In this episode of Motley Fool Answers, Alison Southwick and Robert Brokamp are back with more warnings about the mind games that advertisers and retailers play on us -- and they play with extra intensity during this most profitable time of the year. Not that they're suggesting you become a Miser -- Heat or otherwise -- but they do want you to know precisely how you're being manipulated to open your wallet.
In this segment, they explain what free samples, free trials, loyalty programs and even that bit of extra personal friendliness from a local shop owner all have in common: our subconscious preference for relationships to balance.
Continue Reading Below
A full transcript follows the video.
10 stocks we like better than Wal-MartWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Wal-Mart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017The author(s) may have a position in any stocks mentioned.
This video was recorded on Dec. 12, 2017.
Alison Southwick: The third thing we're going to talk about is classic Robert Cialdini, which is reciprocity.
Robert Brokamp: Yes, the author of Influence.
Southwick: Influence: The Psychology of Persuasion. Reciprocity is the idea that we have this human need and tendency to want to give something back when something is received. We feel a sense of obligation and marketers use this in a number of different ways. I've got many different examples here, as you can see on my notes.
The first example -- a classic -- is the idea of handing out samples. Some people say that samples work because once we experience it, we become psychologically attached to it. I think a bigger part of it is that once someone gives you something -- once someone goes to the trouble of giving you this thing to try at Costco -- you're going to be more likely to be like, "Eh!" Actually, I would say at Costco I feel this less. When I go to Whole Foods and they're offering a sample [and I can tell it's the person who actually baked that shortbread, and she came all the way out here just trying to get her business off the ground], I end up buying the ten-dollar shortbread.
Another example of reciprocity is when a salesperson is overly familiar or friendly. Even if they've been nice to you, you might feel the need to buy from them. There's a funny Onion article -- I don't know if you saw it -- and the title of it was Report: Shame Of Walking Out Without Buying Anything Drives 90% of Purchases At Small Businesses .
This is so [typical] in Oldtown. The Onion article goes on: "According to our research, 90% of all transactions at independently owned shops throughout the nation -- be they bakeries, used bookstores, or one of those places that sells unusual gifts and knickknacks -- are motivated solely by the intense pangs of guilt experienced after making eye contact with the owner and realizing you'll have to walk past him or her at the register before you leave."
Another example from my sole trip holiday shopping this year is I wanted to get some fleece stretchy pants at the store. I walk in and I'm like, "Hey, do you have any fleece stretchy pants?" And she's like, "No, I don't think we do." I described what I was looking for to her and she's like, "I don't think we do, but we do have these," and she walks me over there. I was like, "Oh, I don't want these pants, but I really feel like I need to buy these stupid pants." But then I went, "No," because I had already done this research. I was like, "No, I'm not going to give into that feeling of reciprocity here."
Brokamp: Good for you!
Southwick: And I did not buy the ugly pants that she was trying to sell me. All she did was walk five feet and say, "Look at this," and I was like, "Ohhh, wow! I feel guilt."
Another example of reciprocity might be if a salesperson says he or she will give you a good deal when their manager's back is turned. A little nudgy-nudge.
Loyalty campaigns are another example of reciprocity, so I've got more key fobs than keys for loyalty programs right now. CVS, Anthropologie, etc. And perks for loyal customers through these programs include like getting a discount. Getting to shop earlier. Attend private events. Prize drawings, etc.
You might get a free report. Have you ever heard of this marketing tactic, Robert Brokamp?
Brokamp: I don't know what company you could be referring to.
Southwick: Free trials are another example of trying to play at reciprocity, like Hello Spotify [although I feel less obligated when I'm not dealing with a real human being and it's an all-online transaction and someone gives me something]. If it were a person handing me something, then I would definitely feel that guilt. I feel less online.
Brokamp: I do, too.
Engdahl: I like the random free week of XM radio that I get once in a while.
Southwick: Oh! I don't get that.
Engdahl: If it's in your car, you get it. Every once in a while, they just turn it on and they expect you to want to buy it. Usually by the time the free week is up I'm done with XM, but it's a really fun week. I like it.
Southwick: That's like when we were kids and every once in a while you would get a free week of like the premium channel. And then you would watch all the movies on HBO. The bottom line is anytime a retailer does something nice for you -- and sorry because this is going to sound really Grinchy -- know that they want something in return, but you don't have to give it.
Alison Southwick owns shares of Costco Wholesale. Robert Brokamp, CFP has no position in any of the stocks mentioned. The Motley Fool recommends Costco Wholesale and CVS Health. The Motley Fool has a disclosure policy.