Tag Archive for: Influence Science and Practice

Reputation and the Recency Effect

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Last November I wrote a post called “Say it ain’t so, Joe” as the Jerry Sandusky case of sexually abusing young boys at Penn State University came to the attention of the American public. That horrible tragedy has made front page news again in the wake of the Freeh Report which stated there was a failure of leadership at Penn State University. The report also alleges legendary coach Joe Paterno (Joe Pa) knew about Jerry Sandusky’s behavior as far back as 1998.

This has led questions about what Joe Paterno’s legacy will be. Aside from having more wins than any other major college football coach in history, until the scandal broke, Joe Pa, as he was affectionately called by the faithful, was held up as example of a football coach who ran a clean program, helped boys become men, had real “student athletes,” and gave back to the community in countless ways during his 61 years at Penn State.
This post isn’t about convincing you one way or another how you should feel about Joe Paterno. Rather, it’s about understanding what impacts your thoughts about him as well as other people and situations you might find yourself reflecting on.
In psychology there’s something known as the “recency effect” which is also called “recency bias.” In a nutshell, we give more weight to information we recall most easily and quite often what we remember most is what we experienced last.
We see this all the time. In boxing it’s known as “stealing the round” when a boxer is getting beaten for the better part of the three-minute round but puts on a flurry of activity toward the end to win the round.
In the news we see it with different stories, like suddenly believing air travel is unsafe because of a few recent stories on airline disasters. Mad cow disease and the bird flu are another example. Both are extremely isolated events yet we tend to believe they happen far more than they actually do because of the coverage they get and how easily we recall the stories. In actuality, you have much more likelihood of death or injury from driving to work or other daily activities than you do from airplane accidents or the latest flu outbreak.
How about this – have you ever gone somewhere, had a really good time but the whole experience was marred by a bad ending? Maybe it was a great vacation that ended with flight delays or a round of golf that ended with a bad hole or two. If the flight delays were at the beginning of the trip most people would rate the trip higher than if they come at the end. And most golfers would prefer a round that starts poor and ends well rather than starts well and ends poor … even if the score for both rounds is identical.
The recency effect works both ways, good and bad. Take Tiger Woods, for example. While he lost millions in advertising revenue he appears to be accepted by the public every bit as much as he was before. At least that seems to be the case when you see golf fans responding to him when he’s in contention and winning tournaments.
On the flip side, whole careers are washed away when a great player makes a mistake. Just ask Bill Buckner or Jackie Smith. Buckner mishandled an easy ground ball in game 6 of the 1986 World Series against the New York Mets which allowed the Mets to win the game and eventually the series.  Smith dropped a pass in the end zone in Super Bowl XIII that could have possibly been the difference between winning and losing the game for the Dallas Cowboys.
Should potential Hall of Fame careers be weighed most heavily on how they end? Should someone’s misdeeds be relegated to the background just because they’re doing well in the moment? Should the good works of individuals be discarded because of scandal at the end?
The answers to those questions are for each of us to decide personally.  Collectively, our answers will determine how society remembers someone’s career or legacy. My goal is to help you see more clearly, and to recognize how your thinking is impacted by what you’ve recently experienced.  If you understand that you can review situations differently than you might currently. You might come up with the same conclusion but just like having more data to make decisions is usually good, so it is when it comes to understanding how your brain works with the recency effect.

Brian, CMCT
influencepeople 
Helping You Learn to Hear “Yes”.

5 Pointers to Become Listening STARS

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Over the last few years I’ve conducted quite a few workshops on different sales skills. The workshops are designed to get people to practice the various skills they learn in our online training environment. One of my workshops focuses on active listening skills. In this post I’ll share five pointers from that workshop to help you become listening “STARS.”

What I’ll share are not principles of influence but they impact influence because if you’re not a good listener then your best attempts at persuasion will probably fail. Listening is
important because it helps you learn about the other person, hone in on similarities, and build on the liking principle. Listening is also vital when it comes to the principle of consistency because only when you hear someone can you tap back into their words and ethically engage consistency.

Listening is an active skill so you need to do several things if you want to excel. Unlike some skills, listening skills are all things you can do. For example, I often tell workshop attendees I can’t dunk a basketball. Never could and it’s not likely at 48 years old, standing just 5’9 tall, that I ever will. It’s a skill I don’t possess and can’t acquire no matter how hard I work at it. If someone told me my career depended on dunking a basketball I’d start looking for a new career. But not so with listening skills! Each of the five pointers I’ll share is within your capabilities if you’ll
simply make the choice to employ them.

To be listening STARS, you need to remember Stop, Tone, Ask, Restate and Scribble. We’ll take a brief look at each of these.

Stop – First thing you need to do when communicating with another person is stop everything else you’re doing so you can give them your full attention. People who think they can multi-task are fooling themselves. Scientific studies show people who try to multi-task end up taking longer to do both tasks and are more prone to errors. My own personal experiment, which I’ll share at the end of this article, verifies this.
Tone – A person’s tone of voice is important for a couple of reasons. First, it indicates mood. You can usually tell by the tone of voice whether someone is happy, sad, angry, stressed, relaxed, etc. The other reason tone is important is because it gives more meaning to the communication. For example, the sentence, “I can’t believe you did that,” can mean many different things depending on the word or words the speaker emphasizes.
Ask – Make sure you ask good questions. This helps clarify the message the other person is trying to deliver. It’s also a great way for you to find out things you think are relevant to the discussion, even if the other person doesn’t think they’re important.
Restate – It’s not enough to think you know, or think you understand what the other person said; you need to verify you’re on the same page. Restating what you think you heard, and then putting the message in your own words is a quick, easy way to make sure you fully understand the message as it was intended.
Scribble – Take notes. Remember, note taking isn’t to write a novel, it’s to capture key points and key words to jar your memory as you recall the conversation. Too often I see people take the focus off of the speaker because they get so intent on writing as much as they can but in the end they miss a lot because this is a form of multi-tasking.
Let me share this about multi-tasking. During the listening workshops I read a short, one-page story to each class. As I read I have one-third of the class just sit back and listen, another one-third takes notes, and the rest of the people are distracted as they try to connect scrambled numbers from 1 to 72 while listening to the story. After I finish I give a 10 question quiz to everyone. Having done this with nearly 200 people what I found was those who took notes got about 60% more questions correct than the distracted group who were busy connecting numbers while trying to listen. Those who just sat back and actively listened got nearly 75% more questions right than the distracted group. Wow!
Two learning points come out of this exercise. First, as mentioned above, if you take notes, be brief so it doesn’t become a distraction. Second, and more importantly, stop whatever you’re
doing and give your full attention to the person speaking. That means put away your cell phone when you’re in a meeting or conference. You can say all you want that you can do both but you will miss more of the message because odds are, you’re probably not the statistical anomaly who breaks the mold.
So let me ask this – what would it do for you if you caught 60% to 70% more of a prospect or customer’s message than your competitors? I’d imagine it would do a lot for sales and service. To wrap things up, if you want to be master persuaders then make sure you’re listening STARS. Make the choice to follow the five simple steps I’ve outlined above and you’ll be on the path to becoming a much better listener.

Brian, CMCT
influencepeople 
Helping You Learn to Hear “Yes”.

Great Customer Service Isn’t Selling

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I stopped by Bath and Body Works not too long ago to pick up an impromptu gift for Jane. She was in New York with Abigail for the weekend and I noticed her body wash was almost gone. I thought it would be a nice surprise for her when she came home late Sunday night to see three bottles of body wash, each a different fragrance, awaiting her.

While I was at the store a nice young lady came to my aid. Like most men I tried to look like I knew what I was doing and like most ladies who work there, she could quickly spot a clueless male customer. If you’ve never been in the store there’s a dizzying array of choices (lotions, shampoo, body wash, etc.) and even more fragrances!
The lady was helpful, showing me I can take the cap off to smell the different scents. Like most males, I bought the first three I smelled. It’s much like sniffing wine; I’d never send it back but I have to do it to make it look like I know what I want.
I made my three choices, feeling like a bargain shopper because I got the “buy two, get one free” deal, even though the rational part of me knows nobody ever pays full price when shopping there. At the counter I thanked the lady for helping me and in response I heard her say, “No problem.”
She provided good customer service but blew the opportunity to sell it by squandering her chance after hearing “thanks.” So let me state this emphatically – providing good or great customer service is not selling! Unfortunately too many retail establishments and customer service reps think it is.
People expect products to work as advertised and they expect at least good customer service. Providing either becomes nothing more than an afterthought once the sale is made unless the rep sells it. So now you’re thinking; then what should they do? How about this:
“That’s part of the great service you can expect when you shop at Bath and Body Works. Thanks for coming in, I hope we see you again.”
Pretty simple, isn’t it? In fact, it’s so simple every employee can be taught to say it or some variation of it.
So what’s the benefit? It strengthens the connection between the great service and the company providing it. Done the right way and often enough, customers start consciously and subconsciously making the connection themselves. It makes returning to the store the next time a “no brainer” decision.
This taps into the principle of consistency. People want to be consistent in what they say, do and believe. If they believe your company has great products or gives great service they will continue to do business with you unless something else intervenes. And even if something else intervenes – like a lower price – your great service or product will give people reason to pause and think before simply reacting to price. But, if they don’t have reason to pause then why wouldn’t they go elsewhere if they can save a little money?
Brian Tracy, sales trainer and author of The Psychology of Selling wrote, “Selling is the process of persuading a person that your product or service is of greater value to him than the price you’re asking for it.” As a man I know very little about what women should pay for things like lotion and bath salts but I know someone helping me when I look helpless is adding the value that Brian Tracy refers to.
So here’s my advice; find a way to comfortably incorporate, “That’s part of the great [fill in the blank] you can expect when you deal with [fill in the blank].” Play with it, get comfortable with how it sounds, and make it your own. Doing so is a sure way to strengthen the connection in the mind of the customer and will lead to even more repeat business.
Brian, CMCT 
influencepeople 
Helping You Learn to Hear “Yes”.

The Power of Concessions

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In February I spoke to several dozen business coaches from the Central Ohio Chapter of the International Coach Federation. During my hour with the group at The Ohio State University I shared ways they could use specific  principles of influence to help their clients obtain better results.

Below is a short video clip where I talked about the power of concessions, sharing the results from a little experiment Dr. Robert Cialdini and his students conducted at Arizona State University. I think you’ll find it very interesting how they tripled the response rate to a certain request by prefacing their request with something beforehand.

If you’ve viewing this by email click here for the video.

Is your organization looking for a keynote speaker, training or consulting on the application of ethical influence and persuasion in the workplace? If you are just reach out to me by email at BFA654@gmail.com. 

Brian, CMCT 
influencepeople 
Helping You Learn to Hear “Yes”.

Manipulative Email Marketing? You Decide

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I received an email one Thursday a while back with “Monday’s ‘oops’” in the subject line. The opening of the email read as follows:

 

Dear Brian,
Monday we accidentally sent an email to you,
which was intended for our members.
Please accept my sincere apology for any
inconvenience this may have caused.
If you’d like to see the video referenced in the
announcement
please click here.
It’s actually a “commercial” of my daughter
telling the story of how she was struck in her car,
5 months pregnant, with her two-year-old son
in the back seat …
…
And how her insurance agent was there to
help her deal with the aftermath

I didn’t recall seeing any email from this company on Monday and wondered why the company would have sent emails like this to any non-members. I looked up the sender online and didn’t see that I was connected with him on LinkedIn, Facebook, Twitter or anywhere else. And by his own admission I wasn’t a member of his group.

Also, if it was indeed an accident then wouldn’t a short apology have been appropriate rather than a second attempt to get people to watch the commercial?

This smacks me as manipulation pure and simple. First, I think a simple apology would have been sufficient if it really was an accident. If it wasn’t an accident but rather a ploy to get people to watch the video then we can add dishonesty as one more reason to not watch.

The principle of scarcity tells us people want things more when they can’t have them or think they’re being taken away. When I share this principle with groups I like to cite a study that’s referred to in Influence Science and Practice. The study was conducted with law students at the University of Chicago where they acted as a mock jury for a test case. They were presented facts and asked to give a judgment for the defendant. In the control group the average award was $33,000. A second group was told the same fact and one more was added – the defendant had insurance. Knowing there was more ability to pay, the average award increased to $37,000. A third group was told about the insurance but then the judge said that was inadmissible and should be struck from the record. He instructed the jury to not consider the insurance when deciding on the award. For the third group the average award was $46,000, a 39% increase!

It might seem counterintuitive that mock jurors awarded the most when told not to consider the insurance but what we clearly see is the psychology of scarcity at work. As soon as we’re told we can’t have something we tend to want it even more. When they were told they should not consider the insurance they placed even greater weight on it.

And think about this; you can’t not think about something. In other words, if I tell you not to think about pink elephants you will think of a pink elephant, even if for just a moment. I can imagine jurors talking about the very thing they’re not supposed to consider which means somehow, some way, it will factor into the decision.

So back to the email I received. By telling people they received it by accident, that it was only supposed to go to members, the company was trying to invoke some scarcity. They were hoping people would think, “I wonder what members get to see that I don’t?” While most of you reading this might see right through the tactic I guarantee a large number of people who are unfamiliar with the influence process didn’t see it for what it was and out of sheer curiosity watched the video.

Not one to let things go I sent a short, simple reply to the sender, “If you were really sorry the apology line would have been enough rather than an attempt to get people to watch your video.” I never heard back from them.

Here’s my suggestion – when you sense people are using the psychology of persuasion in a manipulative way call them out on it. I could have gone on Twitter and done that in front of the world but I don’t think that’s right and that’s why I refrained from using the name of the person or the company. A private reply was enough and now I have more important things to move onto.

Brian, CMCT

influencepeople 
Helping You Learn to Hear “Yes”.

Keynote Speaking and Training

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“When Brian Ahearn speaks, people listen. That is so because he knows his material thoroughly, and he knows how to present it superbly. The upshot is that the genuine insights he provides are not just immediately understandable, they are also immediately actionable and profitable.” 
– Robert B. Cialdini, Ph.D., author of Influence Science and Practice 

Wouldn’t you agree; most of your professional success and personal happiness come about when people say “Yes” to your requests?
  • Prospects become clients when they say “Yes” to your proposals.
  • Ideas become projects when management says “Yes” to your presentations.
  • You get raises and promotions when the boss says “Yes” to your reasoning.
  • And peace reigns in the home when your spouse or kids say “Yes” to you.

All of these situations and many more can happen with much greater frequency when you understand how people think and respond. Once you understand that the next step is to ethically apply scientifically proven methods of persuasion to your communication. I can help you understand that science and its application to your professional and personal situations. In other words, I can help you learn to hear “Yes.”

For example, did you know using “because” can make you more persuasive? To find out how watch this short clip where I talk about the power of “because” in the communication process.


My company is called Influence PEOPLE because we don’t try to persuade things. PEOPLE stands for Powerful Everyday Opportunities to Persuade that are Lasting and Ethical. In this video I unpack the PEOPLE concept.


Does this really apply to you and the situations you routinely face? Here’s what small business owners had to say about that after a presentation I gave at The Ohio State University.

To view more presentation videos click here.
Are you looking for a keynote speaker, training, or consulting on how to apply scientifically proven principles of influence to sales, marketing, management or leadership?  If so, reach out to me by email, BFA654@gmail.com, or phone, 614.313.1663, and we’ll talk about your specific needs. 
Brian, CMCT 
influencepeople 
Helping You Learn to Hear “Yes”.

The Saddest Kodak Moment

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Many of you reading this might remember the Kodak commercials in the 1970s that introduced the world to the “Kodak moment.” This phrase referred to those times – happy, heartwarming, fun – you wanted to preserve forever on film. That ad campaign helped Eastman Kodak, founded in 1889, reign supreme in the photographic film industry with a 90% share by 1976! That dominance began to slide in late ‘90s with the advent of digital photos and culminated in the company declaring bankruptcy in January 2012.

When I read an article recently, Barriers to Change: The Real Reason Behind the Kodak Downfall, it brought me back to a conversation I had with Dennis Gilbert, owner of Appreciative Strategies, LLC. During our talk Dennis told me he found the fall of Kodak fascinating and wanted my take on it from an influence and persuasion perspective.
According to John Kotter, author of the article noted above, “The Kodak problem, on the surface, is that it did not move into the digital world well enough and fast enough. Recent articles dig a bit more and find that there were people who saw the problem coming — people buried in the organization — but the firm did not act when it should have, which is decades ago.”
What really caught my eye was, “there were people who saw the problem coming — people buried in the organization — but the firm did not act when it should have.” Some people in Kodak knew what to do but couldn’t persuade the ultimate decision makers to make the necessary changes.

 

In hindsight, do you think Kodak would have made the necessary changes two or three decades ago if they had a mulligan? Of course they would have. I won’t claim to have any clue on what Kodak should have done, when they should have done it, or how they should have implemented those changes. What I do know is the lack of persuasion skills by those who had a pulse on the market has cost this once great company dearly. And let’s not forget, Kodak’s fall isn’t just about shareholder value, it’s about the people who’ve poured their heart and soul into the company who might be facing major life changes as the company restructures. Jobs may be lost, benefits will probably be restricted and pensions could be impacted to name just a few things that could create hardship for tens of thousands of current and former employees.

Is persuasion an important skill? You bet it is! There’s no substitute for expertise in your chosen field but expertise isn’t enough. Knowing the most about stocks does you little good of you can’t persuade people when to buy and sell. Likewise, a manager knowing her company and the industry inside and out isn’t enough if she can’t persuade her team to take the necessary actions that will lead to success.

I’m sure the mid-level managers at Kodak knew the business, competition and could clearly see the trends. However, despite their skills they were unable to convince people up the corporate ladder to start making the necessary changes. I don’t know what they did or did not do but knowing they were probably dealing with a lot of pragmatic and analytical personality types I’d have suggested some variation of the following: Tapping into scarcity – here’s what we stand to lose if we don’t act now – might have helped. Maybe tying the needed changes back to Kodak’s mission statement – consistency – might have done the trick. Perhaps sharing more stats – authority – with attention grabbing methods would have arrested senior management’s attention.
Convincing someone to change is never easy but we cannot put the blame on others anymore than a teacher can blame students for not learning. I’m a sales trainer and when someone asks me for sales advice the number one thing I tell them is this: no matter what the outcome, take full responsibility for it. If you made the sale, figure out what you did right then keep doing it and refining it. Likewise, if you didn’t make the sale ask yourself why then set out to learn from your mistakes and figure out ways to overcome them in the future.
The further removed management is from the customer the more difficult it is to make good decisions unless they have excellent communication with the field people. Sun Tzu said as much in his classic, The Art of War, when he warned readers to beware of high-level dumb saying, “Those who are not at the scene of action and do not know what is going on should not give orders.”
Sun Tzu also told the world, “Those who know where and when the battle will be fought can marshal all of their resources to the right place.” Some Kodak employees knew when and where the battle was to be fought but senior managers acted too late. Now it remains to be seen how many Kodak moments are left.
Here’s my advice for you – continue to become an expert in your field because that gives you the credibility you need to have a platform that people will listen too. But don’t stop there! Make sure you learn the science of influence so your great ideas turn into projects or your great presentations turn into sales. That will ensure your professional success.If you’re viewing this by email and want to leave a comment click here.

 

Brian, CMCT
influencepeople 
Helping You Learn to Hear “Yes”.

A Positive Mental Attitude is an Essential Persuasion Tool

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If you follow me on Facebook then you know I broke my right ankle back in March when I stepped on my wife’s boot heel the morning after our 24th anniversary celebration. When this all happened I passed out so Jane called an ambulance and I was subjected to 12 hours of tests and waiting (more waiting than tests) in the emergency room. I was there so long because doctors were concerned with my unusually low heart rate coupled with the passing out incident. I could go on and on but you get the picture; not exactly a great way to start the 25th year of marriage. Did I mention I was in a walking boot for six weeks?

On the surface that sounds like a bummer and I won’t lie, I wish it hadn’t happened. If not for the broken ankle I could have done two activities I enjoy dearly – driving my car and running. I also wouldn’t have inconvenienced some people because I needed rides to and from work. And let’s not forget all the money I would have saved.
Having taught classes on maintaining a positive mental attitude – and knowing I was going to have to teach that very same class in the walking boot – I had to practice what I preach. So how does one find the positive in all this?
Let’s start with my trip to the emergency room. When a resident asked what happened, I told her, “I did something different this morning. Normally I leave the lights off so I don’t wake up my wife but since she was already awake I turned on the light. I think I passed out when I saw her beauty so early in the morning.” She chuckled and Jane just rolled her eyes.
I didn’t get upset when a nurse mistakenly told us I was scheduled to have a pacemaker put in at noon. Jane on the other hand started to freak out thinking I was going to meet God before she did.
Knowing there would be some hefty hospital bills, Jane was feeling bad that this all started with her boot. My attitude – we can’t change it, we don’t know what we’ll be charged so why worry about it? There’s never any sense in worrying about things you have no control over so why let them get you down?

I’ve tried to have fun with it as I tell the story. People expect to hear something manly like breaking it while running or at taekwondo. Nope, nothing manly about stepping on your wife’s boot heel at four in the morning. But I usually have them laughing when I end the story with this line, “Better that she broke my ankle than my heart.”
The rides to work were fun because Cobi Dorn and Terra Boroff are such nice people and they both have a great sense of humor. They had to in order to put up with me, my ego and all the bad jokes I tell. Being the astute observer of human behavior that I am, I think they enjoyed having me  around … at least in small doses.
My spring break trip to Chicago with Abigail was more memorable in the walking boot and airport security wasn’t as big a hassle as you might think.
Perhaps my favorite pastime during all of this was watching Jane cut the grass while I drank beer sitting on the deck with my feet up. In fact, it was such a good time I made sure to preserve it with some photos and Facebook updates. Jane’s guilt has passed and she reminds during those times that she can also break my other ankle.
And one more thing – and this almost makes it all worth it – was a dinner with insurance agents that Jane came to because I needed a ride home. For those of you who have been married for any length of time you might be able to relate. When she picked me up for dinner she looked like a million bucks in a slinky black dress! It was one of those times you stare at your spouse, and even after all those years, feel the same way you did when you first met them. It was a good night!
So why am I sharing all of this in a blog on influence? The principle of liking tells us we like people who like us. There’s nothing worse than being around someone who is cranky and negative most or all of the time. A lot of people would have responded that way causing others to avoid them. I chose a different path and I hope people found it funny and entertaining. I think it make me more likable and people enjoyed being around me.
Each of you has a choice to make when seemingly bad things come your way. You can choose to look for the good or find ways to manufacture some good. If you do so you’ll probably be a little happier for it and those who are around you will benefit as well. And in the midst of it all, if you need a favor, help or have to make some other request, the odds that you’ll hear “Yes” will be dramatically better than if you do nothing but complain.

If you’re viewing this by email and want to listen to the audio version click here. If you want to leave a comment click here. 

Brian, CMCT 
influencepeople 
Helping You Learn to Hear
“Yes”.

Ethical Influence for Business Coaches

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A few months ago I had the privilege of addressing several dozen business coaches from the Central Ohio Chapter of the International Coach Federation at The Ohio State University. My hour-long presentation focused on how they could use certain principles of influence to help their clients obtain better business results.

I opened the presentation sharing about PEOPLE – those Powerful Everyday Opportunities to Persuade that are Lasting and Ethical. I also spent time on three of Dr. Cialdini’s six principles of influence  –  reciprocity, authority and consistency  –  defining each principle then citing scientific research to help attendees understand just how powerful the principles can be in the communication process. I also shared real world application for each principle to help those in attendance envision how they might use each in their daily attempts to ethically persuade others.
Below is the video clip where I introduced my PEOPLE concept – those Powerful Everyday Opportunities to Persuade that are Lasting and Ethical.  

If you’re viewing this by email click here to watch the video on YouTube.



In the coming months I’ll share other clips from the presentation to help you better understand how the power of persuasion can help you hear “Yes” more often.


Is your organization looking for a keynote speaker or training on ethical influence and persuasion? If so, reach out to me by email at BFA654@gmail.com. 

Brian, CMCT 
influencepeople 
Helping You Learn to Hear “Yes”.

Will J.C. Penney’s New Business Strategy Positively Influence Sales?

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Have you heard J.C. Penney is going to radically change its business strategy? The giant retailer is getting rid of its traditional sales in favor of low prices all the time, slashing many items by 40% or more! In addition, they’re going to do away with confusing pricing for a simpler approach. No more $14.99 items, they’ll be $15, and those $19.99 items you love will be a nice round $20 or $19. Yahoo Finance ran an article, J.C. Penney gets Rid of Hundreds of Sales, which gives more details on Penney’s new strategy and some of the reasoning behind it.

On the surface you might think this is great for the consumer but don’t forget, Penney’s isn’t doing this for customers, they’re doing it to help the bottom line. The company believes sales and profits will be stimulated by the new strategy of lower prices and simplified pricing. To help with the implementation, the company has brought in some heavy weights in the retail industry from Target and Apple. This is obviously no ill-conceived idea but I want to look at whether or not it will positively influence sales.

Let’s start with doing away with the “the sale.” The sale is as all-American as baseball, apple pie, and motherhood! People love a big sale because it makes them believe they’re getting a great deal and that makes the buying decision easier for the consumer.  When you buy something on sale, part of the purchase decision is triggered by the contrast phenomenon. While $26 might sound reasonable for a certain item, it looks really good when compared to the normal $45 price, and you know saving $19, more than 40%, is a great bargain.

The downside is Penney’s is losing the bang for the buck, so to speak, because there will be no higher price to compare to and thus create the desire to take advantage of the deal. Considering nearly three quarters of Penney’s sales revenue came during promotions last year where prices were slashed by 50% or more, you begin to see how much they could lose if this strategy backfires.

And what’s up with that pricing? Charging $39.99 for an item doesn’t fool anyone because we know it’s practically $40. Selling an item for $14.99 can’t possibly induce more sales than a $15 price can it? It sure can!

In William Poundstone’s Priceless: The Myth of Fair Value (and How to Take Advantage of It) he cites a study in which sales were tracked for an item which sold for three different prices: $34, $39, and $44. Unit sales were highest for the $39 price as was the total revenue. When the item was priced at $39 total revenue was 9.5% higher when compared sales coming from the $44 price. When the $39 revenue was compared to the $34 price, total sales revenue was a whopping 50.6% more than when the item was sold for less! There are different theories as to why sales tend to be higher for items ending in $9 or $.99, but one thing is undeniable – it works. If it didn’t work retailers would have abandoned the strategy a long time ago.

As noted earlier, with former Target and Apple executives this change looks like it makes total sense on the surface and the new strategy might work. But let me bring to mind something many of you probably remember, New Coke. The new flavor for the world’s best-selling soft drink was a well-planned, thoroughly tested idea. Because New Coke was preferred by a margin of 2 to 1 in blind taste tests over regular Coke, it was thought to be a sure thing when it hit the shelves.  After all, what could be better than improving the best-selling product in the world? And yet it was an abject failure, considered one of the 100 worst marketing ideas of the 20th century. And you know the rest of the story as New Coke gave way to Classic Coke, the old standby!

J.C. Penney’s new strategy may not have the same kind of response as Coke, but my gut tells me after the initial PR wears off, Penney’s will be no better off and perhaps worse off because it will have abandoned some of the psychology that goes into the buying decision for many consumers.