Tag Archive for: Christmas shopping

What the FOMO are You Doing?

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Last month I was in Arizona where I had the good fortune to combine business and pleasure. Pleasure was seeing family and attending an excellent Scotch tasting event at Total Wine. Business was a keynote presentation, sales calls with a good friend and coworker Dan and a trip to Flagstaff. One afternoon Dan and I stopped by Total Wine and during check out the person in front of us began telling us about a bourbon the store had just gotten in, Weller 12 year. He proceeded to tell us it was from the same distributor as Pappy Van Winkle, a rare and expensive bourbon. He let us know the store didn’t have many bottles and they’d probably sell out within the hour. Fear of missing out (FOMO) was enough for Dan to grab a bottle…even though he’s not much of a bourbon guy.

Dan’s decision to buy was heavily influenced by the principle of scarcity. This psychological concept alerts us to the reality that we value things more when we believe they’re rare or diminishing. FOMO is another way to describe scarcity. Most people hate missing out on what might be golden opportunities. If you think back on life most of what you regret probably centers around what you didn’t do (missed out on) rather than what you actually did.

Even though Dan isn’t much of a bourbon drinker, knowing Pappy Van Winkle has an excellent reputation and finding out this particular bottle would probably fly off the shelves was enough for him to make an unusual decision. Had that customer not mentioned how seldom the store got that specific bourbon and how fast it would sell I’m positive Dan wouldn’t have bought a bottle.

FOMO is constantly at work when it comes to sales.

  • Coupons that are about to expire get used more than those that still have time to use them. We may procrastinate but don’t want to miss out on that potentially great deal so we take action before opportunity passes!
  • The last day of a big sale gets us into the store even if we don’t have something in particular we’re looking for. You tell yourself you just want to see what deals are going on but once you’re in the store you’re far more likely to buy than if you don’t go at all.
  • Black Friday will be here before you know it and people will stand in line all night just so they don’t miss out on some of the best deals of the year.

Responding to FOMO isn’t all bad. After all, saving hundreds, or possibly thousands of dollars on something you’ve wanted for quite some time (new computer, flat screen television, a car) feels good and can be a prudent decision. Where you need to be careful is when you’re only responding to the deal but not necessarily a need. For example, many people are buying 4K televisions right now even though they don’t need them. Why? Because the prices have dropped recently and the deals seem too good to pass up. But remember, there will be another FOMO deal once the one you’re considering has passed.

Sure, not getting in on Apple or Amazon stock when they were first issued left a lot of people with regret. Perhaps that first love that got away gnaws at you because you think, “What if?” But keep in mind, as we enter the holiday shopping season the deals that will tempt you will be there during the after-Christmas sales, President’s Day sales and all the other traditional selling holidays. Make sure you’re responding not only to FOMO but what you really need and you’ll be a little happier in the long run.

Brian Ahearn, CMCT®, is the Chief Influence Officer at InfluencePEOPLE. His Lynda.com course, Persuasive Selling, has been viewed more than 100,000 times! Have you seen it yet? It will teach you how to ethically engage the psychology of persuasion throughout the sales process.

Don’t Live in “Scare City” this Christmas

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Yes, it’s mid October and I’m already writing about Christmas. Ho, Ho, Ho, the only surprise might be that I’ve not written about it sooner. I’m not sure what stores are like where you live but around Columbus, Ohio mega-malls are big business and very soon you’ll see Christmas on display. What this means in many cases are great deals to lure shoppers into the stores early. In the retail war the initial battle is to win your attention. “Battle” is not too strong a word because according to Dawn Hudson, Senior VP Marketing at Pepsi, “The average American receives more than 3,000 marketing messages a day!”
So how can a marketer help a retailer stand out from the crowd? A favorite tactic of marketers is to utilize the principle of scarcity to motivate you to get off the couch and visit the store. Scarcity is the term we use to describe the psychological response where people tend to place more value on things when they believe those things are rare or dwindling. If you’re wondering why this is used any more than other methods that’s because it works primarily on the subconscious level. In his book Influence Science and Practice Robert Cialdini describes our almost automatic response as a “click whir” phenomenon.
A while ago a friend at work who sat in on my influence training stopped by to give me an advertisement that caught his eye. He was aware of the influence approach Bed, Bath and Beyond took in this mailer his wife received.

The 20% coupon isn’t much different than most retailers. What was different with this one was the call to action: The Sooner You Use it the More it’s Worth! By using the coupon right away you save 20%, but if you wait it’s only worth 10% later. I think that approach is creative for a couple of reasons.

First, the ad incorporates the compare and contrast phenomenon. Most things only have value, or make sense in relation to other things. For example, if I offer you $20 you’re probably pretty happy. But, I’m willing to bet if I offer you $10, then change my mind and give you $20 instead, you’re much happier than having been offered $20 straight up. Why? Simple, now my offer is twice as much as you originally thought you were going to get. If you don’t believe me try it with a few people sometime and see how they react.

The second element of the ad that works well is how it incorporates scarcity. If you don’t use the mailer now it’s only worth half as much later. On the back of the mailer you would have seen the recipient had four full weeks to save 20% on one item, then four more weeks to save 10% on a single item. Something about that seems more motivating to me than a straight up use it or lose it approach.

Pay attention as the Christmas ad bombardment begins. Not only will you see scarcity applied, you’ll see consensus too. After all, if everyone is buying a certain gift you’re kids will probably want that same item too. But if you don’t hurry you might just miss that golden opportunity so get it soon for your kid’s sake! Seriously, there may be great deals and some items might truly be limited but with your eyes open to how retailers are trying to motivate you at least you can pause, think and make the best decision, instead of an impulsive one.
Brian, CMCT
influencepeople
Helping You Learn to Hear “Yes”.

Why Black Friday is One of the Biggest Shopping Days of the Year

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Is Black Friday the biggest shopping day of the year? Retailers and the media might lead you to believe so but that may not be the case, at least according to one Wall Street Journal blog. Whether it is or isn’t, Black Friday is one of the biggest shopping days and by the time you read this it will be just days away.
Yes, Friday November 27th, a.k.a “Black Friday,” will be the unofficial start of the Christmas season as throngs of people make their way to malls all around the country trying to get the best deals possible on holiday gifts.

It’s not too much of a stretch to say people will act like crazed fans at a football game or soccer match. It’s not uncommon to hear of people coming to blows over items, pushing each other out of the way to get to toys, trampling one another and in one very unfortunate case a man actually died as a result of the shopping frenzy. That’s right, last year a Wal-Mart employee was trampled to death as shoppers pushed their way into the store. So much for the season of giving and the spirit of joy!

What causes seemingly normal people will do some very abnormal things in hopes of getting the right gift or best deal? Why would someone stand in line for hours waiting for a store to open when they could visit that same store almost any day of the week? And why to people get up hours earlier than they normally would on their day off?

I contend the madness is because of scarcity, the psychological principle that tells us people value things more when they appear to be less available. This almost automatic response can be triggered by time constraints and competition for a limited number of items.

Black Friday taps into scarcity using the time constraint because it’s one day a year. Miss it and you might have missed the best deals of the season. But then again, you might not have missed out because sales only seem to better as Christmas approaches and retailers look to unload merchandise. Nonetheless, over the years the lure of Black Friday has increased immensely and retailers have taken advantage of the popularity of Black Friday by opening earlier and earlier each year. This year some stores will open at 12:00 AM, the moment the clock strikes midnight because Thanksgiving will be over and it will officially be Friday.

Competition isn’t limited to the playing field or court. No, when it comes to shopping competition is alive and well, fed into by retailers. Here’s how the competition part works – no longer is it good enough to just get to a store because if you are not there when the store opens they might run out of the thing you want. Limited availability is different than limited time so while you might have all day Friday to shop, certain items, those marked “While Supplies Last” or “Limited Availability,” might be gone by the time you arrive at 5 AM or 6 AM. Can’t let that happen now, can we?

It’s amazing how people respond because little Jimmy probably doesn’t remember that great toy you got him three years ago, the one you headed to the mall at 4 AM to buy. And sweet Sally probably can’t tell you which American Girl doll you got her when she was eight years old but it’s a good thing you stood in line for several hours to pay for it.

Here’s another eye opener. People will say, “But I saved $200!” Saving money is great but many of those same people would not drive across town to save $200 on a car because a $200 savings on a $20,000 car by comparison isn’t worth the extra time and effort. So
they spend four hours negotiating a car deal, could go across town and maybe spend another four hours to save $200, but they don’t. Sure, it’s an eight hour investment but many of those same people will spend more than 12 hours at the mall just to save $200. It doesn’t make much sense when you lay it out like that but then again, people are Predictably Irrational as Dan Ariely wrote about in his book by the same title. By the way, the real value of the car savings would be closer to $260 because of the interest over the life of a 5%, five-year loan.

So where am I going with all of this? I’m not going to tell you not to shop. For some people Black Friday shopping has become as much a holiday tradition as Thanksgiving, getting a Christmas tree and listening to holiday music. I’d only challenge you to consider if it’s really worth the hassle – the lost sleep, extra time as the mall, traffic, fighting for a parking space, the disappointment when someone bought the last item you wanted, etc. I could go on and on but you get the point. Just think for a moment, “Would I normally respond this way? Do I want to respond this way?” Then decide what you want to do next.

If you know you’re going to give into the madness then I’ll try to save you a little bit of time by giving you the Black Friday web site so you can get a sneak peak at some of the deals that will be out there. Before all the craziness starts I’ll end with this – I hope you have a very Happy Thanksgiving and a safe time no matter what you decide to do.

Brian
Helping You Learn to Hear “Yes!”