, and ties right back in to our conversation on status and motivation.

Mark McGwire's wife Stephanie, a former pharmaceuticals sales rep. Sigh...

Weapon number four: “Liking: The Friendly Thief”

The “Liking Rule” is the reason why there are only two types of sales representative in the pharmaceuticals industry: extremely attractive women, and extremely schmoozy dudes who come with extremely generous expense accounts. It occurs to me that I’m in the wrong industry…

Read more…