From “Presuasion” to FOMO: How to Spot 6 Common Sales Traps
Psychological insights can help you curb impulse buys.
Posted Jun 28, 2019
Have you ever visited the shopping centre with the intention to buy a much-needed rain coat—and instead returned with a new summer wardrobe (including two pairs of high-fashion sunglasses), an overpriced yoga mat, a new watch you don’t really need, and an upgraded kitchen blender for recipes you never *actually* intend to cook?
Shopping can be an intensely pleasurable experience; the mere action of purchasing luxury items often evokes exhilarating emotions. However, once the initial thrill wears off (and the bills pile up), a sense of guilt is likely to creep in. Did I pay too much? Did I really need another yoga mat? When am I finally going to start saving? And: What am I going to do about that rain coat?
There are many reasons for wanting to curb the number of impulse buys and reduce overall spending. Simple approaches can involve learning about your weaknesses in financial reasoning and paying attention to different types of shopping environments (e.g. targeted online sales pages vs. anonymous shopping malls).
However, for more long-term success in saving money, it may be necessary to study the different behavioural traps which are commonly used to lure you into spending money.
6 Common Sales Traps
The term “presuasion” was coined by best-selling author Robert Cialdini, who described it as the crucial stage preceding attempts of persuasion. In the sales context, it may refer to the way shops attract your attention or to specific tricks employed to put customers in a particular (e.g. generous) state of mind.
This initial stage may be crucial for increasing the prospective customers’ receptiveness for persuasive sales messages. In traditional shops, examples of “presuasion” may include offering free samples, playing pleasant background music, or enticing customers with mouth-watering smells. In online environments, a common practice involves sending customers a personalised email thanking them for previous purchases. Research suggests that such expressions of gratitude can increase the effectiveness of later sales messages by a staggering 100 percent!
2. The "cocktail party phenomenon"
The cocktail party phenomenon describes the human ability to focus attention on a particular sound or signal—even when surrounded by noisy environments. For example, people are highly attuned to the sound of their own names and can overhear them easily in conversations. Retailers use this phenomenon to their advantage: By addressing you with your first name, they cleverly capture your attention and make advertisements appear personal.
This is particularly common in the online retail environment, where newsletters contain targeted information designed to make you feel unique. Don’t forget, however: While you may be on first-name terms with many major fashion chains, you can hardly count them as your friends!
3. Price anchors
In a previous post, I examined the powerful influences of the so-called anchoring bias, which refers to people’s over-reliance on existing information when they try to identify baselines for making judgments. When deciding how much to spend on a new sofa, for example, you might look around the local furniture shops, get a sense of the average cost and use that information to guide your own spending.
But retailers are aware of the importance of baseline information, and this is reflected in the way they highlight price reductions to customers. In the sales section, they typically ensure the salience of the original item cost before reduction. The previous, higher price then serves as a baseline, compared to which any reduced price will appear as a bargain. Consequently, the item will be more appealing even if the absolute cost is still expensive. To tackle the anchoring bias, make sure you compare prices at different shops and set yourself a spending limit for individual items. A jumper that cost 1000 pounds may be reduced by 50 percent and still be too expensive!
4. Framing effects
Which product would you prefer to buy: One that was endorsed by 90 percent of product testers or one that was disliked by 10 percent? Even though both statements convey the same information, most people would prefer the first, because it draws attention to the product’s positive aspects. This is known as framing effect, and advertisers are acutely aware of its power.
Each sentence on sales posters and each line in TV commercials is usually carefully chosen to convince you of the product’s utter awesomeness. Hence, when reading adverts and product information, always pay attention to the phrases used—and try to read between the lines.
5. Social proof
Humans are intrinsically social creatures. This means we tend to care a lot about other people’s opinions. Telling customers about the popularity of a particular brand is therefore a promising strategy to promote further sales. Surely you can’t go wrong with Britain’s “favourite” range of beauty products, right?
In online shopping environments, another clever trick is to display the number of customers "currently looking" at any particular item. This information not only conveys popularity, but it also has another underlying message: With so many customers currently hovering over the pay button, the item is likely to run out soon. If you want one, you'd better make up your mind fast!
This leads us to the final sales technique, which involves invoking “FOMO,” or the fear of missing out. Ever since hunter-gatherer times, humans are programmed to avoid situations of scarcity. The worry about missing out can therefore be a huge motivator tricking people into hasty purchases.
Retailers make use of “FOMO” by stoking perceptions of scarcity. Browsing customers often receive information about the number of other interested buyers, about the numbers of items left on the shelves, or about the limited time an offer is valid for. Some online retailers use powerful graphics to make this information even more persuasive; ticking clocks or digital countdowns are increasingly common, and may create a sense of urgency or even panic in unsuspecting customers.
Advertising as Art
Do you recognise the sales traps introduced above? Have you ever fallen victim to them? Hopefully, learning about these methods will sensitise you to future attempts of laying hands on your hard-earned money.
If you're still unsure, a good starting point can simply be delaying your purchases. Even a short wait might be enough to inhibit your impulses, assess the situation, and identify the sales strategy of a particular company. And while you have good reason to resent the many hidden sales traps, a more reflective approach could even help you to appreciate the clever, creative, and often beautiful ideas underlying so many advertisements.