Wednesday, March 19, 2014

The Law of Reciprocity and How It Builds Sales


The Law of Reciprocity

Chances are, you've thought that the chocolate or mint your waiter brings with your bill, along with a friendly smile, was a kind gesture, right?  Wrong—at least in many cases. The Journal of Applied Social Psychology summarized numerous studies showing that this mannerly move is actually a tactic used to get higher tips. How? By tapping into a driving force of human behavior: reciprocity
Various studies show that when someone does us a favor—stranger or friend—we feel compelled to repay them. When we indulge in free samples at the grocery store, we tend to feel guilty if we don't buy something. And using a gas station bathroom on a road trip without buying a thing has some of us scurrying quickly out the door. Perhaps it's part of our survival instinct to “hold our own” or a nurturing instinct to support others on a joint quest to thrive under the same societal rules. 
Regardless of what drives our need to reciprocate, it's a very real and key component of psychology-based marketing: strategies and campaigns founded on psychological principles and behaviors. Decades of research shows that we're more inclined to do favors for friends who once did something nice for us. When we return the favor, the value of our “payback” is often greater than the original good deed that initiated the act. 
Think about your own patterns. Or consider this example: You dog-sat your neighbors' poodle for 10 days in return for them watching your Shih Tzu for only two days. Somehow you called it even, despite the fact that you got a hyper, yapping dog that's smart enough to get even by leaving you daily messes for much longer than your neighbor watched your exercise-adverse Shih Tzu. Somehow, I suspect many of you can relate.
The same thing applies in business. When a salesperson offers to throw in a perk upon purchase, like free floor mats with the purchase of a $45,000 car, we're more likely to buy. Silly, given the $100 value of the free gift compared to the debt of the five-year loan; yet, we do it all the time. Similarly, when a company gives us something nice “just because,” we buy more.
In marketing, the rule of reciprocity rules when it comes to one of the most affordable things a business can do to achieve sales, and secure loyalty. Even a small token that costs you next to nothing can pay huge dividends. In fact, I've often wondered why gas stations and convenience stores don't give away their coffee free with purchase all day, every day to compete with the station across the street. For a free coffee that about a $1.50 value, which costs the station about $0.10, customers are more likely to come in for gas. Plus when they leave, they're likely to buy something else to “reciprocate.” 
There are many things thriving brands do today to trigger reciprocal purchases besides free coffee. Here are some examples:
  • Beaver Creek, a ski resort near my home, hands out free hot chocolate when you get off the lift in the cold winter mornings and free, warm chocolate-chip cookies when you come off the mountain at the end of the day. It's no surprise that guests are loyal to this small but nice resort and return often, despite the fact that there are many other resorts at which they could ski.
  • Gluten-free energy bar provider Larabar gives out free Larabars to community groups wanting to offer health fair or educational event attendants goodie bags or free snacks.  While I can't quantify the number of sales associated with this giving program, I can safely state that Larabar is one of the most popular snack-bar brands in the U.S. and beyond.
Reciprocity also works in the “pay-it-forward” context. Research by Cone Communications shows that consumers not only want to know that a brand engages in social responsibility programs, but they also want to know the actual impact of those programs on the intended beneficiaries. One report shows that more than 80% of consumers are more likely to purchase from brands that communicate the direct impacts of these programs than ones that don't. 
As you go about creating new customer engagement programs and direct marketing packages for your brand, look for opportunities to give rather than to get.  Whoever makes the first kind gesture, as studies show, tends to gain the most. 
Jeanette McMurtry, principal of e4marketing, is an authority on psychology-based marketing, speaking at business events worldwide. She is a Back by Popular Demand trainer, speaker, and course instructor for the DMA.

Tuesday, March 4, 2014

Enjoy some insights from my latest column for DM News at www.dmnews.com.

Making Ads Add Up for More than a Day

Making Ads Add Up for More than a Day
Making Ads Add Up for More than a Day
Remember Doberwawa? Oh, and that great Muppet ride, and that vignette on love versus war? Most important, do you remember what brands or products were behind these Super Bowl ads?
You're not alone if you answered no. Neither do at least 65% of Super Bowl viewers each year, according to advertising research firm Communicus. Beyond not recalling the products promoted in ads—which cost brands about $4 million for 30 seconds—44% of us can't even recall the ads shortly after. (As a Broncos season ticket holder, I'm trying not to recall the game either).
Super Bowl games give NFL coaches and commentators plenty to analyze game day and beyond. They also provide just as much fodder for advertising pundits to chew on, savor, and spit out, as the ad industry crowns its own champion at the end of the fourth quarter with the U.S. Ad Meter and other coveted honors. Beyond USA Today's "Most Liked Ads," researchers have been analyzing whether the industry's most expensive and creative endeavors pay off. The findings? Pretty much an epic thud by traditional marketing success standards—you know, the old fashioned metrics, like response rates, sales conversion, and ROI. Budweiser topped the likeability list this year and last with “Brotherhood” for 2013 and “Puppy Love” for 2014. However, “Puppy Love” may have helped sell more Labrador puppies than beer. The same Communicus study concludes that 80% of Super Bowl ads don't help sales. 
Yet every year, big brands return for more. Companies now compete for likeability, tweets, YouTube views, and other honors that really don't mean anything if you care about revenue gain and ROI. In addition, new Super Bowl success metrics have emerged in recent years, including the emotional reaction score. The emotional reaction score, calculated by Innerscope, looks for physiological reactions of ad viewers to determine which ads generated the most emotions like joy, excitement, and frustration.
Contrary to what many marketers may think, an ad's level of emotional impact doesn't always result in strong revenue impact, especially if these ads appeal to our "conscious" emotions versus our unconscious ones or those associated with key behavior drivers like loss aversion. 
Only one metric matters when it comes to Super Bowl ads, or any other ad for that matter, and it's purchase intent. What tugs at our heartstrings or moves us to giggle doesn't always move us to purchase, which is the ultimate test for all things marketing.  
This year's winner for purchase intent is yet to be announced; however, we have much to learn from past ads scoring high for this metric. For example, “Got Milk” was one of the leaders for 2013. The ad featured Dwayne Johnson, who put his job of saving the world on hold to get milk for his daughter. This ad hit deep into the psyche of parents by tapping their fear of failing their children. In addition, one of the highest purchase intent ads from 2012 was Chevrolet's “Apocalypse,” which depicted the reunion of fellow Chevy truck drivers experiencing the end of the world. This too scored highly because it tapped into our "unconscious" survival instinct and need to feel prepared for disasters.
Ads that are clever don't always sell. They entertain. Ads that are emotionally charged don't always sell either. But ads that appeal to our unconscious and instinctive emotions, like survival and security, tend to inspire behavior and influence purchase. When developing your brand's messaging platform for ads, social media, and all communications efforts, start with the following three mission-critical tasks:
1. Define the core emotion associated with your product. Is it fear of loss, frustration, fear of failing others, or uncertainty about the future? Or is it anticipation of security through social status improvement? Enhancing joy or acceptance from others? 
2. Determine how your product calms the associated fear or fulfills the anticipated joy. For example, if you're selling insurance, you're really selling assurance for quality of life.
3. Test different copy approaches for communicating the above emotional values. Once you nail the right one, keep it fresh by periodically testing new variations and offers.
Jeanette McMurtry, principal of e4marketing, is an authority on psychology-based marketing, speaking at business events worldwide. She is a Back by Popular Demand trainer, speaker, and course instructor for the DMA.

Thursday, January 9, 2014

Honored to be asked to submit my projections for Hot Trends in 2014 for DM News this month.  Here's a link to the full article including my thoughts about marketing success and those of 29 other industry experts.  Enjoy some great insights on all aspects of marketing.  Our world is changing and its all good!

Click here for Hot Trends 2014. 


Tuesday, October 29, 2013

Oh what we will do for love! and the wonderful rush we feel each time we fall for love, new and old.
While we have been conditioned to believe that love is in the heart, it is actually in our hormones. Each time we fall in love, or experience the joy of discovering that a loved one, loves us, our bodies actually produce a hormone called oxytocin which gives us that warm, excited rush that makes us feel like we can take on the entire world and win! This feeling makes us more open to others, to taking chances, to splurging, and spending more than we would otherwise. Many marketers know this and spend countless resources attaching their non-love oriented products to love in order to create that hormone release that often motivates us to throw judgement out the window and live for the moment.

Beyond the powerful effects of oxytocin and consumer behavior, our bodies react to other hormones in similar ways. When we feel connected to others, important, we release other hormones that drive our behavior and thoughts. When we receive messages of hope that override feelings of despair or frustration, we again experience chemical changes in our brain that affect our reasoning. Religious efforts are a great example of how this happens daily in our lives. When we hear a sermon that our trials will be resolved and joy restored to our lives, we get feelings of hope, courage and anticipation of the reward. We then seek to follow the path set forth by the messengers, and feel "inspired" to stay the path they are leading us toward.

So the question becomes, when are we reacting to hormonal releases triggered by powerful presenters of messengers, or true inspiration derived from a source greater than those on earth?

Share your thoughts on this powerful concept...


Saturday, September 7, 2013

How "Individuized" are your customers? Applying Jung's theory to marketing.

Although Carl Jung might be best known for his theories on introversion and extroversion, we marketers need to take note of Jung's theory of Individuation. Also known as his Self-Realization theory, his premise that throughout our lives we really project four different personalities, provides marketers with a good framework on how to address, and when to address, the different priorities, perspectives, and values of our individual customers. Jung maintains that when we hit our mid 30's, our values shift from one of materialism, and self-focus, to those more aligned with defining our life's mission, and that as we get into our even later years, our focus becomes altruistic and on our life's legacy.

Jung also, like other psychologists, teaches that most of what we do is unconscious, and that our psyche is really one of mass confusion. If this is the case, as other psychologists agree that it is, we need to adapt our marketing messages to appeal to the unconscious mind as it changes for each of Jung's stages of our individuation in addition to the changing influences of the generations consumers pass through in their life cycle.

Complicated? To say the least, but when we marketers study how the human psyche works, rationally and irrationally, we get a much better window into what we need to do to adapt our brands to adapt to the ever changing and oh so complex consumer.

Some great resources to help you understand the unconscious drivers of the consumer mind include, "Thinking, Fast and Slow" by Daniel Kahnemann, "Drive," by Daniel Pink, and of Dan Ariely's, "Predictably Irrational."

Please share your thoughts on Jung's theory of Individuation and how marketers can embrace it for success.

Thursday, June 20, 2013

Clearly I am no better than the plumber with the leaky faucet as I'm the marketer that helps clients stay current on their blogs, but don't seem to do it well myself! That will change...so thanks for following my blog and staying patient. There is a lot of wonderful new developments every day for those of us keyed into psychology based marketing. New research, new thinking, insights and more as to how this complex human brain we use and target every day works. I plan to be much more vigilant in sharing what I learn and observe daily.

This week, I"ve spent meeting with a client in Portland Oregon. I quickly understood the fascination with the TV show, Portlandia and the slogan, "Keep Portland Weird", both in a good way of course. But as I observed the long line that wrapped around twice in front of the VOO DOO DOUGHNUTS store on 3rd street, I was reminded just how strong human curiosity is. I think its safe to say that this line that had to be about an hour long for doughnuts in the middle of the day was made up mostly of tourists whose curiosity got the best of them. Really? How different can doughnuts be? At some point, the dough, frosting and toppings are just not that different than what you might find yourself. But you hear about VOO DOO's doughnuts and how their names and shapes and food decor make this an "adult food store" and you just have to go and see it for yourself. Curiosity drives behavior like few other mental states do. We want to see, feel, and experience something ourselves, to see if it really is that cool, and so we an elevate our own sense of belonging or cool, which directly relates to our unconscious high gear driver of acceptance and status. Topic for another blog another day.

So to you my business colleagues and friends...what brilliant ways are you creative curiosity around your brand? With most marketing trite and cliche, curiosity is the new ROI.

Share your thoughts and thanks for SHARING this blog with your friends.

Tuesday, November 6, 2012

Consumers Vote Everyday

Although today is a critical day for voting in America as we cast our votes for the ideology that we personally believe reflects our values, we consumers cast similar votes every single day. Our unconscious mind might decide immediately upon glancing at grocery shelves what products we are attracted to, but our conscious minds ultimately drive choice. More than 80% of consumers polled recently consciously choose the brand that is most engaged with community and social issues, and does the most good for others. We vote with our purchasing dollars and our loyalty and our word of mouth many times every single day.

As you move into 2013 with your new marketing programs and messages, consider yourself on an election campaign. Share your values, your passions, and what you stand for. And give people a reason to vote for you daily, and share your story with others yet to cast their purchasing votes.

Make it a great day as you vote today for our country's leaders and for the brands you believe in!