Robert B. Cialdini: Influence: The Psychology of Persuasion
A trigger in some affluent customers is the "expensive = good" trigger which can explain why a product not selling at its current price can be sold out simply by doubling the price.
These triggers are a result of the lazy brain relying on shortcuts to save energy in an extraordinarily complicated stimulus environment.
A genius sales ruse by the the Drubeck Brothers, Sid and Harry, who owned a men's tailor shop. The salesman, Sid, would admit to a hearing problem, and repeatedly request that the potential customer speak a little louder to him. Once the customer had found a suit he liked and asked the price, Sid would call to his brother, the head tailor, at the back of the room, "Harry, how much for this suit?" Looking up from his work-and greatly exaggerating the suits true price-Harry would call back, for that beautiful xxx suit, $5000" Pretending not to hear, Sid would repeat his question and receive the same answer in reply. At this point, Sid would turn to the customer and report, "He says $2000" Many a man would hurry to buy the suit and scramble out of the shop with the high-quality, luxury suit at a bargain price before poor Sid discovered his "mistake"
Contrast Principle: Someone has a choice between two things and they are presented one after another. If the second item is fairly different than the first, they will tend to see it more differently than it is. Ex. If we talk to an attractive woman at a cocktail party, and then are approached by a less attractive one soon after, the second woman will strike us as less attractive than she actually is.
Ex. 2 - In an experiment, each student takes a turn sitting in front of three pails of water: one cold, one lukewarm, and one hot. After placing one hand in hot and the other in cold, the participant is instructed to put both hands into the lukewarm water simultaneously. Even though both hands are in the same bucket, the one previously in cold water will feel hot, and the one previously hot will feel unnaturally cold despite the constant temperature of the water. The water temperature seems very different based on the nature of the event that precedes it.
How to utilize this principle - Clothing stores are instructed to sell the more expensive item first, if a customer requests to purchase two types of items. Ex. A man might balk at spending $95 for a sweater, but may decide to after just having bought a $495 suit. This is contrary to the common sense view, but massively effective.
Read both for a practical application of the contrast principle to give perspective.
Reciprocation: The old Give and Take ... And Take
The study found that Reciprocity transcends the liking/disliking biases - if a participant liked a person, they were more likely to do them a favor, but if that person had previously done them a favor, the results were the same for people that liked and disliked that person. The sense of obligation to repay that person is greater than liking or disliking that person.
French anthropologist Marcel Mausse states: "There is an obligation to give, an obligation to receive, and a obligation to repay"
The obligation to repay constitutes the essence of the reciprocity rule, but the obligation to receive makes the rule so easy to exploit.
The obligation to receive reduces our ability to choose whom we are indebted to, not many people can turn down a favor or reject an act of kindness and risk being viewed as impolite.
If you give first, often people will give back more than they initially received.
The reality if internal discomfort coupled with the possibility of external shame produces a heavy psychological cost.
Reciprocal concession is the second way to employ the reciprocity rule in a more subtle way, without explicitly asking and providing favors. In some ways it is devastatingly more effective than the straight-forward approach.
People can be moved to purchase a product not because of favorable feelings toward the product, but because the purchase request is presented in a way that draws force from the reciprocity rule.
The key is for the concession to appear like a retreat from the initial request. However if the first request is so extreme and unreasonable, the second concession will have no effect as it is not seem as negotiation in the opposing parties best interest.
If played right, you win both ways. If they accept the more grandiose offer, you win big. If they don't, you concede and have a good chance of them accepting the smaller offer. Its a case of heads I win, tails you lose.
Commitment and Consistency
"It is easier to resist at the beginning than at the end" Leonardo Da Vinci
Consistency serves as a warm and numb fortress against thought and reason.
Blind consistency can be easily exploited, and consistency can be invoked through commitments.
A survey in Bloomington, Indiana, called residents as part of a survey and asked what their response would be if asked to spend three hours collecting money for the American Cancer Society. Not wanting to seem uncharitable to the survey taker or to themselves, many people said they would volunteer if asked. A few days later, a Representative of the American Cancer Society contacted each resident and asked them to volunteer, and the result was a 700% increase in volunteers from the previous year.
Commitment can be used in business by first selling a prospect an item for cheap, where you make little or no profit, but now they are a customer, and for consistency's sake, they are more likely to make a larger purchase.
What happens is the person's feelings about taking action change, and their self-image is reformed to be beneficial to your cause
Self-image is constructed by assessment of one's actions; people will change their views of themselves to align with what they have done. Get small commitments in writing to have proof and get bigger commitments. What those around us think if us is enormously important in determining what we ourselves think is true. This can be exploited by urging a customer to follow you on social or share a purchase to get them committed to future purchases.
Ex. Housewives were asked to donate to the Multiple Sclerosis foundation, and those that were told that someone thought of them as charitable lived up to that reputation and donated more than those who had simply been asked.
People don't want to appear fickle and unstable so they will uphold their commitments to appear consistent and trustworthy.
Once a small commitment has been made, people add justifications and rationalizations and then are willing to commit themselves further. This way, some people end up complying to second request simply due to their compliance with the first, and would not have complied with the second on its own.
Social Proof - One means we use to determine what is correct is to find out what other people think is correct.
Social proof is most potent in situations of uncertainty and ambiguity, where people look to others as a crutch to determine their opinion on an uncertainty.
Another important condition that strengthens the power of social proof is similarity - it is important that we are observing behavior of people just like us.
Association Bias - the transference of traits from one object to a related, but potentially dissimilar one.
Ex. A car ad portrays a beautiful model next to the new car, in hopes that the features of the model - beauty and desirability - will transfer to the car
Influence:
Influence is determined by symbols of influence, which can be easily feigned.
Symbols include:
Titles
Prestigious titles lead to increased distortion in perception of an individual's height.
Clothes - Finely styled and fitted clothes give off an air of superiority and confidence that can influence others around you.
Trappings - such as jewelry and cars give off a powerful and intimidating aura.
Ex. A study found that almost three times as many people honked at a dingy, old car stopped at a green light than ended up honking at a prestige automobile in the same position.
Scarcity:
"The way to love anything is to realize it might be lost"
Scarcity Principle-Ideas/Objects appear more valuable to us when their availability is limited.
The scarcity principle derives its power from our deep rooted loss aversion, we cannot stand the regret of a missed opportunity.
Interesting thought: the scarcity principle turns misfits and mistakes into valuable and sought after collectors items. Ex. A three eyed likeness of George Washington on a stamp is rare and cherished by collectors despite the fact that it is useless and aesthetically unappealing.
Scarcity forces people to act quickly without really thinking or deciding in deeply rooted logic, with emotional responses prevalent
Scarcity preys on peoples shortcut to deciding value based on availability, if something has only a few copies left, it must be because the rest were sold out, and they must have sold out because they are more valuable than the other options.
Types:
Limited-Number tactic: only x left!
Deadline tactic: this deal ends in 2 seconds!!
Scarcity is most potent when doubled: ex. A meat company tells its clients that beef will be scarce in the coming months, and that the information came from a contact exclusive to the meat company. These customers purchased six times as much as customers who were not informed of any scarcity
The next question - under what conditions is scarcity most potent?
Newly experienced scarcity is more powerful than ever-present. An example being: if there were always two products available before the sales call versus if eight products sold out during the course of the sales call, leaving only two remaining, the latter situation has a heavier influence by the scarcity principle.
The most potent form of recent scarcity? Recent scarcity by increased demand.