Rainmaking Secrets

In Under the Radar: Talking to today’s cynical consumer, authors Jonathon Bond and Richard Kirshenbaum argue:

Persuasive marketing should be invisible, with the consumer feeling the benefit rather than having to uncomfortably digest its overt mesage… The real threat [to the advertiser] is the consumers’ mntal machine guns, their very own personal defense departments that can shoot down messages at any given point.

And there are only a handful of techniques that are sophisticated enough to act as stealth bombers, dropping new messages behind the wall - escaping detection by consumers’ ever present radar!

I disagree. The smart marketeers I work with are using information from neuro-scientists, psychologists and brain imaging to regain the advantage they have traditionally held in the battle for customers.

The insights into how and why customers buy is revolutionising the way companies shape and deliver their messages.

The research is showing that much of what we believe about why people buy is wrong.

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Researchers at Caltech and Stanford University recently organized a wine tasting experiment.

Twenty people tasted five cabernet sauvignons that were separated solely by their retail prices, with bottles ranging in cost from five dollars to $90. Although the samplers were told that all five wines were different, the scientists lied: there were only three different wines.

This meant that the same wines often reappeared, but they had different price labels. For example, the first wine offered during the tasting. It was a bottle of a cheap California cabernet - was labeled as a five-dollar wine (its actual retail price) and as a $45-dollar wine, a 900% markup.

The subjects reported that the more expensive wines tasted better. They preferred the $90 bottle to the $10 bottle and believed the $45 cabernet was far better than the five-dollar rubbish.

Of course, the wine preferences of the subjects were clearly nonsensical. Instead of acting like rational agents - getting the most utility for the lowest possible price - they were choosing the spend more money for an identical product. When the scientists repeated the experiment with members of the Stanford University wine club, they got the same results. In a blind tasting, these so called experts were also misled by the made-up price tags. Isn’t it remarkable how powerful our expectations are?

These experiments and a number of other remarkable experiments on how customers make decisions comes from a remarkable book by Jonah Lehr, The Decisive Moment. If you want to know when we go for instinct and when we go for analysis, read this fascinating book. In the meantime, remember that when you price, managing perception is critical.

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“If you have an important point to make, don’t try to be subtle or clever. Use a pile driver. Hit the point once. Then come back and hit it again. Then hit a third time - a tremendous whack.”

- Winston Churchill

In her book, POP!, Stand Out in Any Crowd, author Sam Horn tells us that one of the most dramatic examples of a crafted soundbite was one used by the late Johnny Cochran, one of the defense lawyers for O.J. Simpson.

Can you remember the trial?

It went on for months. The jury heard testimony from dozens of experts and witnesses. But the dramatic moment came when O.J. Simpson was asked to try on a glove arguably worn by Nicole Simpson’s murderer.

Many people believe O.J. Simpson exaggerated the difficulty of putting on the glove, but Johnny Cochran amplified the doubt over O.J. Simpson’s guilt with this pile driving soundbite.

“If it doesn’t fit, you must acquit.”

Many legal analysts believe that this - Cochran’s summation encapsulated by this one soundbite - won the case. The phrase was doubly impactful because it recalled a visual demonstration.

The best PowerPoint presenters conclude with a pithy statement that recalls an earlier slide that had high visual impact.

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Are we really persuaded when retailers price something at $19.95, rather than $20?

Yes we are!

University of Florida marketing professors Chris Janisewky and Dan Uly investigated the way the human brain thinks about value and shapes bidding.

Their research is reported in Scientific American Mind (April/May 2008). When people judge an opening price they create mental measuring sticks. If they see a $20 Kettle they wonder why it is worth $19 or $18. That is rounded numbers.

But why the starting point is $19.95 our mental measuring sticks change. When we think about what it is worth, we start thinking about nickels and dimes instead of dollars, so a fair price for a toaster might be envisioned as $19.75 or $19.50.

The psychologists also looked at five years of real estate sales in Alachua County, Florida comparing list prices and actual sales prices of homes. They discovered that sellers who listed their homes more precisely at say $495,000 as opposed to $500,000 - consistently got closer to their asking price.

In other words, buyers are less likely to negotiate a price when they encounter a precise opening price.

So, the lesson is, if you are in a buyers’ market you should start with an exact list price.

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John Robert’s Spa owned by service guru John R. Dijuluis III, an American chain of high-end salons and spas whose is policy is that a ‘smile is part of the uniform’.

When you train your staff to greet your customers, ask them to notice the colour of the customer’s eyes.

Scientists using MRI scan machines show the names associated with smiling faces activate the orbitofrontal cortex – an area of the brain involved in reward processing.

People remember smiling faces. It’s simple - we want to remember people who were kind to us, especially when we are likely to come across them again in the future.

Even mega retailer Wal-Mart understands this. Staff follow a “10 feet greet” rule. Every time a staff member comes within 10 feet of any other customer or coworker, you must smile. If you run a service firm, make smiling a ‘non-negotiable’ behaviour.

The Chinese proverb ‘Don’t open a show unless you like to smile’, has more than a ring of truth to it.

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When you discover a compelling difference that sets you apart from your competitors leverage it for all you are worth.

Commerce Bank, from New Jersey, offers its customers extended opening hours - which typically run from 7:30am to 8pm, 7 days a week. These operating hours mean Commerce Bank is open for more hours than any other bank.

To drive its difference home, the branches follow the ten-minute rule. Branches open 10 minutes early in the morning and stat open ten minutes later than the official closing time. Can you remember the times when you ran towards your bank to see the staff close the doors at 4:59pm?

The 10 minutes dramatizes Commerce Bank’s key differentiator by adding an additional burst of creative magic.

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When you calculate the downside costs of not achieving customer engagement, its worth reminding yourself of what the benefits of achieving customer engagement are.

The Economist Intelligence Unit’s report Beyond Loyalty found 80% of its respondents said achieving customer engagement would improve customer loyalty. 76% said engagement would increase revenues. 75% said engagement would improve profits. And 56% beleived engagement would increase bigger market share.

When marketers being to seriously address the issue of engagement they might improve their credibility with their CEOs and board. The average tenure for a Chief Marketing Officer might also increase to above its current 21 month average.

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Most of us are appalling listeners. We may have 2 ears and 1 mouth - but we rarely use them in the proportions nature allocated us.

The famous editor, Maxwell Perkins (1884-1947) who is credited with popularizing Ernest Hemingway, believed no one really listens at most social events. To test his theory, he turned up late to a cocktail party where he grasped his hostess’s hand and said, “I’m sorry I’m late but it took me longer to strangle my aunt than I had expected.” “Oh, I completely understand,” replied the hostess, smiling sweetly, “I’m so happy you could come.”

Listening takes place on different levels. At level 1, the person simply hears us, but makes no attempt to emotionally engage. think of the bartender who doesn’t smile or affirm your order but turns to the fridge and gets the bottle of Stella Artois you ordered.

At level 2 the barman would make good eye contact and smile.

Level 3 listening involves engaging a person so they feel that they are the only person. They attentively listen to ever word you say and engage you emotionally.

All staff engaged in customer contact need to be able to listen at level 3. Can you?

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BIRGing - Basking In Reflected Glory is a delightful acronym coined by Arizona State University professor Robert Cialdini and his colleagues. Cialdini and his colleagues found more students donned the logo apparel of their college football team on Monday, following the big game, if their team had won over the weekend. The pride associated with winning encouraged them to wear their school colors.

Brand advocated similarly like to be associated with the hot brands which they perceive to be “winners”.

By way of contrast, Cialdini & Co. found there was a downside to BIRGing. When their team lost they actively tried to distance themselves from their school team. Cialdini & Co. termed the mirror side of BIRGing, CORFing - Cutting Off Reflected Glory

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“People duck as a natural reflex when something is hurled at them.

Similarly, the excellence reflex is a natural reaction to fix something that isn’t right, or to improve something that could be better. The excellence reflex is rooted in instinct and upbringing, and then constantly honed through awareness, caring, and practice.

The overarching concern to do the right thing well is something we can’t train for.

Either it’s there or it isn’t. So we need to train how to hire for it.”

This brilliant piece of insightful advice comes from a compelling read — Setting the Table, written by award winning New York restaurateur Danny Meyer.

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