Marketers are masters of deception. It’s sad but true, that many marketing strategies are designed to persuade you to purchase something that you may not actually need, want or require.
Here are just a few of the tricks that we fall for every day:
Decoy Pricing - A tactic that boosts sales of high-profit items by creating another version of the product solely to make the pricier versions seem economical by comparison.
Example: A coffee shop offers two sizes of coffee; the small cup costs £1 whilst the large cup costs £5. Chances are, you’re going to choose the small cup as it’s far cheaper. However, if the coffee shop then introduces a medium sized cup of coffee for £4, the game changes completely. You’re now more likely to choose the larger size as it’s only a little bit more giving you a better cost saving.
Miss It Miss Out – this one is demonstrated either by time or limited stock.
If you thought that you would miss out on getting hold of something because it would be only be available for a short amount of time or because stock was limited, you’re probably going to make that purchase quicker than you had anticipated.
Example: Online retailers like to highlight time or stocking levels e.g. “Only 10 left in stock” or a countdown timer is shown on-screen displaying the small amount of time left before the offer ends. Both these strategies are more likely to get the sale for fear of missing out.
The Loss Leader – an old favourite for retailers who are prepared to lose money on some items if it means getting you in their store to spend more money on something else.
Example: A retailer entices you into their store / website by offering a product at an amazing price. Whilst browsing, you then make several impulse purchases giving the retailer higher basket value or profit margins on other items.
The Gruen Transfer – the longer you spend in a shopping centre or store, the more likely you are to buy something.
Example: Shopping centres and furniture stores are especially good at designing layouts which are intended to confuse shoppers into spending more time there than they had anticipated. But I have to say that the best example I have seen recently is the duty free shopping area of an airport. The clever use of layout, product gondolas and flooring decals, can have you going round in circles trying to find the way to the departure gate.
Odd-Even Pricing – this is probably the most common pricing strategy designed to use psychological tactics to make it seem that one price is cheaper than another.
Example: A book priced at £4.99 is usually far more appealing to a consumer than a book that has a price ticket of £5. Although we can all see immediately that the first price is only a penny cheaper, our minds are wired automatically to round down, telling us that the item is a lot closer to £4 than £5.
But One, Get One Free – this one works so well because we’re all drawn to the word ‘free’. Everyone loves to get something for nothing which is what we think we’re getting with this strategy. What actually happens is that you’re more likely to purchase more of an item than you need due to the perceived value you believe you are getting. What is really happening is that the retailer sells more volume of a product, even though they are making slightly less margin.
Example: A retailer is selling soap powder on a BOGOF deal. You know you’ll use the detergent so you buy two (or more!) items, which at least doubles the basket value for the retailer. This makes BOGOF a far more successful promotion for retailers than a 50% off promotion which is why the former is used far more often.
Checkout Purchases - every mother knows how difficult it is to keep those little hands away from the product displays at checkout. Supermarkets are especially good at this by displaying sweets and chocolate at the checkout when the trolley has finally stopped moving.
Eye-line Buying – store merchandisers are experts at placing products at just the right position to gain your interest. You are far less likely to add additional items to your trolley if they are on the bottom shelf. Higher margin items are usually found at eye-level.
Coupon Purchases – how often have you purchased something from a store just because they sent you a promotional coupon? You probably wouldn’t have purchased anything from them at all, which for the retailer means that they’ve bagged a sale simply by taking a slight knock on margin.