Month: February 2006

Zac at ortholog.com writes about an experimental test of buying irrationality using Ebay. Quoting:

Test auctions on eBay showed that most people prefer to pay a low price for an item and also pay postage (American: "shipping") than pay a higher price and get free postage, even when the former added up to more than the latter. A CD for $5+$6 postage is preferred to a CD for $10+freepost. It wasn’t presented as that stark a choice: multiple auctions with different price-postage ratios revealed a net preference for low item price and a poor correlation between auction success and stated postage costs. Interesting but hardly surprising: the salience of the price is greater than the cost of shipping (the anchoring cognitive fallacy), and people in general are not as rational or systematic as they/we believe.

(Zac’s links. read the full post here)

In Influence, Cialdini highlights scarcity as one of the six principle factors of persuasion. In an auction they combine particularly strongly: scarcity of time (the item is only on sale for a limited period), scarity of product (items are sold individually, not just as one-of-many ‘off the shelf’) and competition (from other buyers). Add to this heady mix the price/postage sleight of hand and it is no wonder you get choice irrationalities.

Influence by Robert Cialdini is an excellent, excellent, book. Not only does it present voluminous evidence on the social psychology of persuasion and compliance, but it does succinctly and engagingly, mixing academic references with historical vignettes and personal anecdotes. The book discuss how techniques of persuasion work, grouping them under six major headings, and for each heading the book provides a ‘defence against’ section detailing how to stop yourself being unduly influenced. The final, glorious, touch is that in order to write the book Cialdini – who is a professor of social psychology – engaged in a three-year project of going undercover to explore first-hand how techniques of persuasion are used in the real world: applying for a waiter’s job to study how to increase customers’ tipping, attending tupperware parties, going on training programmes with door-to-door salesmen…it makes the book a wonderful blend of thorough research and astutely observed practice.

The book has been extensively and excellently summarised here, at happening-here.blogspot.com, so I’m just going to pull out some particularly fun examples of persuasion techniques, particularly as the relate to advertising and marketing.

Notes on Cialdini, R.B. (2001). Influence: Science and Practice. Forth Edition. Allyn & Bacon

A key idea is that we all use various cognitive ‘shortcuts’ (heuristics) we use to decide on what to buy. Advertisers can take advantage of these short-cuts to skew our behaviour. For example, there is a price-as-an-indicator-of-quality heurstic which means, if we’re not thinking carefully about a purchase decision, we might just use the assumption that ‚Äúbetter things are more expensive‚Äù, so if we want a ‘better’ thing we will just look at the prices to work out which product is better.

[Chivas Regal Scotch Whiskey] “had been a struggling brand until its managers decided to raise its price to a level far above its competitors. Sales skyrocketed, even though nothing was changed in the product itself (Aaker, 1991)” [1]

Or the coupons-give-you-a-bargain heuristic:

“A tire company found that mailed-out coupons which, because of a printing error, offered no savings top recipients produced just as much customers response as did error-free coupons that offered substantial savings” [2]

It’s easy enough to think of other common examples – supermarkets which use three for the price of two offers, or put up signs saying things like “Two for ¬£1”. Next time you see one of these check the price for how much just one costs – it might stem your enthusiasm for the seeming bargain you thought you were being offered

Here’s another trick, which takes advantage of another natural inclination – that of sticking by our word. Cialdini accuses toy producers of undersupplying stores with ‘craze’ toys just before Christmas – after a barrage of advertising parents promise their kids the toy but then can’t get hold of one. They buy them a substitute at Christmas and then also have to buy the craze toy in January. He cites the example of the Cabbage Patch Kids, dolls which were heavily advertised one year in the mid-1980s, and undersupplied during the holiday season. $25 toys were selling at auction for $700. (A charge was later brought against company for advertising something that was unavailable). In 1988, a spokesperson for Hasbo, which made the Furby toy (which also sold out at Christmas), advised parents to say I’ll try, but if I can’t get it for you now, I’ll get it for you later [3]

The same consistency principle lies behind the advice an encyclopaedia company gives during its sales-program: make the customs fill out the sales agreements themselves. Once they’ve ‘owned’ the action by doing it themselves they are far more likely to stick by it. (“There is something magical about writing things down” says Amway Corporation literature). Cialdini explains the popularity (with companies) of testimonial contests ‚Äì those where you think of 50 words why the product is good and stand a chance of winning something. The contest is not for the company to get a single winning entry, but for them to induce all the entrants of the competition to enhance their commitment to the product by writing a testimonial. Influence has an extended discussion of this, and how the power of small, initial, public voluntary actions can be used to produce later compliance to much larger requests for action

“Commitment decisions, even erroneous ones, have a tendency to be self-perpetuating because they can ‘grow their own legs'”
(page 97)

“You can use small commitments to manipulate a person’s self-image; you can use them to turn citizens into “public servants”, prospects into “customers”, prisoners into “collaborators.” And once you’ve got a man’s self-image where you want it, he should comply naturally with a whole range of your requests that are consistent with this view of himself”.
(page 74)

“…compliance professionals love commitments that produce inner change. First, that change is not just specific to the situation where it first occurred; it covers a whole range of related situations, too. Second, the effects of the change are lasting. So, once a man has been induced to take action that shifts his self-image to that of, let’s say, a public spirited citizen [or a guru’s disciple], he is likely to be public-spirited in a variety of other circumstances where his compliance may also be desired, and he is likely to continue his public-spirited behavior for as long as his new self-image holds.”
(page 84)

Social proof (social influence) is another extremely strong heuristic: “if everyone else is doing it, I should do it to”

This too can be used unfairly – for example Evangelist Billy Graham has been known to ‘seed’ visits to towns in advance so that his arrival is met an outpouring of thousands of the faithful – apparently spontaneous, but actually highly organised. (p 101)

Positive association is also a powerful, and potentially automatic (see also) decision -shortcut

In one study, men who saw a new-car ad that included a seductive young woman model rated the car as faster, more appealing, more expensive-looking, and better designed than did men who viewed the same ad without the model. Yet when asked later, the men refused to believe that the presence of the young woman had influenced their judgments. [4]

The same kind of, automatic associations, lie behind findings that people leave larger tips if paying by credit card (credit cards associated with big spending, not always with paying back) and that “that when asked to contribute to charity (the United Way), college students were markedly more likely to give money if the room they were in contained MasterCard insignias than if it did not (87 percent verses 33 percent).” (p164). Funnily enough this didn’t hold for people with troubled credit histories!

Cialdini is quite clear that we can’t avoid using these short-cuts – after all they work most of the time – but we must come down hard on those who exploit them

“The pace of modern life demands that we frequently use shortcuts” (p. 234)

“We are likely to use these lone cues when we don’t have the inclination, time, energy, or cognitive resources to undertake a complete analysis of the situation. When we are rushed, stressed, uncertain, indifferent, distracted or fatigue, we tend to focus less on the information available to us. When making decisions under these circumstances, we often revert to the rather primitive but necessary single-piece-of-good-evidence approach.” (p235)

“The real treachery, and what we cannot tolerate, is any attempt to make a profit in a way that threatens the reliability of our shortcuts” (p. 239)

I don’t know how realistic this kind of individual/consumer vigilance is as a strategy, but Cialdini seems to believe that the only alternative is to change the whole pace of modern life

The evidence suggests that the ever-accelerating pace and informational crush of modern life will make this particular form of unthinking compliance [shortcuts] more and more prevalent in the future (introduction, p. x.)

My default assumption used to be that the careless use of decision heuristics probably only applies to unimportant decisions. This took quite a severe knock from Cialdini’s discussion on the social-contagion of suicide [5]. If people can be influenced by publicity about a suicide to kill themselves (and all the evidence is that they are – and social proof is one of Cialdini’s six discussed shortcuts), then all of the decisions we make in life are open to be exploited by irrational factors under the control of others.

Refs below the fold

Continue reading “Influence (by Robert Cialdini)”