More examples of marketing and persuasion
Santa Furious!Why? Because the Stauer company is giving jewelry away FREE and he can't compete! At least that's what a magazine ad says. How can this company make money giving away jewelry? Might it be the outrageous shipping and processing charge of $25.95, which they call "the normal shipping fee for a $200-$300 pair of earrings?" It's possible that somebody might charge $26 to ship a $300 pair of earrings, but only if that includes a hefty insurance expense. But there's not much point in insuring this pair of earrings since it's obviously worth substantially less than the $26 they charge, or they wouldn't be making a profit. Mentioning the $200-$300 figure not only provides them an excuse for claiming a high shipping charge, it also hints that their earrings are worth this much when they obviously aren't.
I would call the claim that these earrings are "free" simply untrue, but apparently it's legal to say this since they do tell you that you have to pay the $25.95. As consumers, we can't assume that the law will protect us against misleading claims.
Feel-Felt-FoundA realtor told me about this common tactic when selling a house. A client is looking at a house and has a concern about some problem, such as that the kitchen is too small. The realtor then responds with something of this form: I know how you feel about a small kitchen. I had another recently who felt the same way, but she found that the smaller kitchen was very convenient because she spent less time walking from place to place. Perhaps he actually did have a client who had this experience, perhaps not, but he knew that telling a "feel-felt-found" story was an effective way to minimize the concern of the present client.
This probably happens a lot in real estate, but could be used in other situations where a customer doesn't like some aspect of a product.
A young man (or woman) of about college age comes to your door. He lives on some street just a few blocks away, near enough that he seems like a neighbor, but far enough to explain why you don't know him. His soccer team (or any suitable sport) is raising money to go to a distant state for the championship, which it qualified for at another distant tournament. He is selling magazines. You have, of course, not read about a local team doing so well, but you probably don't follow soccer that closely. Naturally you hate to think a local athlete who's team has done so well would be denied the opportunity to play in the championship! I have heard this story twice from different people. My guess is that is was a lie both times.
We have also had people come to our door selling magazines who claim to get points for the sales they make, and they are getting pretty close to the total they need to win a trip to Disney World or a fancy bicycle. Naturally I would like to help someone like this reach her total now that she has already accomplished so much. I have heard this story three times. I don't know if they can actually win such a prize, but even if they can, I wouldn't be surprised if they started their sales with at least three quarters of the points needed to win in order to make us feel their cause was more urgent. In one case the girl doing the selling told us a neighbor had bought magazines from her. That turned out to be a lie.
Quite a few years ago some of my friends actually went door-to-door "placing" encyclopedias. They were "free" - the customer only had to commit to buying the yearbook and reference service for ten years. Of course this came to a hefty sum of money.
A friend recently said this in an email:
"I had an encounter with Worldwide Readers Service yesterday. Two young women sold me a couple of magazine subscriptions while [my wife] and I were working on a garden around the mailbox (so they had me at close range). They were nice enough but I checked with the Better Business Bureau afterwards. The company not only fails to deliver the subscriptions quite often but also does not respond well to customer complaints after such occurrences. Even worse, by far, they recruit young people to go around the country working long hours, rehearsing sales pitches morning and night, and paying for their lodging and meals while their pay is kept on the books with subtractions made, including some penalties and sometimes causing the workers to get caught in debt while hundreds of miles away from their homes."
It is sad, but when a young adult comes to your home selling something and has a compelling story, it is very likely to be a lie. The companies that hire these people may both take advantage of them and teach them that lying and deception are tools for getting ahead. We should take pains to avoid patronizing such businesses.
On a more amusing note, a man came to my door recently representing Comcast, which sells cable TV, telephone, and internet services. He gave me his business card which indicated not that he was a door-to-door salesman but rather a "Solutions Executive".
"You have definitely won one of the following seven prizes!"
This is an old junk mail trick that seems to be out of style for now, but was quite popular in the 70's. Seven very nice sounding prizes are listed in the mailing, and you have to go to some effort to find out which you get, like visit the site of a real estate sales operation. One of the prizes is a clunker that almost everybody wins, but it sounds expensive, so you doubt that's what you would win. The reason there are numerous prizes is apparently so the reader won't focus on what might be wrong with the real prize. We might see a large cash prize, a car, a color TV, etc. The cheapest prize might seem to be the color TV, which would be well worth the effort of going to the location of the sales pitch. Here are the clunkers I have heard of:
Ring around the supermarket
Ever noticed how a lot of stores are set up so you can't get from the entrance to the bread or milk without being forced way to the back of the store, past lots of items you might buy on impulse? It's not accidental.
"You may have already won $1,000,000."
We're probably all used to the way they try to give you the impression that you're in the "almost a winner" category, when you're really in the same boat as the other fifty million people who got the mailing.
There's an opportunity to buy some magazines or some other product, and many people assume their chances of winning are better if they make an order. I doubt it. In most states it would violate gambling laws to require a purchase in order to win a prize. While it's certainly possible that a company might violate the law, in this case they don't need to! It doesn't matter to them if they give the sweepstakes money to somebody who ordered a product. What matters to them is that people THINK ordering a product will help their chances! Most people think so, and order the product. There's no reason for the company to actually cheat, as long as the customers think they're cheating!
A high pressure sales routine
Sometime in about 1975 we received a visit from a Kirby vacuum cleaner salesman who said he would shampoo our carpet free. It turned into a long, rather unpleasant, but educational, evening. This particular salesman was apparently new at the job and not very convincing, but he did employ an interesting repertoire of sales tactics. I recall him telling us that the engine pumped (something like) one hundred twenty-eight POINT TWO "cubic square feet" of air per second. Clearly he meant cubic feet. To an engineer like myself "cubic square feet" is a truly bizarre concept. It is also strange that he emphasized the "point two", the least important part of the number. Later he was telling us we could use the Kirby to get microbes out of our mattress. He told us that even waterproof rubber sheets couldn't keep microbes out since microbes were "much smaller than water molecules." That would come as a shock to biologists.
He wanted to show us that the brush mechanism in the Kirby was gentler than the one on our old vacuum, and he asked us for a pencil. The first one we found was a golf pencil, with a short stubby point. He rubbed it against the Kirby brush without ill effect and then was supposed to show us it would break on our old vacuum's brush. He had a really tough time jamming the point against the metal casing on the head of the attachment but finally managed to get it to break.
The other gimmicks were a little more likely to be convincing. He had us vacuum a small section of our carpet with our old vacuum. Then he inserted a clean piece of cloth in the Kirby in such a way that the air would be drawn through it. He vacuumed over the same area we had done and showed us the cloth had picked up dirt that our vacuum had missed. This seemed impressive at the time, but a little reflection suggests that vacuum cleaners only get a certain percentage of the dirt on each pass, so whether our vacuum or the Kirby originally went over the patch, there would still be dirt that would be picked up, and either vacuum would be capable of picking up more by continuing to go over the same spot.
The Kirby comes with a large number of attachments that enable it to function as things like a sander, floor polisher, shoeshine buffer, and maybe even a circular saw. We were asked to fill out a form indicating how much we thought each of these items would cost if we bought them in a store. There were probably ten to fifteen tools listed. Then we added up our estimates, and, sure enough, it came out a lot higher than what the Kirby cost. This sounds like a fair analysis, but really isn't. We wrote what it would cost. We didn't write what we would be willing to pay for it. Some of these were items we wouldn't have taken if they were free. If we did want one of these, we'd rather have one that was built for its own specific purpose rather than using an attachment to a vacuum cleaner. So the price comparison was meaningless. I also recall the salesmen (he had been joined by some coworkers) talking about a guarantee on the motor. If anything ever went wrong with the motor, we could send it back to the company and have it completely rebuilt for only $49.50 (this was in the early 1970's when this was a more substantial amount of money). I expect Kirby probably could totally replace the motor for that amount and still come out with a profit. With a deal like this, the more often it broke the more money they would make. This is my recollection of my Kirby experience in the 70's. We didn't buy one. We haven't invited them back, so I don't know how their current sales pitch compares to the one I experienced.
I have bought candy bars in vending machines that boldly proclaim "New Size" as if this were a wonderful thing. Was I supposed to assume that it was BIGGER than the old size? We are likely to think they wouldn't make a big fuss about a feature unless it was a GOOD feature. That's what they would like us to think. I have to expect that if the candy bar actually were bigger, they would be eager to say so.
What's the real price?
I got a new set of tires at a discount dealer a number of years ago. I had a car with small tires and bought the least expensive brand, and was pleased when I was told it was only about $16 a tire. Unfortunately it also cost $7 for balancing and $3 for valve stems. I'm just a little suspicious that the business deliberately under prices the tires and makes up for it on the details, since it's the tire that gets advertised, not the extras. Advertise $16, but charge $26 - deceptive but legal. We also notice that it's always the cheapest version of the product that gets advertised: "Prices start as low as $16." Not many people would be able to take advantage of that price.
Rental Car Insurance
Alamo rental cars usually advertised a very low price, but had a very high charge for insurance. I recall being able to get a car for $20 a day, but being asked to pay $10 a day for collision insurance, which, if I had taken it, would have been a 50% markup (This was in about 1985). This would amount to a yearly cost of $3650 for collision insurance, far in excess of what would be paid on the average for repairs, especially back then.
Rental Car Gasoline
Lately most rental car companies offer a "fuel purchase option" in which you purchase the full tank of gas in the car when you pick it up and then don't have any charge for dropping the car off with a low tank. The price quoted is very reasonable, sometimes cheaper than what it costs at the pump. The gimmick is that very few people drop off the car with a tank that's nearly empty. That means that the driver paid for a lot of gas that she never used. Although the gas that's left has already been paid for, the company charges the next customer for the full tank. My guess is that on the average, a business traveler, and possibly a vacation traveler as well, returns with the tank more than half full.
I find the use of rebates to be an annoying sales tactic. If a five dollar product has a two dollar rebate wouldn't it be better to just sell it for $3? Apparently not for the company that sells it. I expect they count on the fact that many people will take the rebate into account when comparing the price to similar products, but will later forget to send in the rebate or accidentally discard the sales receipt which is required to get the rebate. Even if we do send it in, it seems like we get to pay sales tax on the $5, not the $3. An additional gimmick I have seen is when a close look reveals you have to buy TWO or more of the product to get one rebate.