“Go shopping.” ~ President George W. Bush shortly after 9/11
“Finance has increasingly made us creatures of time.” ~ William N. Goetzmann, “Money Changes Everything: How Finance Made Civilization Possible.”
The Sierra Club mails me shiny nickels proudly visible through clear pockets on the envelopes; earlier this year Capital One Visa paid me over $500 to use their Spark Business card for a few months; sundry magazines offer to send me months of free issues with no obligation; every week scores of websites try to sign me up for Freemium service – “Your credit card will not be charged until…”; for more than a decade Amazon gave free shipping with purchases over $25 (the joke was, “They’re losing money on every sale but they’re making up for it in volume!”) and now offers PRIME free 2-day shipping plus films, music and television shows free for a month and thereafter $99 per year.
All of these may seem benign… if… if there weren’t these things called algorithms that prey on the most unseemly characteristics of human nature, such as slothfulness.
Let’s break it down: although apparently counter-intuitive, the nickel sent by the Sierra Club (which is a highly admirable organization that I love and respect – except for their marketing) will subconsciously manipulate a sufficient percentage of people to feel guilty and send donations. Capital One is betting that a sufficient percentage of cardmembers will run up debt and pay interest on that debt plus annual fees. Magazines bet that a sufficient percentage of people will forget or be too lazy to cancel their subscriptions after the trial periods finish. Ditto for Freemium websites and software. Amazon essentially uses the same business model that crack cocaine dealers used in the 1980s, getting people addicted to instant gratification with Amazon Prime while making their non-subscription based services painful and expensive.
I prefer transparency, honesty. I like when 2-3% is added on to my dinner bill to pay for health insurance for the wait staff and it is noted on the check. What I dislike are those “Launch” techniques where people spend months “building trust, building relationships,” then fabricate fictional “anchors” such as “This xxxxxx normally retails for $8,000 but if you buy it within the next 24 hours it is only $197!”
Yes, prices ending in “7” sell more than those ending in any of the other digits.
Oh yeah, creating false senses of urgency and exclusivity never hurt: “This is a limited time offer!” “This WILL sell-out!” “Don’t miss out!”
Psychologists who study consumer behavior know silly facts like the average person has to see a new item 18 times and visit a website 3 or 4 times before making a purchase. Hence all of those “re-targeting” pop-ups that appear in the banners of the articles you read that just happen to promote Amazon/Target/Walmart/BestBuy items that you visited months ago.
Also, for decades psychologists have known that “the-foot-in-the-door technique” that encyclopedia salespeople used in the 1950s and 60s works, which is why the Sierra Club keeps sending me nickels.
All of these sales techniques make people think they need certain goods and services just to keep up with the Joneses and Kardashians. But one should ask: are there not psychological and social ramifications of all of this advertising, marketing, branding, selling, upselling, buying, lending and borrowing that exacerbate the culture wars between the haves and have-nots? (cf. Adam Curtis’ cogent “The Century of the Self”)
As Nate Cohn noted yesterday in the New York Times, “If there is a lesson for the United States in the decision by British voters to exit the European Union, it is the importance of the emerging split between the beneficiaries of multicultural globalism and the working-class ethno-nationalists who feel left behind. These issues have the potential to overcome longstanding partisan ties, even in the United States.”
For the only real winners of the Brexit vote were fear and Osama Bin Laden.