Category: Portland advertising

A Price Hike Can Increase Demand

Over at Landing the Deal, Dan Tudor uses the launch of the $2,500 Tata Nano automobile as a jumping-off point in the debate over whether the lowest price always wins. Below are a couple of cases where it doesn’t:

In his book Influence: The Psychology of Persuasion, Robert Cialdini writes of a jewelry store owner in Arizona who was stuck with some turquoise jewelry that wasn’t selling. She told one of her employees to cut the price, but the clerk misunderstood her and doubled the price instead.

A few days later, before they’d realized the mistake, the entire allotment of jewelry had sold out. The increased price had managed to make the jewelry more desirable to the customers who walked into the store. Cialdini explained the phenomenon this way:

You and I exist in an extraordinarily complicated environment, easily the most rapidly moving and complex that has ever existed on this planet. To deal with it, we need shortcuts. We can’t be expected to recognize and analyze all the aspects in each person, event and situation we encounter in even one day. We haven’t the time, energy or capacity for it. Instead, we must very often use our stereotypes, our rules of thumb, to classify things according to a few key features and then to respond without thinking when one or another these trigger features is present…

The customers, mostly well-to-do vacationers with little knowledge of turquoise jewelry, were using a standard principle — a stereotype — to guide their buying: “expensive = good”.

The higher price told them that this was “good” jewelry, so they bought it. Cutting the price would have steered them in the opposite direction.

Another example of this phenomenon at work appears (thank you, Chris Speer of 1190 KEX Radio) in a recent Associated Press article on a wine tasting. A research crew at California Institute of Technology discovered that a higher price tag on the bottle made the wine inside tasted better.

The lesson here is that the supply-and-demand price equation from your college economics doesn’t always take consumer psychology into account. Sometimes a price hike will help your sales.

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Can You Solve All Your Problems With a 30-Second Spot?

The short answer is… um… no.

A longer and more interesting answer appears on a recent episode of the public radio show This American Life. The episode is called “Shouting Across the Divide” (it originally aired in 2006) and concerns “what happens when Muslims and non-Muslims try to communicate, and misfire.”

In a segment called “America, the Ad Campaign”, the US State Department hires an ad agency to “sell American values to the Muslim world.” It doesn’t work out so well. The show runs an hour, and the segment is about 15 minutes. You can listen to the episode, or download an mp3 for free here.

The episode delves into some fairly contentious areas of racial and cultural politics. I will carefully avoid them here, and offer two observations for those who, like me, write ad copy for a living:

1. If your business has big problems, advertising won’t fix them.

2. It’s tough to sell anything — a product, service, or idea — when you don’t like or understand the people you’re marketing to.

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Why Logic Doesn’t Always Work in Marketing

It’s a cliche in the sales and marketing world — people make buying decisions emotionally, not logically. Tracy Coenen of WalletPop offers evidence from the world of cosmetics. Citing a university study of 300 women in England, Coenen reports that women using a product that isn’t working are likely to keep using it — and women using a product that actually works are likely to stop.

The researchers believe that fear may be the motivating factor behind this behavior. When the products work, women have less anxiety about the problem, so they stop using the stuff. When they think the products aren’t working and they’re concerned about their appearance, they stick with the products out of fear.

The lesson to those who depend on repeat business is to think about not just the problem that you’re in business to solve, but the underlying emotions of the people experiencing the problem — and how they really react when it’s solved.

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How Language Affects Real Estate Prices

For those in any industry who agonize over their media choices and then have someone “just bang some copy out”, here’s more evidence that every word can be precious. 

Interesting article on msn.com about how the choice of words in a listing can increase — or lower — the perceived value of the house.  

“In real-estate listings, what’s the difference between describing your home as “beautiful” versus “move-in condition”? About $12,500 on a $250,000 home. Professor Paul Anglin, a real-estate economist in Guelph, Ontario, says that homes described as “beautiful” in real-estate listings sell for 5% more while “move-in condition” has no effect on sale price.”“

Word choices can also affect the time it takes to sell.

“Listings with the words “beautiful” or “gorgeous” sold 15% faster. “Landscaping” in a listing hastened a sale by 20%. Describing a property as in “move-in condition” quickened the sale by 12%. Calling a home a “handyman special” cut sale time by half (researchers excluded listings that used the term to describe a workshop or hobby area). “

The article’s especially valuable for the chart that matches individual words up with their effect on listing price, sale price, and speed of sale.

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Of Hot Chicks and Peak Oil

My former colleague Randy White is an activist in the Peak Oil movement. On his Lawns to Gardens Blog he’s posted a split-screen video.

On the right side, a very attractive young woman, dressed for extremely warm weather, does a dance that would melt a glacier. On the left side, the same woman (I think), in much more subdued clothing, gives her views on what’s going to happen when all the oil runs out.

In addition to being an ironic commentary on the advertising business, it illustrates the attractions and pitfalls of using sex to sell:

1. I watched the video from beginning to end — nearly four minutes in all. This would not have happened in the absence of the hot dancing chick.

2. On the other hand, the speaker’s message did not register with me at all. I was too busy watching the hot dancing chick. 

We’ve all seen TV commercials that made us laugh, only to realize later that we can’t remember what the ad was for. Sex, like humor, can be an effective way of holding your prospect’s attention long enough to deliver the sales message. In order for the sales message register with the prospect, the sex or humor needs to be integrated into the pitch. Without that integration, your prospect won’t remember what you are trying to say.