All businesses need to motivate customers and employers to do something, whether that’s buying a product or just performing a job.
There are two ways we can motivate people to act: manipulation and inspiration.
Here are six common manipulation tactics and why they don’t work.
Lower prices induce people to buy, so companies engage in price wars and sell at rock-bottom prices.
But price manipulation can be dangerous for a company. When a customer becomes used to paying a low price, it can be nearly impossible to increase the cost of an item.
This creates a market of commodities, where companies have to create more products to keep their revenue up. So while lowering prices drives business, it also makes it hard to earn a profit in the long run.
Promotions are short-term programs (often referred to as “value added” programs) that offer a temporary incentive to make a purchase immediately. Some common promotions include limited-time sales, cash-back offers, coupons, or mail-in rebates.
We’ve all experienced promotions, and they’re a common manipulation for the car industry.
To avoid the financial penalty of promotions, companies often design rebates to be difficult to cash in on. Nearly 40% of customers never get the rebate, since they don’t follow the steps to get the refund. While this manipulation has a short-term financial advantage, it costs in long-term reputation and repeat business.
Fear is the most powerful manipulation because it taps into our survival instinct.
It’s also a common tactic: think of anti-drug advertisements or public service announcements that caution you to wear your seatbelt lest you die in an accident.
In the business world, fear is often used to convince us that if we don’t buy a particular service or product, something bad will happen to us. (Shortform example: a good example of this are pharmaceutical advertisements, where people are told that not taking a certain drug will adversely affect their longevity or quality of life.)
While often nothing bad will really happen to you if you don’t buy said product/service, fear makes customers feel like it will—which is an effective manipulation.
Aspiration taps into people’s desire to have more, do more, or be better. They’re most effective if the people they target are insecure or worry about achieving their goals.
Aspiration sounds a bit like inspiration, but they’re different things. For example, aspiration gets people to buy gym passes, but it takes inspiration to get a person to use them. That’s why gym memberships rise by 12 percent in January, but only a fraction of those people ever use them.
The biggest issue with aspirations as a manipulation tactic is that they create a desire for short-term satisfaction when only long-term solutions work. Aspirations might get people to act for a little while, but they fail to maintain their momentum.
When a company claims that a majority of people or experts are using their product, they’re using social pressure--also known as peer pressure--as a manipulation. That’s why advertisements often make claims like “four out of five experts agree” or that “millions of satisfied customers” believe their product is the best!
Peer pressure works because it plays into our deep-seated fear that other people might know something we don’t. In other words, by invoking the majority, peer pressure makes us worry that our decisions are wrong.
That’s why celebrity endorsements can be so effective. When a celebrity talks about a product, it makes people think the product is good, or that buying that product will make us more like the celebrity endorser. Think of examples like Michael Jordan endorsing Gatorade and Nike, or Tiger Woods endorsing everything from Titleist golf balls to GM cars.
Novelty — defined as being “new” or “unusual” — is often marketed as “innovation.”
But novelty and innovation are very different from one another.
Ultimately, novelty tricks consumers into thinking that a product or service is innovative when it’s not.
We can see the difference between novelty and innovation when we look at two “innovative” phones: the Motorola RAZR and the Apple iPhone.
Whenever companies introduce multiple minor variants of a product, that’s a sign that they’re just practicing novelty instead of innovation, like Colgate’s thirty-two types of toothpaste.
Manipulations are common because they work in the short term. We live in a world where we value quick results.
As a result, manipulation tactics have become pervasive. Most companies use manipulations to get consumers to choose their product or service. And it goes beyond business: manipulations are commonly used in politics, too.
In the end, however, manipulations only lead to short-term profits. That’s because manipulations lead to transactions, not loyalty. Just like the mallets and car doors from Chapter 1, manipulations are a way companies can slap a bandage on a deeper problem. Because the results are temporary, companies have to keep using manipulations to be successful.
Manipulations are an excellent tactic for transactional businesses where you only do business with a customer once.
But for any businesses that want lasting relationships with repeat customers, manipulations don’t help.
In fact, some manipulations can even harm a company’s ability to weather downturns in the economy. For example, the American motor industry--which embraces manipulations--found itself struggling in the economic downturn of 2008.
Ultimately, manipulations create stress for buyers and for sellers.
Manipulations are dangerous because their short-term effectiveness has made them the norm. As a result, companies feel pressured to do what their competition is doing. In other words, if the competition is using manipulations, then it’s more likely that your company will, too.
The economic crisis of 2008 is an extreme example of the danger of manipulations.
What’s the alternative to manipulation? Inspire your customers with your WHY.