Fulfillment at Any Age

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Discounting the discount: How to avoid retail traps

Five ways to benefit from holiday sales

You've seen the ads: "One-day sale! Starts Saturday! Preview day Friday!" Ads such as these that come to you in the mail, are shown on television, or appear in your local newspaper attempt to lure you to the store with unbelievable deals.The one-day sales last for two or three. Black Friday, traditionally the Friday after Thanksgiving, began for some retailers in October. And rather than wait until Friday, many stores are now opening late in the day on Thanksgiving itself. On July 4, there were plenty of "Christmas in July" sales everywhere. Many market experts believe the poor economy is stimulating this dramatic upswing of discount madness. But are the deals you hear about in these aggressive ad campaigns really going to save you money?

Social psychologists provide us with some valuable insights into the market strategies behind discounts and other sales tactics. Robert B. Cialdini explains these strategies as exploitation of our desire to maintain consistency. Once consumers discover what they see as a special deal, they find it hard to back out of their decision to buy. They want to appear consistent, so if they say they'll buy something, they want to stick to that position, even if the deal turns out to be based on a false promise.

We'll start with the "that's not all" technique, which is most like what we see in situations such as Black Friday. Discount coupons are offered that seem to reduce prices to such a ridiculous degree that the price of an item seems too good to pass up. Consider the hypothetical case of a "keepsake" holiday ornament that cost the retailer $10.00. The retailer's desired profit is $2.00. The original price on the sales tag is $20.00 with no markdown included. While you're studying the sales tag, the salesperson comes over and announces that today there is a special offer of a 20% discount ($4.00). Sounds good to you, but it's still more than you want to pay. The salesperson now offers you an extra 10% off the 20% (because you're wearing red), bringing the price down to $14.40. Deal! The retailer has made more than the desired profit and you feel great because you "saved" $5.60.

Now let's look next at the "not-so-free-sample." This occurs when a salesperson, for example, at a cosmetics counter, gives you a little bottle of cologne or a complementary makeup application. Perhaps at the grocery store you are offered a little piece of cheese or fruit. No obligation to buy! Despite the fact that you have no need for any more Chanel No. 5, night cream, or fancy cheese, you feel an overwhelming urge to buy it anyway. Later, you examine your purchase and wonder what on earth you were thinking. This was the last thing you wanted or needed. But there's also a chance that eventually you will become wedded to the product and become loyal to the brand. In one study of toothpaste sampling, researchers found that consumers who received free samples of toothpaste in a newspaper circular were more likely to use that particular toothpaste over the one year period of the study (Bawa & Shoemaker, 2004). Why does this work? You've been given something, seemingly for nothing, and now you feel obligated to reciprocate by buying the item.

In the "foot-in-the-door" technique you buy someone a gift- perhaps the perfect hat- the one that will make your mother, girlfriend, husband, etc. supremely happy. At the checkout counter, the salesperson points out that there's a matching scarf you should definitely purchase as well because it will make the supremely happy recipient even more ecstatic. In fact, you're told, if you don't buy the scarf, the recipient will be disappointed. The seed of doubt is planted. You've committed to making the recipient happy but now it seems you'll be letting that person down unless you sweeten the deal with the extra purchase. As a result, you've doubled the cost to yourself and gone way over budget. In one of the studies demonstrating this technique, researchers went house to house, asking homeowners if they would fill out a brief survey. Most people agreed. Then the researchers came back and asked if they could go through every cabinet in the kitchen to see what products were being used, a process that took 2 hours. Having said yes to the small favor, the householders were more likely to agree to the large one.

Similar to foot-in-the-door is "low balling." You are told that an item is a certain price and you agree to buy it at that price, supposedly vastly below retail. Before you plunk down your hard or plastic cash, the salesperson announces that there was an error. The price is actually slightly higher or the deal that was promised won't be approved by the manager. Now what are you supposed to do? You said you wanted the item. Now it's going to cost you a few dollars more. Are you going to back out of the deal? If you do, you'll look indecisive or, worse, like a cheapskate. Unlike foot-in-the-door, you haven't actually bought anything yet; you've agreed but haven't carried out the behavior. In a study demonstrating low-balling, researchers asked potential participants to be in a study to help a student in need of volunteers. After they agreed to be in the study, the researchers then informed the potential participants that the study would take place at 7 am (a notoriously early time for college students). If they now declined to participate they would look like they didn't' really want to help.

Are you seeing yourself in any of these scenarios yet? If not, hold on- there's one more. In what's called the "door-in-the-face," you tell a salesperson that you want to buy a videogame for someone in your family. The salesperson takes you over to the display case and excitedly tells you about the latest and greatest to hit the stores, such as Call of Duty Black Ops. It also happens to be well over what you thought it would cost when you made the decision to buy the game. Then the salesperson shows you another game that's considerably cheaper but still more than you planned to spend. Now that you said no to the first item, you are more likely to say yes to the second which, in comparison, seems cheap. In the original research on the door-in-the-face technique, students were asked to volunteer all day to help a local agency (the "door"). Most people said no, but they were more likely to agree to help for a few hours than if they hadn't been asked to volunteer for the whole day.

These are the wily ways that retailers have long known about but are now being quantified in the lab by psychologists. Consumers can easily be led to make commitments to buy without thinking critically about their actions.

To prepare yourself for your holiday shopping adventures, keep these tips in mind:

1. Avoid feeling obligated to the salesperson. A good salesperson is able to relate well to people. He or she will engage in a variety of behaviors to make you feel "close." Now some salespeople really might like you, especially if you have a long-term relationship as a customer. Even total strangers may take a shine to you. But remember that this is a business situation, not a true friendship, and you'll find it easier to say "no" even after getting the proverbial free sample.

2. Don't worry about looking inconsistent. Who cares if a stranger thinks you're indecisive, or appear inconsistent? Wavering on a deal can only benefit you. What's more, the salesperson will probably respect you more, not less, if you show that you are able to say no.

3. Take a detour around the guilt trip. No need to feel bad about refusing a deal that was offered to you that all of a sudden gets rescinded when the deal goes south. You can even try sticking to the original deal offered to you and see if the retailer comes around. If the guilt trip involves an alleged disappointment to someone else (as in the scarf example), just remember the recipient will most likely never know the difference and will be just as happy with the original gift you had in mind.

4. Be prepared to walk out. You don't have to stick around for a bad deal. If you don't like what's happening at the point of sale, or if you feel that someone is offering a sample with strings attached, then turn on your heel and leave! This is a great time not to live in the moment, but instead to get out of the moment and reflect on what you wanted to do before the salespitch went into high gear. 

5. Keep looking for alternatives. When the salesperson uses door-in-the-face, remember that he or she probably knew that you wouldn't bite at the highly expensive option. The lower priced but still expensive option was made to look cheap in comparison. If you hold your ground, you'll find that there are lower-priced options that will still make the recipient happy.

As you've seen, there are a variety of pressure tactics that manipulate consumers into buying something they don't want or spending more than their budget allows. Marketers didn't need social psychologists to tell them how to do their jobs but as consumers, a little bit of psychology can go a long way to help us resist these pressures.

Follow me on Twitter @swhitbo for daily updates on psychology, health, and aging. Feel free to join my Facebook group, "Fulfillment at Any Age," to discuss today's blog, or to ask further questions about this posting. 

Copyright Susan Krauss Whitbourne, Ph.D. 2010

References:

Bawa, K. & Shoemaker, R. (2004). The effects of free sample promotion on incremental brand sales. Marketing Science, 23, 345-363.
Cialdini, R.B. & Goldstein, N.J. (2004). Social influence: Compliance and conformity. Annual Review of Psychology, 55, 591-621.
Burger, J. & Cornelius, T. L. (2003). Raising the price of agreement: Public commitment and the low-ball compliance procedures. Journal of Applied Social Psychology, 33,(5), 923-934.

 

Susan Krauss Whitbourne, Ph.D., is a Professor of Psychology at the University of Massachusetts Amherst. Her latest book is The Search for Fulfillment.

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