This is chapter 4 of Breaking The Marketer’s Code, a series where we discuss the tools that marketers utilize to make consumers spend more than what they need to. In this chapter, I will share a list of marketing tactics corporations or salespeople make use of to trigger you to increase spending.
This chapter will be focused on more general marketing tactics as I will cover social media and eCommerce tricks in subsequent chapters.
If you have not read the first chapter on the basics of digital marketing, you can read it here.
What Are Marketing Tactics?
Marketing tactics or sales tactics are strategic actions that help the promotion of a product, service or brand (PSB) to influence consumer behaviour and achieve specific goals. They can be made up of a combination of various actions over a period of time to achieve the maximum effect to achieve their goals. To achieve their goals, they make use of how humans react to certain stimuli.
As long as the marketing tactics are not manipulative, I think it is fine. What I am trying to achieve here is to let people know about what marketing tactics are used and make informed decisions on their terms.
What Kind Of Goals Are There?
Goals are measurable targets that are set out during the planning phase.
It is a numbers game where the more people know about the PSB, the higher the chance of converting them into a sale.
Here is a list of goals that a salesperson or corporation might have
- Views on the PSB being promoted
- Contact/Email list
- Engagement on their business page/post
The Psychology Behind Marketing Tactics
The marketing tactics can be used to influence customer behaviour by
- appealing to feelings like happiness, greed, fear and laziness,
- showing social proof and authority
- removing the need to think rationally
There are only a few hyperrational consumers that can consistently make use of logic and reason over emotion when making a purchase decision. In most cases, the consumer buys impulsively and intuitively sometimes based on marketing tactics. Even the most rational consumers make impulse purchases.
In Daniel Kahneman’s book, Thinking, Fast and Slow, it is theorized that we have limited brainpower and we tend to act based on intuition and past experiences to can avoid the energy-consuming act of thinking. I do recommend this book if you have time, it is available to borrow for free via NLB.
Our mind is split into two systems of thinking, System 1 and System 2. We tend to think that we are always using System 2 to make rational decisions but most of the time we use System 1 if we can get away with it.
Marketing tactics make us make decisions under System 1, leaving the rational System 2 dormant.
Here is a table comparing the differences between System 1 and System 2.
|System 1||System 2|
|Simple everyday decisions||Complex non-everyday decisions|
|Requires zero to little brain capacity||Consumes more brainpower|
|Prone to errors||Reliable|
Marketing Tactics Used To Influence Customer Behaviour
Here is a list of marketing tactics that salespeople and corporations use to influence customer behaviour.
Building Social Proof
Building social proof is giving information to people who are unsure to let them make a decision.
Why do those investment gurus like to show themselves giving a talk to a huge group of people and taking photos with their students showing thumbs up?
Salespeople like to use this marketing tactic to make themselves look more successful than they are.
By building social proof, they can make people trust them and think that what they say is credible.
This article from an insurance marketing company highlights 29 marketing tactics to sell more. Stories and numbers can be exaggerated to make them sound more convincing and successful.
They encourage always claiming success, exaggerating numbers and appearing busy when they are not.
By appearing successful, it creates the illusion that they must be very good at doing their job or else they won’t be able to afford their condos, sports car and exotic holidays. Once you determine that they are successful, you will take their advice as the truth.
This is especially prominent in insurance, real estate agents and people at the top of MLMs.
When the salesperson shares stories of happy customers, you will think that you will be able to get a similar experience from the salesperson.
When everyone else is doing it, do you have to do it? Are you really “successful” if you have an excessive number of wedding tables, freehold condos or owning that car that will lose value once it hits the road? Salespeople can nudge a buyer over the edge into making that purchase or upgrade when they mention that many of their customers have already signed on the dotted line. If you are not sure of what you want, you can be influenced into making that transaction if you think that everyone else is doing it and why shouldn’t you.
Name dropping is the act of mentioning well-known brands or people that you have partnered with or know to give the impression that you are successful. Name-droppers hope to bring up their status by mentioning their connection to someone or company already at a higher social class.
In terms of closing sales, it gives the name-dropper immediate credibility that can help in closing deals. It’s like providing a reference that you have worked with well-known people or organizations and this builds trust before their PSB sales pitch.
When someone says that their start-up graduated from Y combinator or they come from Harvard, you might subconsciously give their words more weight.
Celebrity Endorsement And Collaboration
Celebrity endorsement and collaboration is a very strong marketing tool that builds trust and boosts brand awareness and sales directly. Working with celebrities is usually associated with large companies due to its high cost. If you are able to afford the high costs of working with celebrities and the celebrity is willing to endorse your product, trust can be built between the consumer and the company. The celebrity is placing their reputation on the line as if anything that does not go well with your PBS directly affects them.
Celebrity endorsement and collaboration works because of the trust-building factor for the PSB and the number of fans/traffic these celebrities bring with them.
Even when your brand is already well-known to the public, celebrity collaboration can still bring a big boost in sales to the company.
A very good example is the recent collaboration between McDonald’s and BTS.
Butter melting…like POP!💥
— HYBE MERCH (@HYBE_MERCH) June 16, 2021
Source: HYBE MERCH
I believe McDonald’s does not need more brand awareness. By collaborating with BTS, they not only increase the sales via the BTS meals but also have a new revenue stream via branded merchandise.
Their fans will support the brand as they trust the celebrity and also want to support the collaboration as they know it will directly benefit their idol. When the collaboration and endorsement achieve good results, it can bring in more collaborations for the celebrity in the future.
They would also want to collect and own any branded merchandise relating to their idols.
There are too many choices that we have to make in our everyday life and if we have to compare every product and their alternatives to make a purchase decision, we will face something called analysis paralysis. In this article, they cover many different pricing strategies that can help boost sales.
For example, when you place a S$1,000 television next to a S$10,000 television, the S$1,000 television seems like a really great value. If the S$1,000 television was standing alone, the price would look less attractive. This also works the other way for consumers that want premium products where they will choose the more expensive product.
One example would be printers. They attract you using low prices at first but if you didn’t account for the ink refill prices, you will be in trouble. In The Undercover Economist by Tim Harford, IBM spent money to slow down one of their printers on purpose to have almost the exact same printers at two different price points. The slower printer is actually more expensive to produce with an additional chip to lower the performance. This increased their sales by appealing to a larger group of consumers and removing analysis paralysis. Purposely slowing down the cheaper printer also makes the premium printer more attractive.
Instalments allow us to enjoy the full product just by paying for the first payment. For the same amount of money, we will also be able to purchase multiple items at the same time.
For example, you are looking to buy 10 items that cost S$1,000 each, payable in 10 instalments.
You can either
- Buy 1 item at full price every month
- Only enjoy the benefits of all 10 items at the end of 10 months
- Buy 10 items using instalments
- Enjoy the benefits of all 10 items at the start of the first month
Both examples have the same monthly cost and total cost.
Instalments give the shopper instant gratification at a lower cost, encouraging consumerism while greatly boosting retail revenue.
It is no wonder banks start providing 0% instalment plans and the rise of buy-now-pay-later companies. Providers make money from the merchants via credit card processing fees when you spend while buy-now-pay-later services also have a similar model where they charge the merchant instead. This cost will eventually be passed onto the customers.
It’s all good if there is no interest charged or you only buy things that you were going to buy anyway. However, when you have multiple items on instalments, it is hard to keep track of cash flow and the monthly payments can quickly snowball out of control. You will also be more prone to spending more than you would without instalments. High late fees will also hit like a truck if you cannot fulfil the payment obligations.
If the product is spoilt or unavailable, you will still have to continue to finance your purchases. In 2016, many people were stuck paying multi-year memberships from the defunct California Fitness. On top of that, you are unable to cancel your credit card if you still have an instalment plan on it.
Quick Wins For The Lazy
Ads promising quick and easy results gives the impression of quick wins to get the potential customers hooked. Humans are lazy and we usually look for the shortest and easiest way to do things.
Can you really make thousands of dollars at home in just 15 minutes a day? Or lose weight by just following the 5 easy steps?
Reality is cruel and is not as simple as the ads want you to think. For the uninitiated, such ads will attract eyeballs for those looking for a quick win. Once they get you to visit their website or attend their seminar, they have succeeded in getting you through the door to start pedalling their wares to you.
Even if what is promised is somewhat true, there are so many resources online for free that you should exhaust before going for a paid course. Results are seen after consistent hard work and practise so if you think you can get a lot done with minimal effort, you are in for a bad time. You will not achieve that six-pack or financial success just after attending that course or buying that product. Fitness and financial learning is an ever-ongoing process that will require consistent efforts over long periods.
You might be tempted to spend a bit more or even buy something you do not need to qualify for the giveaway. The giveaway should be treated as a bonus and not as the main reason to purchase the things. For lucky draws, the odds of winning the big prizes are really low. For those that you need to clock up to a certain value of products to get a free gift, the amount you need to buy is usually absurdly high for the value of the free gift. Also, the value of the free gift is usually exaggerated and not worth as much as they say it is. What they usually do is to state the recommended retail price as the value but they are usually sold at a price lower than that everywhere.
You need to ask yourself if you can really finish S$168 worth of coffee, cereal and milo before they even expire and will you even buy and drink these products without the giveaway. If you have a big family and already consume these products, then this giveaway is great for you.
Some salespeople are professionals at stoking emotions to make you close the deal. When we are blinded by our emotions at hand, we tend not to think rationally and decide with our hearts instead of our brains.
Emotional copywriting spurs people into action like a powerful emotional response. This is why clickbait is so effective; people read something, experience a strong emotional reaction, and then click through to find out more.
InvestmentMoats covered the crash of the privatized China Online Education Industry and here are some of the marketing messages these privatized education companies use to prey on parents and students
Does your shopping cart include your child’s future?
If you don’t come to tuition, we will just be cultivating your child’s competitors!
If you don’t work hard in tuition today, you will have to work harder tomorrow when you have to find a job!
All parents want the best for their kids so they will be pressured to get the best for their kids. They will buy the best milk powder and sign up for the best tuition for their kids.
According to this article in mandrin, parents can receive up to 100 calls a month from these private education companies. The real experience is a complete disconnect from what is shown in their advertisements. One parent who spent thousands of dollars (tens of thousands in CNY) feels that these classes are a waste of money as the lessons taught are full of mistakes and they disregard any reactions from the students.
Knowing what your target audience wants and answering their questions is great copywriting. But what if companies come up with copywriting that is misleading?
Did you know that all plant-based products do not contain cholesterol? So why do plant-based oils advertise this fact like it’s special to their product? First, they know that it will attract consumers looking for “healthy” products but the myth of dietary cholesterol has been mostly dismissed. Next, this same group of consumers do not know that all plant-based products do not have any cholesterol in them so the companies need to emphasize the fact to them.
There is a whole list of videos on LinusTechTips that highlights questionable marketing copywriting by manufacturers.
With the gaming market already eclipsing the movie and music industry combined and forecasted to hit over US$250 billion by 2025, many companies want a piece of the pie by advertising to gamers. We started with gaming mice and desktops and now we have gaming SD cards, gaming browsers and even gaming shoes.
We should also look at the terms and conditions behind any discounts or sales as much as we can. The deal might look really attractive at first but after you look at the T&Cs, there can be many trap cards e.g limited quantity, capped at a certain value, only after spending after $XXX, historical gains do not imply future performance.
Extreme Examples And Anchoring
The use of extreme examples skews your perception of how much a product or service can benefit you. An example would be insurance agents telling you the losses of a worst-case scenario and how much the policy can help you cover that huge expense. What they don’t highlight is that the average person will not be hit with that crazy hospital bill.
You should also know that the projected returns examples on investment policies as just there for visualization. When the example only shows 4% and 8% returns, it is easy to think that the bad case is 4% and the good case is 8% if you do not have any experience in investing. If you anchor your potential returns bases on the projected returns to decide whether to invest, you will be in for a bad time. What if I told you that the bad case is losing money on your investments? A professional agent should state potential losses in their sales pitch.
It is ok to name extreme examples (huge hospital bills, 15% investment returns) but they should also cover base cases and also the other extreme where policies aren’t claimed or investment returns aren’t met. This probably will not happen as it will directly affect their sales so we will need to be aware of the use of extreme examples and take this into consideration when making our decisions.
They want you to feel special, that you are chosen out of the many to be able to spend your money on them.
Not everyone can buy a Ferrari, even if you have the money. They want to make it an exclusive club as part of their branding. Agreeing to undergo a rigorous background check and not selling it whenever you want is some of the many crazy rules behind owning a Ferrari.
To be able to be included in a special community that is not available to everyone gives the individual a sense of being in a higher SES than others.
Fear Of Missing Out
Countdown timers, flash sales and limited quantities are used to make you spend more without going through a rational thought process. The emotions from experiencing FOMO marketing might push us over the threshold to add-to-cart. 60% of millennials make impulsive purchases after experiencing FOMO.
Loss aversion suggests that pain from losses affects us twice as much as pleasure from gains. As a form of loss aversion, FOMO triggers a person’s fear of “losing out”, which encourages us to take action like impulse purchasing.
Due to FOMO, we pick up things if we are not sure that they will always be available; or if we think that we will be missing out on a good deal. In the end, we might not even need that thing in the first place.
Companies can also create artificial scarcity to make people FOMO. Artificial scarcity shifts our focus from rational analysis (Can I afford that? Do I need that?) to the feeling of loss if we are unable to get the item (There are only 200 units available, I can’t miss this exclusive deal). Once we skip rational thought (system 2), we will rely on emotions and intuition (system 1).
The principle of reciprocity describes the tendency of human nature to want to offer back something when they receive something. Reciprocity will make you feel obliged to return the favour to do something for them.
Real estate and insurance agents like to give their clients, especially high-valued ones, gifts and cards during festivals as this can trigger reciprocity. Every time they contact you is a reminder that they exist and they can be there to service you when you need them. They also hope that you can remember them when you need their services. Even if you don’t buy from them, you will also be keener to introduce them to your friends via reciprocity.
In another example, by providing a lead magnet like a free ebook or other digital content, you will be more willing to provide your contact details as you will feel that it is a fair exchange.
Ads are everywhere and we are so desensitized that we usually tune out ads and this lowers the ad’s effectiveness. Most of us also raise our guard when we know that it is an ad trying to sell us things.
In comes guerilla marketing where unconventional ads appear in places that you least expect. They are usually very creative and gains your attention quickly.
You can see Huawei giving out free portable chargers during an Apple iPhone launch which not generated quite a lot of buzz but also results.
- $0 Invested in media
- $14.1k total investment
- 41 countries reached
- 5.26 billion media impressions
- 341k social media shares
- 11.9 million views
- US$395 Million in free advertising
People are also more willing to share interesting things even if they know it is an ad.
Are All Marketing Tactics Bad?
I feel that if they are not manipulative and used truthfully, using marketing tactics are generally ok. We do not have perfect information and even if we do, it will be exhausting to evaluate all pieces of information during every decision.
Marketing can help us make decisions when we are unsure about the product or the salesperson. If the product or service can solve our problems, providing us with more information can help us make purchase decisions.
Combating Marketing Tactics
Here are some ways we can try to combat marketing tactics and not fall victim to them
Don’t Lower Your Guard
Do not lower your guard and know that salespeople and companies do not do things for no reason. The marketing tactics are used to promote their product, service Or brand, influencing you to take action.
Make Your Decisions Using System 2, Not System 1
Take a step back and think rationally about whether your decisions make sense and not make impulse decisions based on emotions like fear and greed.
You should always buy things on your terms and not succumb to marketing tactics to make you spend.
As ASSI said it best, don’t ask a barber if you need a haircut.
Salespeople and corporations make use of marketing tactics to influence the decision-making process to reach their goals like sales and engagement. Marketing messaging that is truthful and non-manipulative provides value by highlighting product benefits, assisting us in making decisions. Make sure you make decisions on your own terms by taking a step back. Thinking rationally and not impulsively based on the marketing messages that influence our emotions.
Start from Chapter 1 on the Power of Digital Marketing here.