Marketers have always studied human psychology to sell more products. With technological advances, marketers can now even use brain scans to see what marketing tactics elicits a positive response. Here’s a comprehensive list of all these marketing tricks so you can either learn to avoid them, or use them in your own startup.
“Our jobs as marketers are to understand how the customer wants to buy and help them to do so.”Bryan Eisenberg, Co-Founder of BuyerLegend
Was $599, now $199! Or 70% off… on selected styles. This is an incredible pricing tactic to get customers in the door or feel like they’re getting a tremendous deal. The reality is that some retail stores inflate the original price to make the deal look better than it is.
Buy One Get One Free
Buy one, get one free … at same or lessor value. Customer is at most getting a 50% discount on the product, but when you’re not buying perishable goods that you would double up on like soap or household goods, it’s highly unlikely you will be able to find another product at the exact same price.
Take shoes for example, you might find lovely heels at $100, but the second pair you want are running shoes, which are valued at $75. So as a customer, you’re spending $100 for $175 of product, effectively only getting 45% off.
More for Less
For those like me who go to McDonald quite a bit, there use to be a supersize option where you pay a few cents more for a larger size. So I would think, that’s great value of getting so much more, for so little. This pricing strategy is mostly used in the food and beverage industry. The small sizes always costs the most per volume and it costs very little to upgrade to the larger sizes.
The incredible story here is that sometimes you actually don’t get more. As this article describes, “The Supersize costs $1.79, and the large costs $1.55 — a difference of 24 cents.Both contained the same amount of soda – 24 ounces. The only difference was in the amount of ice in each cup; the Supersize drink contained 35 ice cubes and the large only 17”.
This tactic is to market products at a loss in order to get customers in the door. Most grocery or big box retailers use this strategy. The idea is that when a customer makes an effort to visit the store, they don’t just leave the the one product. Most customers will spend time looking around and end up buying products at full price out of convenience.
Ever notice most prices end in .99, .97 or .95. The reason for this is to keep the price within an acceptable price range. For example, when a product is priced at $49.97, consumers see it as just above $40 rather than just below $50. Therefore, the consumer will be compared to other products in the $40 price range.
I first noticed this when I’ve bought a party size of chips. Open it and half the bag is full of air. Other examples is when some water bottles create more narrow designs so that it looks taller and larger than the competitors. This tactic can trick consumers that your product contains more, and therefore, better value than your competitors while offering the same amount at the price.
New and Improved
There is no legal requirement in order to call a product new and improved. The best example of this is the diamond shreddies case study. Shreddies, a brand of cereal owned by Kraft Foods were once known for their boring square shaped cereal. However, a digital agency re-branded the cereal as “diamond” shaped, the same product, just advertised at a new angle. The response was overly positive.
Gift cards are highly profitable for retailers. First, gift cards are typically not used immediately allowing for better cashflow. Second, the gift card are usually gifts in small denomination and might not cover the full cost of the product the end consumer wants. Lastly, gift cards are often lost or the balance is unused. For example, the consumer might have a $100 gift card, but only purchased a product for $97. Rather than keeping the gift card with a $3 balance, they forgo the balance and throw out the card.
Different Brand, Same Product
At times, the same company produces the same product, but market it at a different price point under two different brands. For example, telecommunication companies such as Rogers and Bell own companies such as Fido and Virgin who target a segment that’s more price conscious. Though the product is the same, the pricing is different.
Another example is with generic drugs. These drugs are exact copies of brand name drugs. This means same formula, same dosage, same risks and effects. Take Tylenol versus a No name brand. Scientifically, they are by the chemical term ibuprofen and exactly the same. But with marketing, you tend to trust Tylenol and other large pharmaceutical companies and end up paying more for the same product.
False Sense of Urgency
Limited supply! 50 units left! Sale ending in 24 hours. These are typical messages that create false sense of urgency. It’s a human condition where we have a fear of missing out (FOMO). Take Supreme as an example. It’s a clothing brand built on FOMO. Every product they release has a very limited supply. This “hype” causes prices to significantly inflate in the re-sell market and thus causing more demand. This cyclical product release cycle has built a huge community that line up for days before product releases to get the latest gear.
Content Disguised as Advertising
With the increase in influencer marketing, product placement is unavoidable. Companies are using social influencers on Instagram and Twitter to promote their products. Although the FTC regulates that social content that has been endorsed must be disclosed to the public by having a “sponsored by” in the captions, not all influencers follow the rule.
With 84% of people trusting online reviews as much as friends, it’s no brainer why so many companies are investing into influencer marketing.
Free Gifts with Purchase
Spend $100 and get a $50 free gift. This marketing tactic is to encourage consumers spend up to a certain amount in order to either get a free gift or be entered into a contest to win a huge prize. The real trick here is to have price the products to make it difficult to hit the $100 threshold. For example, if most of the popular items are priced at $60+, effectively the consumer will be need to spend $120+ to get rewarded with the offer.
We tend to trust the “professionals” and in order to become professionals ourselves, we are conditioned to think we need the same gear. Take Nike as an example. In 2018, Nike spends $1B+ on NBA sport sponsorship, so that Nike can have their logo on the jerseys. This funding does not include the player sponsorship to have the players wear Nike shoes.
There is also the white coat effect which advertisers uses actors to act as professionals. This includes doctors, lawyers and successful business owners.
This advertising tactic focuses on the negative effects of a particular issue, often used in propaganda campaigns. These advertising usually tackles a social issue that is currently or will cause harm to society. A great example of this is looking at a pack of cigarettes. By law, the packaging must show disturbing pictures of the lungs of cancer patients or the teeth of long term smokers. Other social issues include drinking and driving, drugs, and global warming.
Free trials have been the norm for most SaaS companies. It’s a marketing tactic to get you committed to a product for a low price. Because there’s no monetary cost to the trial, it tricks consumers to dedicated their time to learn and try your product. In reality, the time spent to learn and use the product becomes a sunk cost. As long the consumer likes the product, there’s a high chance they won’t spend more time researching or trying competitive products.
Emotional Connections (Anthropomorphism)
Anthropomorphism is when you attribute human traits into non-human entities. Lots of companies have fictional mascots. Examples of this includes the Michelin man, Tony the tiger, Kool-aid man and Mr. Peanut. It’s easier to connect to the consumer on an emotional level through mascots than communicating through a product. Advertising becomes a conversation rather than a feeling of being sold to.
IKEA Maze (Gruen Effect)
Ever shopped in an IKEA? The retail footprint is so large with multiple floors that you can easily get lost. This is called the “Gruen Effect” which is defined as the moment when consumers enter a shopping mall or store and, surrounded by an intentionally confusing layout, lose track of their original intentions, making consumers more susceptible to make impulse buys.
If you think you’re getting a deal on “out-of-season” products in the outlet stores, you might be falling into this trap. As CBC describes, “examined items in outlet stores and comparable products sold at the retail stores, and found that some were made with less durable leathers and different fabrics”. On top of that, many retailers are manufacturing specific lines of clothing for their outlet shops.
Larger Shopping Carts
The first time I went to Costco, I was welcomed with the surprisingly large parking spaces and wondered why… until I saw the shopping carts. They were massive, almost 1.5X the traditional shopping carts I have seen in a typical grocery store. The science behind bigger carts was outstanding.
According to Martin Lindstrom, doubling the size of the shopping cart leads shoppers to buy 40 percent more. This makes sense as smaller carts means consumers needs to make more conscious decisions on what to buy in order to leave room for their grocery list. With so much space, consumers often make more impulsive purchase decisions and higher sales for the retailer.