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Are your customers followers of the herd or addicted to scarcity?

Are your customers followers of the herd or addicted to scarcity?

“Thaw with her gentle persuasion is more powerful than Thor with his hammer. The one melts; the other breaks into pieces.” – Henry David Thoreau

Persuasion is an old and powerful strategy. Aristotle thought about persuasion. The goal of persuasion is to change someone's attitudes or behaviour. Much has been written on this topic, and of course, it is also of great interest to marketing and selling.

Since the time Aristotle first thought about this topic, neuromarketing has shed new light into the dark and provides new answers as to why certain persuasion strategies work with some consumers, and others don’t. You may have experienced yourself that one type of call to action or piece of communication has worked for your competitor, but didn’t work for your brand? Or it worked for your brand in one context, but not in another?

The answer lies in understanding who your target audience is for a particular message and which subconscious motives determine their behavior.

Let me give you two examples of persuasion strategies that have proven to work with two distinct audiences/target groups: scarcity and social proof (following the herd).

The power of scarcity

Scarcity is the very powerful principle of artificial shortage. The less there are, the more desirable and precious things tend to seem. So drawing attention to the limited amount of stock that is left, time limitations or barriers of accessibility will increase the perceived value of a product or service and make the customer want to hunt it down. This is most prevalent with a customer type that is intrinsically motivated by success, status, power and challenge. They are called Performer types. 

By way of example, booking.com uses this kind of persuasion extensively. Not only is the site visitor always aware of how many other hunters are looking at the prey (‘there are four people looking at this hotel’), with the last one striking ‘two minutes ago’, they also tell you that the hotel is likely to sell out soon, and indicate the limited amount of rooms left.

 

Source: booking.com

If there was such a thing as the ‘buy button’ in the brain – this is as close as it gets to pushing it with the Performer. Different case studies showed that this can often result in a double digit increase of click-to-cart conversion (Sources: Neuromarketing Congress Munich 2012, Neuro Retail revolution Amsterdam 2013).

Luxury retailers also make use of this principle, although often in a more subtle way. Land Rover, for example, advertises limited edition ranges, some of the most premium fashion designers only provide price ‘on enquiry’ and the hottest nightclubs create scarcity and desirability by creating barriers of accessibility and filtering would-be patrons.

While some consumer personality types get turned off by this, even scared, the Performer gets intrigued and by all means available tries to get a small piece of the pie and belong to the club.

The power of social proof

Thirty-four per cent of Australian consumers have an emphasised drive for safety, reassurance and risk-avoidance. The neuro-scientifically established limbic® consumer personality type model calls them the Harmonisers. These consumers are particularly on the lookout for social proof. Underlying this is the principle of social desirability, meaning that humans tend to observe and imitate the behaviour of other humans and are strongly influenced by what others do, like or recommend. Nevertheless, this is true for some more than for others. The personality type Harmoniser especially seeks to conform, fit in and thereby obtain social reassurance.

So when communicating to the herd-driven Harmoniser you should not only incorporate ranking, rating and commentary functions, but also place them on an appropriate, prominent spot on the website that will provide the user with the necessary reassurance from others.

Booking.com also uses this principle extensively, where consumer endorsements, rankings and popular choices are incorporated.

 

Source: booking.com

But as for persuasion – less is more. Consumers have different persuasion profiles and understanding their underlying motivators is critical to deploy strategies that will work.

Katharina Kuehn is director of RDG Insights. She specialises in providing retailers and brands with the missing link between understanding the real drivers of consumer behaviours and informing the strategic branding and operational implications at the point of sale. 

 

Katharina Kuehn

Neuromarketing

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Katharina Kuehn is director of RDG Insights and one of Australia's leading neuromarketing strategists, specialising in neuromarketing insights and their implications for retail and consumer brands.
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