20 sales tactics that trick you into spending

20 sales tactics that trick you into spending

20 sales tactics that trick you into spending
Jessica Wei
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20 sales tactics that trick you into spending
For many, the activity of shopping is a stress-relieving dopamine kick that makes us feel temporarily happy with shiny new items. But little do we know that companies have spent decades studying the habits and behaviours of consumers, in the pursuit of parting us from our hard-earned money. Here are just 20 ways that brands keep us spending.
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Subscription boxes
In the last few years, consumers have seen the rise of the subscription box, an e-commerce service that allows shoppers to receive products from companies on a recurring basis through the mail. Now, customers can receive meal kits, makeup and skincare, toys for pets, toothbrush heads, razors, and personalized outfits on a weekly, monthly or bi-monthly basis. According to McKinsey and Company , the subscription box market has increased by over 100 per cent per year over the past five years. However, there are major drawbacks to subscription boxes if you’re trying to watch your spending: by paying for the element of surprise, subscribers lose control of what they’re actually purchasing and can end up with many items they don’t need. Many subscription boxes come with stiff return policies, and a lot of companies purposely make it difficult to cancel the subscription.
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Paid memberships
More and more companies , from e-commerce giants to furniture shops and grocery chains, are relying on a fee-based membership model to win customer loyalty. These paid memberships promise steep discounts, free shipping, exclusive member events and other perks, but in the long run, they can cost the member much more . Customers may find themselves buying much more than they need to offset the cost of their membership, or automatically purchasing from the brand without adequately shopping around for better deals. Before signing up for a membership, it’s important for shoppers to consider just how many purchases they intend on making per year at that store, and how the benefits will actually help them.
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Fear-based marketing
Companies incite fear all the time in their sales campaigns, from threatening someone’s sense of safety to sell tires or just preying on a shopper’s fear of missing out. Fear-based marketing occurs in commercials, on food labels, during last-chance sales and through clerk interactions. Fear has been shown to stimulate greater brand attachment and create a sense of urgency . By just recognizing that sensationalism sells, shoppers will be able to tell the product apart from the over-inflated message of fear and make more level-headed purchases.
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Elaborate checkout displays
Ever wonder about the labyrinthine path lined with small, lower-priced items that leads to the checkout counter at stores like Sephora and larger discount department stores? Or why every supermarket seems to have racks of magazines, gum and candy bars near the cash register? Retailers have long known that checkout displays are incredibly effective at getting shoppers to squeeze in that last impulse purchase before leaving the store—and shoppers are very susceptible to impulse buying. CNBC reported last year that on average, American consumers spent a total of US$5,400 annually on impulse purchases. After a bout of shopping, shoppers may be in such a state of decision fatigue that they’ll be more likely to grab a candy bar than if they had seen it on their way into the store. While we all fall for last-minute purchases, just recognizing how grocery stores and shops try to trick you into buying will help curb spending money on unwanted items.
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Email lists
An increasingly popular method that brands are using to connect with their customers is email marketing—sending newsletters, sales alerts, and new product information through email. In fact, email marketing has proven to be up to 40 times more effective than social media marketing, yielding a buying time that is three times faster, both online and in-store. This is great for brands, but not for shoppers trying to be more discerning about their purchases, as signing up for these lists encourage brands to make targeted ads to you through traditional sales tactics such as exclusive discounts and “free” gifts. Speaking of which…
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“Free” gifts
Who would object to a free gift? In the world of consumer marketing, there are many ways that “free” can often lead to customers paying more unnecessarily. A study from researchers at MIT found that respondents were more likely to value an item marked “free” higher than a similar item that was priced at any amount. But the concept of “free” can also impact shoppers in unanticipated ways : USA Today reported that when 7-Eleven held a promotion giving away free 7.11-ounce Slurpees, Slurpee sales went up by nearly 40 per cent, suggesting that when consumers are offered a free sample, they will feel the obligation to reciprocate the generosity and purchase the full product. Of course, getting a free item is great when you sincerely want the item you’re receiving, but too often, the word “free” leads consumers to paying more for items of lesser value, from mystery gifts to full-sized Slurpees.
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Deceptive discounts
High-low pricing—the system of pricing items at high everyday prices to give customers the illusion that they’re saving a lot of money with coupons and sales that deeply slash that initial price—is a popular tactic used by many mainstream retailers. However, a paper by the Harvard Business School found that customers are equally liable to fall for “fake discounts”—that is, retailers applying a so-called “discount” to an item that was never priced at its originally stated price to begin with. Outlet stores are more likely to push this false discount by providing two prices on the tag—the “original” price acts to reinforce the item’s projected true value, while the “discounted” price increases the customer’s sense of urgency to purchase the product.
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Decoy pricing
In similar fashion to false discounts that fool shoppers into believing that they’re walking away with an incredible deal, some retailers set their everyday prices at a specific range to influence consumers’ perception of the value of an item. For example, phone companies may offer two separate versions of one product at significantly different price points with the hope that customers purchase the cheaper model (with the assumption that it is a much better value for their money). Other studies have found that when given the option of two different sizes of movie popcorn, customers will opt for the smaller, cheaper size; but when a medium-sized option is given that’s priced close to the price of the larger size, people are more likely to purchase the large, assuming there is more value in the large size. Understanding which option the retailer is trying to drive you towards will give shoppers a clearer idea of the actual value of a product versus the prescribed perceived value.
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Charm pricing
Charm pricing has been around for so long, most shoppers almost expect items to be priced just a few cents or dollars below a round number (like $4.97 or $499). The reason is that shoppers associate this odd figure with the lower rounded number—for example, if a customer sees an item priced at $4.97, their brain will tell them it’s closer to $4 than $5. And this theory is backed up by evidence: an experiment conducted by researchers at the University of Chicago found that women were 40 per cent more likely to purchase a dress for $49 despite being offered cheaper options at rounded price points. While the ubiquity of this marketing strategy makes it a hard tactic to avoid, customers should remember that this type of pricing only distracts them from understanding the real cost of an item.
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Prestige pricing
The opposite of charm pricing or decoy pricing or deceptive discount pricing, prestige pricing operates on the assumption that shoppers will be more likely to buy an item if the price is higher, regardless of the actual production costs or quality of the product itself. While it sounds counterintuitive, this pricing strategy works for well-known and high-end brands, from car makers to designer labels who know that the consumer is really shelling out for the brand value rather than the item itself. In fact, luxury retailers take their brand value so seriously that last year, companies Burberry, Louis Vuitton and Richemont were roundly criticized for purposely destroying unsold luxury goods to avoid having to sell them at a discount and thereby diminishing their brand value. It’s recommended that shoppers think clearly and carefully about what it is that they’re actually paying for when considering purchasing a high-end luxury product at full price, because that ‘full price’ is likely more inflated than it should be.
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Mail-in rebates
Companies love enticing customers to buy their products with the promise of a mail-in rebate—that is, cash back for proof of payment sent through the mail. Often that rebate can cover up to 80 per cent of the cost of the product itself, making this a tempting proposition. However, according to Consumer Affairs , rebates totalling over US$500 million are unclaimed every year, due to the rebate process being confusing and overly complicated for the customer, or the customer simply forgetting to send in their proof of payment. When considering purchasing a product, it’s very rarely useful to factor in a potential rebate as a reason to buy.
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False scarcity
“Limited time only!” and “While supplies last” are age-old marketing buzzwords to suggest that if a customer wants an item, they better “act fast” lest they miss out on this “exclusive offer!”. Marketers take advantage of customers in myriad ways when they employ this strategy: according to Marketing Land , the scarcity mindset is one in which consumers are willing to accept anything, stating, “A person who is suffering from a scarcity mindset is more likely to buy a crappy car, get what he or she needs from a shady e-commerce site and buy low-quality merchandise.” The scarcity mindset also makes consumers focus on desire, rather than what they currently have. Teaching oneself to avoid the scarcity mindset trap will help reduce unwanted, impulse
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Greenwashing
In this day and age, it’s important that brands and companies hold themselves accountable for their contribution to climate change through the manufacturing and distribution process. But what is less helpful and more effective for selling products is “greenwashing,” when companies make false or exaggerated claims about the environmental sustainability of their products. This ranges from a bottled water company touting their new “Eco-Shape” bottle design or an automaker advertising a “clean diesel” engine , to more innocuous claims that a product is “natural,” “non-toxic,” or “eco-friendly” without sufficient evidence to back up those descriptors. And sustainability sells—a global online study from Nielsen found that 51 per cent of baby boomers and 72 per cent of Gen Z respondents were willing to pay more for products from sustainable brands. They should just make sure these brands are putting their money where their mouth is.
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Woke-washing
Just as more companies are marketing their products to appear more environmentally friendly than they are, brands are increasingly taking up political positions in their campaigns—often without backing up their inspirational statements with sufficient action. Some movements embraced by companies include LGBTQ+ rights, the body positivity movement, and the Me Too campaign. When Nike launched their 30th-anniversary “Just Do It” campaign featuring the controversial football player and civil rights activist Colin Kaepernick last year, it made US$6 billion from the campaign (swiftly drawing attention away from their infamously exploitative labour practices ). While some companies genuinely practise what they preach, it’s too easy for others to boost sales by aligning themselves with social causes: a 2017 study from Cone Communications reported that 87 per cent of consumers will spend based on values. But whether or not the values that companies purport to hold are demonstrated through their practices is incumbent on the consumer to suss out.
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Celebrity endorsements
Consumers are much more likely to remember a product that has been endorsed by a celebrity. In fact, as Farris Marketing reports , sales go up by an average of four per cent when a product is associated with a famous face. However, it helps to be wary of celebrity endorsements for a reason beyond gaining a critical understanding of how companies try to sell products: the Better Business Bureau has found that many shady companies online use fake celebrity endorsements to push their products and create the illusion of legitimacy.
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Offering free trials
Companies offering continual products or services (such as subscription boxes, streaming entertainment services and more) are increasingly hooking new customers in with the promise of a free trial. Though they won’t bill you for this free trial, they may request your credit card information in case you wish to continue the service. As tempting as it sounds, often these companies will make it very difficult to actually quit the service, or allow the trial end date to pass without notifying the purchaser. In fact, the investigative study by the Better Business Bureau found that many free trials actually come at a heavy cost to the customer by burying hidden information behind links and making it difficult for the customer to contact the seller, eventually becoming “subscription traps.” The study also reported that losses associated with this type of fraud totalled over US$1.3 billion over the past 10 years.
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One-click ordering
One-click ordering was introduced by Amazon in 1999 as a means of collecting credit card information, addresses and consumer preference data from customers to push more products and curb what marketers called “cart abandonment.” Studies have shown that almost 70 per cent of shoppers abandon their carts at checkout, citing reasons such as a complicated checkout process, high shipping fees, and having to create a profile. Close to 60 per cent of shoppers reported abandoning their carts because they were simply not ready to buy. One-click ordering streamlines the checkout process, and readily supplies the customer card information so that customers can complete the transaction so quickly that they don’t even have time to consider whether or not they were ready to buy in the first place. Nobody likes laborious checkout processes, but they do make it easier to think clearly about whether or not you need the item in the first place.
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Product bundling
Product bundling is no new thing to either consumers or sellers: everything, from fast food to video games, has been sold in bundles for so long, it’s now expected. However, depending on the transparency of the prices and the bundled items themselves, this strategy could end up costing buyers more money for services or items they didn’t want to begin with. Strategists have found that bundling more often favours the sellers , particularly when the bundle is priced at a higher cost than the value of its individual items. Buyers will also feel the pinch when a variety of items for one tidy price is offered even though only one or two of those items will be used (which is often the case when it comes to computer programs or video games). When looking into bundled items, customers should always request a cost breakdown of the individual items or consider how much mileage they’re likely to get from the products offered in the bundle.
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Snobby staff
When it comes to luxury shopping, projecting an air of snobbishness can actually help boost sales. Research from the University of British Columbia found that customers who encountered rude behaviour at high-end shops were more willing to make a purchase and had an increased desire to associate with the brand. However, the same positive impressions were more likely to fade quickly over time: customers who were initially more willing to purchase after a snobby interaction reported feeling a “significantly diminished desire” for the same company two weeks later.
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Clever packaging
Who among us hasn’t been compelled to buy something based on the item’s sleek, beautiful packaging? From stylish vodka bottles to purposefully gaudy-looking discount groceries , effective package design can kickstart a spontaneous urge to buy. Experts estimate that 60 to 70 per cent of buying decisions are made in-store, so it’s important for brands to quickly convey not just the product they’re selling but also the feelings that they want the consumer to associate with the product. As for consumers, making informed purchasing decisions and being able to see through the labels to evaluate the true value of a product will yield higher savings in the long run.
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