| What You Don't Know About Marketing |
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| Marketing 101 |
| Written by Matt Handal |
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This combines a series of posts about the basic concepts behind marketing.
What is Marketing? Marketing is a very broad term, especially in the AEC industry. If you have been hired in a marketing position, it is likely for you to be performing tasks that you may have previously thought as public relations, sales, advertising, or even graphic design. Because we use such a broad definition when talking about marketing, it becomes even more imperative that we try to define what exactly you are doing when you "market." All marketing activities that you embark on will have one true goal: to influence the decisions of others. This is probably not the definition you learned in marketing 101. But think about it. A marketer's goal is to influence your decisions. That decision might be whether or not to buy a product, vote for a candidate, donate to a charity, run a 5k, give someone a piece of information, or to even influence someone's else's decision. If you have ever chosen to do one of these things yourself, chances are marketing played a part in your decision. Marketing is so abundant in our society, that oftentimes we don't even notice it. But companies pour billions of dollars into marketing efforts because they are so effective at influencing our decisions. Why Influence People's Decisions? To date there is no proven form of mind control. Until there is, people have the ability to make decisions of their own free will. So marketers are challenged with trying to make us do something we might not normally decide to do. Because our decisions can't be controlled, influencing them is the next best thing. Marketers use a variety of tools or methods to influence our decisions. Let me give you an example on how our decisions are influenced. I bought Apple's iPhone 3G cellphone. This was the second iPhone that Apple had released into the market. The process I went through to make my purchase decision seems pretty typical.
Why did I buy this phone?
The day the iPhone 3G came out, my boss came to my desk. "Did you get it?" he asked. He explained that there were lines around the block to get this phone. Immediately after work, my wife and I went down to the local Apple store and got it line. Even at 6:30pm, the line was out the door and around the block. One simple thought kept me and my wife glued to that line for the next four excruciatingly boring hours..."what if they run out of iPhones?" In our minds, the iPhone was now a scarce commodity. Looking back, the iPhone was a good purchase for me. But how much of the decision to buy the iPhone was my own and how much of that decision was influenced by others? To determine this lets look at how humans make decisions. This is the second in a series of posts about the fundamental principles behind marketing. How Do Humans Make Decisions? The human decision process is not a mystery. It has in fact been the subject of numerous research studies within the scientific community. For years, scientists have been watching us and recording how we behave and what causes us to behave in the ways that we do. Much like Jane Goodall watched and recorded the behaviors of gorillas, scientists are watching us and tracking our behavior even as we speak. They have been recording and compiling this behavioral data since before most of us were born.
Fixed-Action Patterns One of the most interesting things they found is something called fixed-action patterns. To explain this, let's take a step back to the animal kingdom and the world of wild turkeys. As the momma turkey's chicks hatch, she listens for their "cheep cheep" sound. If she hears it, she knows that the chick will be strong enough to survive. If she doesn't hear the "cheep cheep," she figures something is wrong and instinctively pecks her chick to death. This is what you might refer to as an animal instinct. The turkey's natural enemy is the polecat. If a polecat comes anywhere near momma turkey and her chicks, the turkey will viciously attack it, in an effort to protect her chicks. Researchers found that even a stuffed polecat would elicit this nasty response from the turkey. However, when researchers brought in the stuffed polecat and introduced a recording of the "cheep cheep" sound something interesting happened. Momma turkey did not attack the stuffed polecat. It instead protected this natural enemy as if it were one of her own chicks.
This is what's called a fixed-action pattern. When the turkey hears the "cheep cheep" sound, it automatically responds as if there is a chick present. Fixed-action patterns are mental shortcuts that help the brain by eliminating the need to make conscious decisions about every single action. This fixed action pattern has such a strong control of the turkey that it will embrace its natural enemy just because it makes the "cheep cheep" sound and murder one of her own chicks if it does not. As you can imagine, fixed action patterns are not confined to the animal kingdom. Much like our animal brethren, humans have them as well. Lets give an example of this. Judgmental Heuristics Judgemental heuristics are principles or methods by which humans make assessments or judgments of probability simpler. These heuristic are often very useful but sometimes they lead to systematic errors, much like the error the turkey makes with the polecat. There are several categories of these judgmental heuristics: Representativeness Heuristic Despite our best efforts, we often "judge a book by its cover." Say you need an extra man out on the construction site. You walk to the curb and see two day workers. One is dressed like a construction worker, the other is dressed like a hippie. Who do you approach first about your open position? As much as we would deny it, and studies show that most of would, we would most likely approach the construction worker first. Because he is dressed the part. We make decisions sometimes based on how things look to us. If you want proof, go find someone over 6'3' and ask him or her how many times have they been asked "Do you play basketball?" Odds are the answer is many times. That's because we associate tall people with basketball players in our minds. This is the representativeness heuristic.
Another example of representativeness heuristics is the old notion of "you get what you pay for." Over time this has mutated in our minds into expensive equals good. For example, let say you go to the electronics store and look at two stereos. One is priced at $100 and another is priced at $1,000. Most of us would concede that the $1,000 stereo will provide better sound quality. But does it really? Because the one stereo is priced much higher, we assume that it is of better quality. In his book, Influence: Science and Practice, Robert B. Cialdini tells us of a jeweler whose sales associate accidently doubled the price of some of her poorest selling items, which resulted in a dramatic increase in sales. If you are anything like me, you might say. "I would listen to the stereos. I don't make assumptions like that." That's exactly what a group of Canadian voters said when asked whether the attractiveness of a candidate factored into their vote. 73% of them said that it wouldn't. But researchers found that candidates perceived as attractive received two and a half times as many votes as unattractive candidates. Availability Heuristic We also make decisions based on the information that is readily available to us. For example, if you were the last man on earth, it would be easier to convince women that you are the most attractive man that ever lived. This is because they may not have anyone else to compare you to. If a client says, "If I only knew about you guys a year ago..." That's the availability heuristic working against you. A client can not hire you if they have never heard of you. Or they can't hire you if they are unaware that you provide the service that they need. Attitude Heuristic We also base our decisions about how we feel about our options. I was once told of an engineer that had an interesting system for culling through the multiple proposals she would receive. She would make two piles. One that she would read and another for the proposals she would not even look at. How did she determine which proposals went into the "read" pile? These were the proposals of the firms that she thought were "the players." Meaning that she felt comfortable that they could do the work based on how she felt about the firm's capabilities and people. Many times our personal attitude about individuals affect our perception. If you saw someone you liked walking across the street trip, you might think that they tripped on a branch or a piece of broken sidewalk. What if you didn't like that person? You might conclude that person is a klutz and tripped over themselves.
The Weapons of Influence Now that we know the mental shortcuts our minds use in the decision process, a question arises. What can you do to influence other people's decisions? In his book "Influence: Science and Practice", Cialdini compiles the most compressive and well researched book on this subject. In the book, Cialdini details what he calls the "weapons of influence." These are tools that marketers use to influence our decisions. Research regarding these weapons of influence includes some of the most famous experiments in human behavior. Cialdini outlines the various research experiments that show how and why these weapons work. Once you understand the weapons of influence, you will also start to understand which marketing "best practices" work and why. You may even become aware of how bombarded you are by these weapons on a daily basis. What are the weapons of influence? Reciprocation Reciprocation is one of the most powerful weapons. It is based on the fact that humans do not like to feel indebted to anyone else. When we do, we will look for ways to get rid of this feeling. All human societies subscribe to this rule. There are two parts to reciprocation: giving and asking. If you are able to get someone to feel indebted to you, they are much more likely to respond positively to your request. You make someone feel indebted to you by giving them something that they perceive to be of value. This could be information, opportunity, gifts, recommendations, etc. The result is not necessarily a one to one ratio. Once someone feels indebted to you, they will do whatever it takes to get rid of the feeling, which may mean a much greater return to your giving investment. One experiment conducted, known as the Regan experiment, resulted in a 500% return on investment. The user is in control of this weapon because you don't even have to give something that the other person asks for, or even wants, in order for this to work. You can decide what to give and when. This is why charities that send out personalized return address stickers are much more successful at receiving donations than charities that just ask for donations. Its the rule of reciprocation in action. Reciprocation also works with concessions. There is a very old sales tactic called reject-then-retreat. This is when a salesperson asks you to buy something reasonable but a little bit outside your price range. When you decline, the salesperson presents you with the deal that he/she really wants you to buy. Because the salesperson provided you with a concession ( a more affordable option), they know that you are more likely to say yes. One classic example of this is when a used car salesmen "goes into the back" to have it out with the boss over the price of a car. These people are using reciprocation as a tool to influence your decisions. Be aware that studies show that the first offer must be realistic, or the reject-then-retreat tactic will backfire. Commitment/Consistency As soon as a gambler puts money down on a racing horse, something interesting happens. Anxiety leaves and they begin to feel confident that they made the right choice. This is because once we make a choice and take a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment. This is the weapon of influence known as commitment/consistency.
Here is a great example of how marketers use this weapon. Every year around the holiday season a new "hot toy" presents itself. Whether it is the Furbie, Tickle Me Elmo, Cabbage Patch Kid, or the Nintendo Wii, these hot holiday items seem to be nearly impossible to get a hold of before the holidays. It seems foolish for the toy manufacturers not to stock enough product to meet the high demand. But it is not foolish, its actually very savvy. You see, the toy companies use the commitment/consistency weapon very effectively. Before the holidays they heavily promote a toy to their target audience (your kids). If their campaign is successful, your kids will tell you they want this hot new toy. The toy companies will not produce enough of the toy to meet the demand. This is because they know that parents often fulfill the promise of hard to find gifts after the holidays. And the toy companies know that when you can not get the hot toy, you will buy some other toy as a replacement present. They would rather you buy the hot toy in March, during the company's slow period for sales. Commitment/consistency is another very powerful weapon. It was the key factor in North Korea's extremely successful campaign to "brainwash" American prisoners during the Korean War. They were so successful that nearly every American prison conspired against the United States in some way or another, whether it was "rating out" fellow soldiers or giving away military secrets. The North Koreans did not achieve this with waterboarding or other forms of physical torture. They achieved it with pen and paper.
The North Koreans knew the power of commitment/consistency. Their goal was to indoctrinate American soldiers and gain compliance. They asked the American soldiers to write essays. The best essay would receive a small prize, like a pack of cigarettes or piece of candy. They would award the prize to a soldier that made a small concession, like "the United States is not perfect." The winning essay would be read over the prison's loudspeaker for all to hear. Soldiers were also brought together in groups to discuss their essays. Over time, pressured by the Koreans, the prisoners wrote down bigger and bigger concessions. And once you write something down, you start to own it. The soldiers felt internal pressure to behave in a consistent matter with what they wrote. They began to see themselves as sympathizers and began to give away secrets and rat on other prisoners to gain favor with the guards. Because the prizes were so small, they could not claim it influenced their decision to conspire with the enemy. The Koreans knew the power of committing yourself with writing and speaking. They used this as a centerpiece for their successful campaign to indoctrinate the U.S. prisoners of wars. The indoctrination was so strong that even after the war, ex-prisoners that were interviewed continued to feel sympathetic towards their captor's cause. Marketers try to get their clients to make a commitment, preferably in writing. They know that once you make a commitment, you will feel the personal and interpersonal pressure to behave accordingly. Social Proof Anyone who has ever been or known a teenager, knows the power of "social proof." Social proof is the reason we buy what others buy and do what we see others doing. When undecided, we view a behavior as correct in a given situation to the degree that we see others performing it. Laugh tracks on TV sitcoms use social proof to achieve a result. We know when we hear a laugh track exactly what it is. So, why would networks place laugh tracks in such an obvious manner? Do they think those laugh tracks make the shows funnier? The don't think it, they know it. Despite what you might think, studies show that we find sitcoms with laugh tracks funnier. This is because when we hear others laughing, we instinctively assume that the joke is funnier. Its a case of "monkey see, monkey do." The impact of social proof on our society is shocking. Studies show that each front page suicide story kills 58 additional people. A number of plane crashes typically occur after a well-publicized plane crash. You can even look at the increase of school shootings after the columbine massacre as evidence of the power of social proof. Marketers try to leverage social proof as much as possible. They show us that others like us have bought their products. They know that if we are undecided we will look to the choices of others and copy their buying decisions.
Liking Liking is a very important weapon of influence when marketing professional services. It forms the basis of what we know as relationship marketing, which will be discussed in great length. Once we like and trust someone, we are more likely to do business with them or take their advice. Dale Carnegie wrote a very famous book called "How to Win Friends and Influence People." Those who use liking make friends to influence people. What causes us to like someone? Studies show that several factors play into whether we like someone. We like people who are physically attractive. As mentioned earlier, physically attractive candidates get more votes. Studies show that handsome men in Pennsylvania receive lighter prison sentences, children associate attractive with nice, and attractive people are more likely to obtain help from a stranger. We also like people who are similar to us. These are people who dress like us, act like us, live similar lifestyles, and have common interests. This is why successful relationship marketers often mirror the body language of clients. Research also shows that we like people that like us. We prefer people who give us complements, whether we believe them or not. Although, there are limits to our gullibility when it comes to flattery. We can sense when people don't mean what they say. We like people who are familiar. The more often we see you, the more likely it is that we will like you. We like people who are on our side and dislike people who are on the other side. We find commonalities with people who have the same objectives as us. This is why people will hug strangers who root for the same sports team and start fights with fans of a rival team. We associate people with what we see them wear, say, and do. This is why TV weathermen are often blamed for the bad weather they predict. We also connect our feelings toward a person with the product they are selling. This is why many celebrities pose as spokespeople for products or companies. Even though TV celebrity Kelly Ripa probably knows little about banking or hospitals, marketers know that if you like Kelly Ripa, that positive feeling will be transferred to the product or company she is associated with.
Authority People's decisions are also influenced by authority. We believe and obey the experts. Many studies have been conducted about the power of authority. A well known experiment called the "Miligram Study" showed that when pressed by authority figures, normal people will go as far as to conduct acts that they would normally see as cruel. For marketing purposes, an authority is often someone who is known as an expert. When a dentist tells you to brush with crest, you are likely to take his advice. But how would you know this person is a dentist? Probably by the clothes they wear, the environment they work in, and certificates on their wall. So what's to stop someone from posing as a dentist? Nothing. What makes someone an expert? In the eyes of other people, it can be how they dress, act, articles or books they wrote, or what they say and to whom. In his book "Four Hour Work Week," Tim Ferris shows that you can become an expert in just about any subject in a limited amount of time. The difference between an expert and someone who knows a lot about a particular subject is simply that the expert takes steps to enhance his reputation as an expert. Successful Marketers often establish themselves or people in their firms as experts in a particular subject. This is because people often take the advice of experts. One great example of this is Mark Buckshon, who publishes construction-related news publications in Canada and the US. Mark's firm makes money through the sale of ad space. One of his primary marketing tools is a blog, newsletter, and an upcoming book about marketing in the construction industry. While you might assume that Mark's expertise is in publishing, he knows that his client base finds marketing advice much more valuable. By writing about this subject, he has established himself as an "expert", and has leveraged both the weapons of Authority and Reciprocation in one successful swoop. Scarcity Scarcity works on the premise that, by nature, we find scarcer options more enticing. Retailers consistently and successfully use scarcity as a tool. Just look at any Sunday newspaper and you will see ads that say things like "huge sale: one week only," "limited time offer," "Doorbuster sale: 9am to 11am only," "act now while supplies last." Salespeople often use scarcity to great effect. If you are buying a house, a Real Estate broker might tell you, "There are other people making a bid on this house, it might not be available tomorrow." A used car salesman might say to you, "A couple said they are coming to buy this car tomorrow, you might want to buy it today." These people know the power of scarcity as a weapon of influence. More often than not, it works. But scarcity extends further than that. Marketers often use scarcity to differentiate themselves from the competition. They might claim that they are the "only firm to successfully design a LEED-certified pharmaceutical manufacturing plant." This tactic also uses scarcity. By making your firm or product "one of a kind," you are evoking scarcity. This is why car advertisements often state qualities like "best fuel efficiency in its class." People will be more compelled to buy cars that have scarce qualities like being the best in the class. Buyers know that there is only one car that has the best fuel efficiency in that class.
How the Weapons of Influence Affected my iPhone decision Now that we know the weapons of influence and how they work, lets revisit my iPhone purchase.
Now that you understand the how the human decision process can be influenced, its easy to see why and how marketing looks to influence our decisions. |
