Top techniques that make you spend
Marketing techniques are all around us – from the moment you get up and check your email to the supermarket trip in the evening, marketers have got you pegged. We took a look at five strategies used by retailers to make you spend.
1. Loyalty rewards programs
Unfortunately, loyalty rewards programs aren't just about trying to offer you a better deal or free goods. In fact, a key purpose of loyalty programs is to motivate regular spending behaviour, as Adam Posner writes in his book Give Back To Get Back: 9 Steps To A Profitable Loyalty Program.
When we took a look at loyalty rewards programs several years ago, we found statistics highlighting this loyalty card effect. For example, in 2009, Myer figures found that on average, in a year:
- customers spend $795 in store,
- loyalty card customers spend $822, and
- loyalty card customers who've registered their email address spend $971.
Research from The Loyalty Point also supports this theory, with findings that 80% of consumers buy more from companies whose programs they are a member of.
2. Data-driven marketing
Ever noticed a marketing email or ad that seemed not only specifically relevant to you, but creepily so?
Loyalty programs (along with making you statistically more likely to spend up) are also collecting valuable information about your shopping habits. This can then be used to send you targeted advertising. Sophisticated databases store information on the specific products you buy which can be quite revealing, such as showing if you smoke or seek out organic produce, or if you have a preference for certain snack foods.
Add to this the information your web browser is collecting on you and marketers are likely to have a pretty full picture of your lifestyle. When you use the internet, you leave small pieces of information about the sites you've visited, search terms and your computer's IP address. These crumbs of information are called cookies. This trail is collected into data banks that can be mined for information about your internet habits. It's often then used by advertisers to create user profiles and target ads towards you and your specific areas of interest.
3. Strategic shopping centre design
If you've ever felt lost or disoriented in a shopping centre, it's probably no mistake. Shopping centres can use tricky architecture and subconscious marketing to keep you in there – the idea being that the longer you linger, the more impulse buying you'll do.
Strategic floor plans can channel customers around the centre, with the goal of maximising unplanned purchases. The big department stores and supermarkets (also known as anchor stores), for example, are placed at opposite ends to maximise the chances of you walking from one end to the other. The secondary attractors (shops you'd go to no matter what, such as banks and the post office) are placed in the most far-flung or isolated corners, to get you passing other stores on the way.
Other features, such as few windows and a lack of clocks, may help disorient us and encourage us to lose our sense of time. And music can be used to speed us up or slow us down – shoppers have been found to walk in time with piped-in music, so it will likely be slow and soft in the mall.
4. Supermarket specials
We've all been to a supermarket to grab a few ingredients for dinner and ended up with a whole trolley worth of food we don't need. Specials are a common occurrence at the supermarket – in fact, according to UBS Global Research analysts, promoted products account for as much as 40% of sales of products at Woolworths.
The words "special" play on our subconscious, setting off a psychological process in our minds, consumer psychologist Dr Paul Harrison told CHOICE when we looked at supermarket tactics. "If something is labelled 'special' we think it must be good. It also feeds into a theory known as the scarcity effect," he says.
- Not so 'special' offers We may be tricked into thinking we're saving big bucks on a 'special' when they may actually be on sale longer than they're tagged at the 'usual' or 'before' price. For example, in 2013 it was found that UK supermarket chain Sainsbury's sold Carex Aloe Vera & Eucalyptus Moisturising Antibacterial Handwash (250ml) for $1.80 for just seven days and then sold it at the lower "special" price for 84 days.
- Multi-buy offers Supermarkets may offer "3 for $3"-style offers using flashy advertising signs when products are still $1 individually. Or they may just lure you into buying more products than you need. For example, when you see a multi-buy offer, such as three bags of pasta for $3, that just means you have to buy a minimum of three bags to qualify for the unit price of $1. So if you actually only need four bags of pasta, buy four, not six.
5. The scarcity effect
Ever gone to book a bargain flight online and been told that you'd better book soon because there's "only two seats left!" at that price? Oddly enough, our investigation into airline pricing tactics found such claims shouldn't be taken literally. But our fear of missing out on the ticket at that price encourages us to book quickly.
That's because marketers are able to increase the perceived value of products and services by manipulating the perceived scarcity of them. This is one of the six principles that encourage people to say yes, as coined by author Robert Cialdini in his book Influence: The Psychology of Persuasion. The scarcity tactic can be seen in marketing practices like limited editions of products and prestige pricing of products and services, or perhaps a shortage of iPhones when first released.
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