Articles Tagged with: Marketing Science

Josie Natori: Filipino Fashion Trailblazer

“I just don’t like to settle. Good enough is never good enough.” – Josie Natori

Josephina Almeda Cruz, also known in fashion circles as Josie Natori, is considered one of the most outstanding women business owners in the Philippines. This Filipino-American entrepreneur runs The Natori Company, an international women’s fashion brand. Her products retail in the U.S.’s most prominent department stores, including Saks Fifth Avenue, Bloomingdales, and Neiman Marcus. Her products are available worldwide today through her brand’s website

All in the family

Josie grew up in a matriarchal society surrounded by her close-knit Filipino kin. “Women are encouraged to be entrepreneurs,” Josie says of her family. This encouragement stayed with her throughout her life. Even when she was a child, her grandmother would remind her that she should never be in a position where she had to depend on anyone. This upbringing gave her the motivation and inspiration to start her own business.

When she was younger, Josie didn’t plan to enter the fashion industry. Artistically talented and naturally inclined to play the piano, Josie performed in a solo concert with the Manila Philharmonic Orchestra. She was only 9 years old. At 17, she left for New York and pursued an economics degree from Manhattanville College. 

From banking to fashion

After graduation, Josie embarked on a career in banking. Eventually, she became the first female vice president of investment banking at Merrill Lynch. There, she met and married Ken Natori, a fellow executive in the banking world. She then gave birth to her son Kenneth Jr. in 1976,

The following year, Josie found herself looking for new challenges and wanting to start her own business. Before entering the fashion industry, Josie opened several different ventures, from a McDonald’s franchise to a carwash.

Josie’s namesake company began when she brought an embroidered garment from the Philippines to a buyer in Bloomingdales. The buyer advised her to turn it into a sleep shirt; the rest was history.

In the early years of The Natori Company, many of Josie’s friends and relatives pitched in to help her make her vision a reality. For example, an uncle pitched in to sew labels onto clothes. Other family members once gathered to help make a small trim cut on a special order of a thousand blouses. In 1985, Josie convinced her husband, who was still working on Wall Street, to help run her growing business. He became chairman of The Natori Company.

An international empire

More than four decades later, The Natori Company has transformed into a lifestyle brand that includes popular lingerie collections, ready-to-wear apparel, home items, eyewear, and fragrance. Aside from being the founder of an internationally successful fashion business, Josie works to give back to society. She sits on the board of several organizations, including the Asian Cultural Council and the Fashion and Design Council of the Philippines. Her factory in the Philippines handles over 60% of her company’s production and employs 500 workers.

Josie Natori is an admirable example of a woman who pursued her dreams and achieved success with the help of family and friends. From a single sleep shirt, she has built an international empire now seen as one of the world’s top lifestyle brands. “Now, as the company grows, we grow our sensibility too, taking our concept and making it a whole world. As we say here, Natori is ‘where life meets art,’” she shared.

Sacred Fire Creative honors visionary women who forged their own path to success in this #WomenWhoMatter series. If you see yourself as a visionary, who wants to create a lasting, positive impact on your community, come work with us.


The “White Bear Problem”: How to Control Your Thoughts, According to Science

Imagine this scenario. Your boss chose you to make a vital presentation at a very important client meeting on Zoom. You’ve prepared for this meeting – did your research, created your slides, wrote your notes, and ensured the stability of your internet connection.

But as the time for the meeting approaches, you become so nervous that the sound of your rapid heartbeat drowns your thoughts. You tell yourself not to be nervous in an effort to calm yourself.

What do you think happens next?

More likely than not, you’ve been in similar situations before. You’d know that no matter how hard you suppress your nervousness, the feeling remains. In fact, the more you tamp it down, the more anxious you get.

Why is that? Why is it hard to get a thought out of your head once it’s made its way in?

This dilemma is called the “white bear problem.”

Russian author Fyodor Dostoevsky once wrote in 1863: “Try to pose for yourself this task: not to think of a polar bear, and you will see that the cursed thing will come to mind every minute.”

This quote became the basis of the ironic process theory, also known as the “white bear problem.” It states that the harder you clamp down a thought, the more frequently and the more intensely this thought will come up in your mind. Social psychologist and Harvard professor Daniel Wegner developed this theory.

According to Dr. Wegner, when you tell yourself to avoid thinking of something, a part of your mind does comply. But, at the same time, another part of your mind checks that you’re not thinking of this forbidden thought and will do so continually.

This constant checking ironically forces you to think the thought you wanted to drive away in the first place.

You can overcome your “white bear” with these strategies.

Having white bears pop up in your head every now and then can be frustrating and irritating. It can also lead you to make decisions you may come to regret.

So, how do you get rid of these white bears once and for all? Dr. Wegner offered a few strategies:

Focus on something else.

You can get rid of your white bears by distracting yourself with a more entertaining or gratifying thought. In the example above, instead of zeroing in on how nervous you are, you can focus on how grateful you are that your boss chose you to make the presentation.

Relax.

You’re more likely to have unwanted thoughts drifting in your mind when you’re mentally bogged down. So, try to relax whenever you can. Watch TV, read a book, work on your hobbies, have fun. Better yet, seek help or delegate a task when you’re feeling overwhelmed.

Put it off.

Sometimes, an unwanted thought simply won’t go away. In that case, schedule a time for thinking this thought as much as your mind wants to. Make sure you set a time limit for it, say, 15 or 30 minutes. Then your white bear won’t pop up as much throughout the day.

Practice mindfulness.

Mindfulness practices like meditation can strengthen your mind and give you better control over your thoughts.

Unwanted thoughts can float into your brain whether you like it or not. But no matter how big or intense your white bear problem is, you can always make it go away.

Sacred Fire Creative is a digital marketing agency that positions itself as a force for good. Work with us and create a positive and lasting impact on your digital tribe.


7 Digital Marketing Trends Your Business Needs to Adopt Today

Digital marketing is constantly changing and evolving. Marketing practices that you found effective a couple of years ago may not work so well for your business today. That’s why you need to keep a close watch on the latest digital marketing trends and see how you can apply them to your business.

And speaking of the latest digital marketing trends, here are seven that you may find helpful in growing your enterprise.

1. Mobile-first web design

Thanks to the proliferation of smartphones, mobile search has already overtaken desktop search. So you can reach and engage your customers more readily, you need to make your website’s design more mobile-friendly.

Having a mobile-first website design has many other advantages. One such benefit is they load more quickly. Faster loading times can boost search engine rankings. Another is they’re cheaper to develop than apps. Plus, you can readily integrate smartphone features like camera and voice detection with a mobile-optimized website.

2. Hyper-local optimization

While it’s nice to have customers from other states or even other countries, you’re likely to find your most reliable clients locally. People always search for the best services nearest them. So, you don’t need to cast your net far and wide to catch new customers – just hyper-localize.

Optimizing your website for hyper-local search means making sure your potential clients within your area can find you. The easiest way to do this is by creating a Google My Business profile. Or you can come up with a marketing campaign targeting your own neighborhood.

3. Automation tools

Who has the time to manually send personalized newsletters, chase after abandoned shopping carts, answer DMs, or post on social media? Not you, if you’re a business owner. The time you allot for these marketing tasks is best spent elsewhere.

Of course, this doesn’t mean you have to set aside these tasks. They’re still vital to your business, after all. Instead of attending to them yourself, you can use automation tools, such as social media schedulers, chatbots, and email services. These tools can save you a lot of time and give you more space for other tasks that require your attention.

4. Interactive content

User engagement is a vital digital marketing metric you need to pay attention to. The more engaged your visitors are, the more likely you’ll excite them and get them to buy your product. Interactive content is one way to boost your user engagement.

Examples of interactive content are surveys and quizzes. Mini-games are another. These are great for educating your potential clients on your products, reducing your website’s bounce rate, and leading your customers to the next step in the buying process. They also provide your visitors with a reason to return to your website. You can also use them to learn more about your visitors.

5. Voice search

Have you ever used Siri, Alexa, Cortana, or Google Assistant to search for things online? You’re not alone. Voice search is becoming one of the more powerful digital marketing trends out there. And it won’t go away any time soon.

Highly optimized web copy with the right keywords is essential to voice search. Imagine your content as a response to questions people throw at their voice assistants – for example, “Hey Siri, where’s the nearest hardware store?”

6. Video marketing

Showing is always more effective than telling. And when it comes to showing what your products and services are all about, video marketing is highly effective. Videos are more engaging visually and emotionally, thus leading to more conversions.

There are many ways you can use video marketing. You can do a live video on Instagram, Facebook, or YouTube. You can produce stylized videos for social media. Or you can integrate personalized videos with your emails.

7. Authentic brand ambassadors

The idea of using influencers to promote products has been around for ages. And it’s still an effective marketing tactic. But you don’t need to hire a big-name influencer to talk about you anymore. That’s because people want authenticity these days, and they’re more likely to listen to brand ambassadors who are actual users of your product and whom they can relate with.

Where do you find these authentic brand ambassadors? You don’t have to look far – you can simply tap your existing loyal clients and employees. Ask them for testimonials that you both can share on social media.

Adopting these digital marketing trends can help you move your business more quickly and give it an edge over your competitors. Try these tactics today and see where they take you.

 

Sacred Fire Creative helps entrepreneurs grow their business and become a force for good using customized digital marketing strategies. Work with us today.


Customer Experience in the New Reality

We’re now living in a so-called “new normal” for more than a year because of the Covid-19 global pandemic. Each one of us experiences this new normal in different ways.

As business owners, we have to adapt how we serve our customers depending on how they live through their new normal. We are now called to shift from simply providing customer service to creating customer experience.

In this article, we answer three main questions:

  1. What is customer experience?
  2. How does a profound customer experience look like?
  3. How can small businesses offer an innovative and exceptional new-normal customer experience?

What is customer experience?

Customer experience is not the same as customer service or customer care.

Customer service is the advice or assistance a company gives its clients. On the other hand, customer care relates to how well clients are taken care of when interacting with the brand, whether through social media or other channels.

It’s important to note that individuals may not even be customers during the brand interaction.

What about customer experience? Customer experience involves every interaction between the customer and the brand at every point of contact or touchpoint.

Brands have many different touchpoints with individuals, and these cover the entire customer journey. This journey begins when someone makes their first inquiry. Moreover, it extends even after they use the product or service.

Consciously or not, customers evaluate each touchpoint with the brand. It’s how they decide whether they will continue doing business with the brand or not. This underscores the importance of customer service.

If a person has a profound customer experience with your brand, they may decide to continue doing business with you. Therefore, our ultimate goal is to create a profound customer experience for each of our clients and prospects.

Why is customer experience important?

Here’s a quote by Maya Angelou:

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

Why is this quote relevant to our discussion of customer experience?

You see, we can’t just tell people what our brand is and expect them to believe that. That’s not how it works.

Instead, how you make your customers feel is what makes the strongest impact.

Why?

People’s memories of an experience often involve emotions—how they felt at moments in time. The customer experience involves how you make your clients feel. And that’s what they will walk away with.

What you’re doing at every single touchpoint with your client is you’re creating a mini-customer experience. These mini-experiences add up. And then, all together, all of those different experiences that involve deep emotion create brand loyalty.

What are the dimensions of a customer experience?

According to Gentile, Spiller, and Noci (2007), there are six dimensions of the customer experience.

1. Sensorial dimension

The sensorial dimension addresses sight, hearing, touch, taste, and smell to arouse aesthetic pleasure, excitement, satisfaction, and a sense of beauty.

One example is that some handbag brands add a specific scent to their products. So, when they deliver any gift to their customers, the gift comes infused with their branded scent. The customer then subconsciously comes to associate the fragrance with the brand.

2. Emotional dimension

The emotional dimension generates moods, feelings, and emotions that hopefully positively influence the customer’s image and attitude toward the brand or company.

You generate this emotion. When you create a touchpoint with your customer, how do you want them to feel afterward? Do you want them to feel relieved? Enlightened? Entertained?

You’ll want to consider this question before deciding what kind of customer experience you’re creating.

3. Cognitive dimension

The cognitive dimension relates to experiences requiring thinking. It engages a customer’s creativity.

It is similar to the emotional dimension. The emotional one activates the heart, while the cognitive one stimulates the brain.

When you interact with your clients, are you activating their minds? Are they thinking, being creative, and running through their head the different scenarios and memories they have relating to this experience?

4. Pragmatic dimension

The pragmatic dimension comes from the practical art of doing something or using a product. It is the art of doing, and it involves action steps. It’s the physical part of doing something while using the product.

Any kind of unboxing belongs to the pragmatic dimension. Let’s look at unboxing an Apple product as an example.

When you open an Apple product, everything lines up just so. When you pull the box apart, you’ll see that there’s just enough space. This creates the feeling that they had taken care of every single step along the way when they made their product.

5. Lifestyle dimension

The lifestyle dimension affirms the beliefs and values shared between the brand and the customer.

When you create a brand, what happens is you’re making a set of shared beliefs and values for your brand and the customer.

For example, Apple’s “Think Different” slogan, part of Steve Jobs’ early marketing campaigns, means they want you to think beyond the ordinary. It implies that people who use Apple are out-of-the-box thinkers. They’re extraordinary; they’re “rebels.”

Disney is another example. The House of Mouse is a brand that relates to the family—its shared belief is the importance of taking care of and spending quality time with your family.

The lifestyle dimension is about confirming the values a brand shares with its customers. It’s about making people raise their hands and say, “That’s me. I identify with that.”

So, when you create customer experience, you’ll want to think about what beliefs and core values are going into your brand. Your implied values will make people who believe the same things come to you.

6. Relational dimension

The relational dimension encourages experiencing the product or service together with other people.

This is how we observe, live through, anticipate, and participate in a customer experience in a community. Some products and services are meant to be used independently and alone. And then, there are others where this relational dimension becomes extremely important.

For example, let’s say you’re going to a Disney park. The experience will vary depending on who you’re with, but you probably wouldn’t go for it on your own. People go there with their families or friends. This means the relational dimension will be crucial here.

What is a profound customer experience, then?

We mentioned earlier that our ultimate goal is to create a profound customer experience for our clients and prospects. But what exactly is a profound customer experience?

Any experience that involves ALL SIX DIMENSIONS is considered a profound experience. So, a profound customer experience engages all of the emotions and senses.

It brings you to the point of creativity, firing up your imagination. And it’s pragmatic—you’re immersed in it, you can feel and touch it, and you can use it.

It has a lifestyle component, where you feel its impact on your core values. You believe in it. And it’s relational, one that you experience in your community.

How does a profound customer experience look like?

Disney provides what is considered a great example of a profound customer experience.

The Disney guest experience

Disney is in the business of creating magic for guests to experience and remember. Walt Disney’s vision is driven by a common purpose that every member of the Disney organization is taught:

“We create happiness by providing the finest in entertainment for all ages, everywhere.”

How do they do this? Disney attracts guests of all ages, from all walks of life, and from all countries. It’s a tourist attraction for the parks’ host countries: the United States, Japan, France, China, and Hong Kong. Seven out of 10 Disney guests are likely to return to the park a second time.

When you go to one of the Disney parks, here’s what people really love and experience:

  1. The parades and the castle fireworks shows
  2. The character meet-and-greet
  3. All the different characters at live shows in the park, like Lion King and Moana.
  4. The interactive themed attractions, such as creating your own lightsaber in Savi’s Workshop, the new attraction at Star Wars: Galaxy’s Edge

Disney’s guest experience is a range of various experiences within one bigger experience. It definitely hits all of the different dimensions of a customer experience.

Moreover, Disney does it multiple times in different ways so that people can experience any part of it as much or as little as they want. This creates a deeper level of loyalty.

How does the new-normal Disney guest experience look like?

Disney closed down parks at the height of the pandemic, with some slowly reopening depending on the health crisis status in their respective countries.

As they couldn’t open in full capacity, they offered alternatives—they shifted from in-person, dynamic experiences in the park and took it all online.

#DisneyMagicMoments

Disney took advantage of their digital assets: their blogs and social media. They launched the #DisneyMagicMoments campaign and released virtual tours of the Disney parks. It was a brilliant way to be immersed and experience the parks in a digital environment.

This campaign also encouraged guests to share photos and videos they took during their Disney vacations. It got a lot of people sharing their memories. They got into reminiscing and sharing the last time they went on a Disney vacation. That way, people could still relate as a community and share their experiences.

#AdventuresatHome

Disney also launched #AdventuresatHome, a DIY at-home adventure pack that allows fans to experience Disney travel adventures at home. They produced six adventure packs featuring Montana, South Africa, the Rhone River, Iceland, Greece, and Alaska. They published those in the Disney parks blog.

Each adventure pack includes:

  1. The Disney shows to catch related to each area
  2. A recipe developed by Disney chefs that you could cook at home
  3. A simple board game with downloadable printables
  4. A high-resolution photo of beautiful scenery or landscape from the area

The Disney new-normal guest experience is genius. The company shifted quickly during the pandemic by offering something new that people could share with their families while in lockdown at home. People aren’t just reliving things they had already seen, and they weren’t just looking at their own photos from before.

The Disney online experiences are interactive and highly engaged. Moreover, they bring some relatable elements to the Disney brand. The recipe touches on different senses, and the board game touches on different dimensions. The core values are brought in—that Disney is a fun brand that you experience with your family. It has all six dimensions of the customer experience melded into one.

What about small businesses?

Obviously, Disney is a giant entity with a considerable capacity for delivering profound customer experiences. But what can small businesses offer as innovative and exceptional new-normal customer experiences?

First, as a small business owner, you should keep in mind:

  • What do your customers need and want from you?
  • What pain points can you solve? How can you delight?
  • How do you bring the customer experience to your clients safely and conveniently?

These are notable examples of how some Sacred Fire Creative small business clients shifted during the pandemic:

Asian Mint

Asian Mint is a restaurant business that serves Thai cuisine in Dallas, Texas. They were shut down right away by the pandemic, though eventually, they got to do takeout and delivery.

One of the most significant shifts they did to cope with the pandemic was offering ChefMint kits. People were at home, but they still wanted to spend quality time with their families in a restaurant setting.

The ChefMint kits made it easy to cook Thai food at home and replicate the experience of dining at Asian Mint. The ingredients were pre-packaged, the recipes were included and worded in an easy-to-follow language. The dishes can be cooked in 20 minutes or less. Anybody within the Dallas area could get these kits delivered in cooler bags. Anybody throughout the US could also order these kits with dry ingredients and recipes.

ChefMint became a way for Asian Mint to increase its outreach. It brought the Asian Mint restaurant experience into the home kitchen.

Nikky Feeding Souls

Nikky Feeding Souls is another brand from the owner of Asian Mint, Nikky Phinyawatana. Before the pandemic, she took small groups on tours of Thailand to experience the culture and cook the food. When the pandemic hit, she created her “Escape to Thailand” series, a virtual Thai cooking, culture, and travel experience. She had ChefMint kits mailed out, along with different kinds of small gifts and little notes about Thai culture. Then she wrapped up the whole experience with live webinars in group settings so that people could experience it together.

Cindy Briggs Workshops

Cindy Briggs is an internationally renowned watercolor artist. She’s been teaching art for 20 years through plein air or live, open-air workshops in places like Italy and France. She had workshops scheduled up to 2022.

With the pandemic, Cindy canceled her plein air workshops and took these workshops online. Cindy had been doing online classes before and simply expanded the workshops.

Through these online workshops, people experienced Cindy through videos, live webinars, and exclusive Facebook groups. Her students got PDF lists of everything they needed for the class and detailed video instructions they could watch on their own time from the comfort of their homes. The advantage of these videos is Cindy’s students can rewind them, speed them up, or go back to a section if they want to. And they can watch one section over and over.

In live webinars, Cindy starts a painting from scratch, and her students can paint along with her. She also gives specific feedback on work submitted through her Facebook group.s.

OMEGA Gymnastics

Gymnastics is a sport that people need to do in a gym. However, with the pandemic requiring gyms to be closed, OMEGA Gymnastics transitioned online. They did Zoom classes where their kids trained from home.

One of the things they did differently was their distance learning program. Following all Covid cleaning and distancing protocols, OMEGA opened a section of the gym for a small number of students. They could come in during the day, do their online classes, get help with homework, and get some time doing movement in the gym. Through this distance learning program, OMEGA provided students technical assistance, helped them stay focused during classes, and got them active during breaks.

 

The new normal is upon us. Our customers expect, and even demand, customer experiences that fit their perception of the new normal. It’s up to us business owners to adapt and create the experiences they’re looking for.

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What is Loss Aversion?

Let’s talk about loss aversion, why the pain of loss results in irrational decisions, and how marketers are taking advantage of this.

Loss aversion is perfectly summed up by FOMO or the Fear of Missing Out.

It’s the irrational fear of loss. In psychology, loss aversion explains why people, too often, focus on setbacks instead of gains—it explains why the pain of losing is seen to be more powerful than the pleasure of gaining something. In their Prospect Theory study, Daniel Kahneman and Amos Tversky said, “losses loom larger than gains.”

About twice as large!

What makes loss aversion so influential?

Simply put, we hate loss. Receiving something is great, sure—but we don’t love it as much as we hate losing.

If you received a $200 jacket for your birthday, you’d be happy. However, if your dog chewed a giant hole in it the next day, the unhappiness you’d feel would be twice as powerful.  

Losing something or downgrading is psychologically distressing, so we do what we can to avoid it (even if it makes absolutely no sense).

It’s not completely our fault, though. There are intense cultural, socioeconomic, and neurological factors at play when it comes to the power of loss aversion.

Loss triggers a reaction from the same part of the brain that processes fear and risk. Our brains also associate loss with prediction errors and disgust. We’re trained to detest loss.  

We’re extremely vulnerable to loss aversion when it comes to making decisions because as soon as we imagine a choice, we’re emotionally invested and attached.  

People will go to incredible lengths to avoid a perceived loss.

Example: waiting in absurdly long lines to get something for free.

In December of last year, Starbucks created a holiday-themed travel mug that you would get for free if you ordered a Grande holiday beverage. They claimed they would keep the promo going until they ran out of mugs. Nobody knew how many they had on hand, so there were lines around blocks at Starbucks stores across the country. It didn’t matter that the travel mug was valued at less than $5 and made from thin plastic. They had already latched on to the idea of getting a free holiday treat, so not receiving that mug would be considered a significant loss.

People are also likely to make purchases they weren’t necessarily planning on making if you provide them with a free shipping coupon. They’ll recognize that this opportunity doesn’t come along all time, and the thought of losing out on it will persuade them to make a purchase.  

Businesses use loss aversion marketing strategies all the time.

A perfectly executed “flash deal” is a big moneymaker. When a product is deeply discounted for a very limited time, the consumer’s brain focuses on the ticking timer and the amount of savings rather than on the product itself. You probably don’t need another sweater or another cordless vacuum cleaner—but at 70% off, that’s a GREAT deal, right? I can’t miss out on that!

It’s also why pre-orders, coupons, and VIP exclusives work. With pre-orders, it’s an early bird discount—the discount is the prize for ordering early. With coupons, it’s a lot like being given free money. Why would anyone throw free money away, right? With VIP exclusives, all you needed to get VIP status was probably to sign up for a newsletter, and voila! It’s too easy. Why risk missing out on the action?

Free trial periods show people exactly what their life would look like with the product or service, making it exponentially harder for them to end it when the trial is over. They’ve experienced the benefits and identified with that life, so they don’t want to lose it.  

Insurance companies usually have a mile-long list of extremely unfortunate things that could happen to you and how you’ll be negatively affected if you don’t have the proper coverage. No matter how unlikely these events are, they’ve successfully set you up to view them as losses, and you’re more likely to focus on those than the regular payments required to avoid them.

If your business needs to avoid giving people more than necessary, loss aversion tactics can help you sidestep that waste. Studies have shown that when options are presented as addable rather than retractable, people will only take what they want (toppings on a salad, ingredients in a sandwich, etc.).

You can maximize the effects of loss aversion marketing in your small business, too.

The success of your offer entirely depends on your messaging.

Understanding your target audience and their fears is crucial to connecting with them. You need to clearly explain what their life would be like if they don’t purchase your product or service, and they won’t care unless you speak directly to their pain points and experiences. It’s about showing them what they’ll miss out on if they don’t participate soon and painting a picture they can’t ignore.

People must believe there’s something to lose for loss aversion to work properly. If you post an offer for 20% off and claim that it’s only available for the next two days and then post a 25% off coupon the following week, you’ve given people a reason put off making their decision. Even worse, they’ll notice that you contradicted yourself, and any trust they had in you and your brand will start to fade.  

You’re working hard to convert all the “I’ll just buy it tomorrow” shoppers into “I feel good about committing to this now” shoppers. Keep that goal in mind, and you’ll notice a positive trend in your conversion rates.

How about you? How do you leverage on loss aversion? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://www.psychologytoday.com/us/blog/science-choice/201803/what-is-loss-aversion

https://www.activecampaign.com/blog/loss-aversion-marketing

https://thedecisionlab.com/biases/loss-aversion/


Have You Heard of Scarcity Marketing?

Scarcity marketing plays on the cultural trope that most people want what they can’t have. It’s not a new phenomenon—it is based on decades of psychological research and not to mention a basic economic principle.

In economics, the law of supply and demand dictates that a low supply makes something more valuable in terms of price, all things equal. It’s one of the reasons why anything that’s limited edition will be pricey.

But what makes a limited edition so attractive and in-demand?

There are many other psychological principles in play here. Some people are collectors and are motivated to purchase anything that’s limited edition. There’s also the need to be distinct from others—getting your hands on a limited edition somehow grants you bragging rights. Then there’s herd behavior—when you see other people want something, you’ll start liking it, too.

Cue #FOMO or the fear of missing out. Millennial consumers were asked if they would buy something after experiencing FOMO, and 68% of them said yes – they’d even make the purchase within a day or two.

The bottom line is that scarcity creates demand. Scarcity also creates urgency. Demand and urgency lead people to buy NOW.

The pull toward things we can’t have develops at an extremely young age.

Jack Brehm shared his findings in his book, Theory of Psychological Reactance. For his experiment, he placed two of the same toddler toys in a room. He put plexiglass around one of the toys and let the other sit out in the open. By this point, you shouldn’t be surprised that toddlers were more interested in the one with the barrier.

What are popular and compelling examples of the use of scarcity by companies?

Amazon makes it known if a product is running low in stock. Some e-commerce sites will even send you notifications if a product is selling out quickly. Whether you were almost convinced to buy the product or not, it’s suddenly a lot more desirable. When you’re taking your time to decide on a purchase, you’re passively picturing your life with the product. As soon as you know that it’s almost gone, you’re forced to quickly and intensely imagine what your life would be like if you missed out on this product. The thought of losing this chance is likely enough to make you commit.

Booking.com and Agoda.com will alert you if someone has booked the room you’ve been eyeing. They’ll also let you know how many other people are currently looking at the room you’re considering, putting the pressure on you to book it before they do.

Door Dash and other food delivery companies will send members a coupon for a specific dollar amount off an order and only make it usable for the next week. If you were on the fence about getting food delivered in the next week, chances are you’re at least going to look at the options now. But who are you kidding – you’re definitely going to order dinner from that new Thai restaurant everyone’s been talking about.

Seasonal products or limited-time items are also compelling examples of the use of scarcity in marketing. Those Starbucks fall and holiday drinks? Those are made with the scarcity principle in mind. It must work because nearly every industry has adopted a seasonal offering of some sort. Pumpkin spice deodorant, anyone?

Studies also show that the average ticket price when buying a seasonal drink is higher than buying a regular drink. Seasonal beverages are seen as special and indulgent, so people are more likely to treat themselves to another menu item while they’re at it. Holiday self-care at its finest!

Some brands use limited-time freebies to encourage purchases. Lego will release limited edition polybags and other collectibles to entice collectors to purchase on particular dates, like May the 4th for Star Wars builds. Starbucks created a limited-edition holiday travel mug that shoppers got for free when they ordered a holiday beverage, increasing their seasonal sales by even more than usual.

An e-commerce clothing company tested two versions of a product page to see which one would prompt more purchases. They’re each selling the same jacket – the only difference is that one page has an “Order within 3 hours (counting down clock), get next day delivery” message just under the “Add to Cart” button. That offer increased their sales by 226%.

Airbnb lets viewers know when they come across a “Rare Find” – that is, a space that’s so spectacular it’s usually fully booked. Mix in some social proof with that urgency, and you’ve got yourself a sale!

Let’s go over some ways for you to use scarcity marketing in your own business.

Limiting your products’ availability triggers customers to assume that these products must be far better than other ones that are readily available. In our eyes, exclusive means superior. This assumption is so strong that we can assign a quality level to a product simply by noticing its availability. This works for limited bonus products, limited sale items, limited introductory price offers, limited time for free shipping or next-day delivery offers, limited offers through a specific channel (“Order through our app in the next 24 hours for 50% off), etc.

If you consistently run sales and each one is accompanied by a “Final Hours” or “Ends Soon” message, your customers will start to catch on. They’ll notice that your warnings aren’t compelling, and their sense of urgency will disappear.

Strategy and authenticity are the keys to making scarcity marketing work for you.

How about you? How do you leverage scarcity for your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://sleeknote.com/blog/scarcity-marketing

https://sumo.com/stories/scarcity-marketing


Do You Know the Power of FREE?

Let’s talk about the power of free stuff. Why does the word FREE have such an emotional pull? What do brands get in return when they give something for free? More importantly, how can you use the power of free to your advantage?

Dan Ariely, author of Predictably Irrational (2008), showed that nothing is more motivating than getting something for free.  

He set up a table with two bowls: a bowl of Lindt Truffles that he sold for 15 cents and another bowl of Hershey’s Kisses for 1 cent. At the end of the experiment, he found that 73% of the students chose Lindt over Hershey’s. It seemed like students preferred Lindt over Hershey’s even if the cost was 15X higher.

Next, he set up two bowls again, this time selling Lindt Truffles for 14 cents while the Hershey’s Kisses were free. Guess what? 69% of the students chose Hershey’s this time.

This is the power of free or the zero-price effect, and it threatens to turn traditional cost-benefit models on their heads. These models don’t account for the fact that getting something for free has a psychological effect that trumps conventional economic theory.  

Enter behavioral economics: the umbrella term under which the power of free falls. This covers the study of economic decision-making through emotional, cognitive, psychological, social, and cultural factors.  

Why is FREE so powerful?

It’s not just a price indicator but an emotional trigger.

We tend to make decisions based on how they make us feel. Free things make us happy, and we’ll make decisions that make us happy. It sounds simple, but a decision made in the name of a free thing is often irrational.  

That’s largely due to perceived value. We place an unreasonably high value on free things merely because they’re FREE. It’s an option with no downside. There’s no risk involved. We have everything to gain and absolutely nothing to lose.  

We’ve all taken promotional shirts, pens, stickers, koozies, frisbees, bottle openers, keychains, and water bottles from companies we don’t even care about. Do we need them? No. But we felt a pull toward them – saying no didn’t feel like an option.

Surprise! It’s because they were free.  

Let’s look at an even stronger pull: free food. It’s nearly impossible to turn down free food. It doesn’t even matter if we’ve just eaten, are saving our appetite for something later, or aren’t that crazy about the food being offered. If it’s free and right in front of us, we’re likely to take it.

Most of us don’t consider time or even extra money to be lost when exchanging them for a free item or service.  

That’s why we’ll happily wait in a line for multiple hours if Starbucks is offering a free drink when, instead, we could stop by the next day, pay less than $10 for the same drink and be on our way in a matter of seconds.  

Another example is paying for additional products that we don’t need to receive free shipping. We could run out of shampoo and go to Ulta’s website to buy a new bottle but end up buying 4 because we didn’t want to pay for shipping. The shipping cost would be much less than those extra three bottles of shampoo, but we want it to be free.  

Paying for shipping feels like a waste, but paying for more products to get free shipping feels like a deal. It makes us feel like we’ve worked the system and are coming out on top.

While it may seem beneficial for companies to have free shipping minimums so that we’ll buy more to reach it, studies have shown that we’ll buy more things more often if free shipping is a constant offer.

When Amazon first started offering free shipping, they implemented it everywhere except for France but still lowered France’s shipping cost to 20 cents. Sales across the globe increased dramatically, but the sales in France stayed the same. After a while, they announced free shipping in France as well. Their sales there quickly climbed to match those of the rest of the world.  

Twenty-cent shipping wasn’t even close enough to free to be worth it to consumers.   

Lots of companies have figured out how to use the power of free to their advantage.

Various restaurants and retailers will send out freebies to people who have downloaded and made an account on their app.

Their FREE app.

They figure that you’ll come in to get your freebie and end up buying more while you’re at it. They got you into their store when you weren’t necessarily planning on it and made a sale, proving that freebie more than worth it to them.

Many restaurants also utilize a buy-one-get-one-free strategy to get us to come in and spend money. You’re excited to go in and share a discounted meal with a friend, riding the high of the free offer. The benefit for the restaurant is that you’re likely to buy more than what the coupon is for, such as drinks, appetizers, desserts, etc.  

A slightly different approach is giving away something for free that will, in turn, create a demand for something costly. Cell phone companies do this by bringing in customers with a free phone offer and then charging them for the necessary plan.  

The original user of this tactic was the founder of Gillette Razors and Blades. He was having trouble selling his disposable razor blades, so he started giving away the razor for free in various marketing partnerships with other brands. This created the demand for disposable razor blades and is what ultimately got his sales off the ground.

Increasing digital capabilities has had a significant impact on the ability to distribute free things.

Distributing free things online has little to no cost and gives businesses the freedom to reach people they would otherwise be struggling to connect with. 

This is one of the best ways for small businesses to utilize the power of free. 

Whether it’s a webinar, podcast, workshop, newsletter, or blog, small businesses can give away free things online that will gain them mass exposure at little to no cost while establishing themselves as an expert in their field.  

Especially this past year, as even more aspects of running a business have moved online, small businesses are offering free consultations. If they invest a small bit of time into sharing their expertise with a potential customer, that customer is likely to come back to them when they need a paid service.  

The key to gaining a return on these types of freebies is to provide value. 

While the FREE label will pique interest, small businesses aren’t going to gain loyal followers unless they provide a reason for them to stay.  

First, understand your ideal target audience.  

Then put yourself in their shoes and identify the type of content they would want or be interested in.  

What are their frustrations? What do they face day-to-day? Moreover, what are their aspirations?

Create your freebie around what would be useful to them and deliver a value-packed gift they can’t walk away from. Make it so beneficial to them that you and your business will occupy a part of their memory from that point on. 

Small businesses also create positivity in these difficult times by offering their free thing as a celebration.

What do people want on National Margarita Day? A free margarita! Perhaps with the purchase of an entrée.  

National Pi Day brings a flock of hungry shoppers to the internet, hoping to find deals on pizza and bakery pies. This is an excellent opportunity for a buy-one-get-one-free deal to increase business at your restaurant.

Free birthday items are another celebratory way to make someone feel special and get them into your shop.

Will some of us only pick up our free birthday treat? Yes. Will a good number of us buy other things while we’re there? Definitely.

Adding on a free item to something that has already been purchased is also an effective way to gain returning customers.

Going back to the fact that free things make us happy, you have associated yourself with that happiness. You gave us a gift that we didn’t ask for, and you made us happy.  

The other side to that strategy is that your freebie may be something that we’ve never heard of or used before. You’ve just opened our minds to a new product, increasing the chances that we’ll come back to make a purchase.  

The power of free isn’t something that should be overlooked.

There’s more than enough proof that this psychological wonder affects people everywhere.

However, it’s essential to take away that this marketing strategy shouldn’t be used to trick people into spending exorbitant amounts of money.  

Doing good business is about harnessing deep, genuine connections with people, and sneaky gimmicks will not get you there.

The best way to use this gold nugget of human behavior is to understand it, embrace it, and use it in the most ethical way possible.  

How about you? How are you harnessing the power of free? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/zero-price-effect/

https://avgjoefinance.com/power-of-free/

https://www.forentrepreneurs.com/power-of-free/

https://thedecisionlab.com/insights/business/impact-free-consumer-decision-making/

https://www.wired.com/2008/02/ff-free/


Have You Heard of Nudge Marketing?

How about the term “nudge”?  

We’re going to talk all about nudges: what they are, how they work, and how brands and businesses use them to their advantage.

The term nudge was introduced in the book Nudge (2008), written by two behavioral economists: Cass Sunstein and Richard Thaler. They have defined it as:

“A nudge, as we shall use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.”

Why are nudges effective?

Behavioral economics assumes that people’s choices involve a lot of guesswork. We tend to want to make decisions as quickly and efficiently as possible, but we never want to regret the decision we’ve made.  

A nudge is used to influence people’s behavior by making choice-making easier and seemingly less risky. It provides our brains with a shortcut, and the most we consciously notice is the feeling of being less stressed.

Nobody wants to feel forced or manipulated into making a decision, so subtle nudges with their best interests in mind will automatically make the decision-making process feel natural and smooth.

Let’s look at some of the companies that are making nudges work for them.

Companies selling software systems or anything that requires choosing a plan (Adobe, QuickBooks, Microsoft Office, etc.) will often have a banner highlighting the “Most Popular Plan.” If someone is looking at the options and don’t know what factors to focus on to make the best decision, this identification lets others do it for them.  

There’s a similar powerful persuasion in labeling a display of products as “Staff Picks,” “Editor’s Picks,” or more specifically, “Amazon’s Choice.” People are often put at ease when they see that a product made a good impression on someone else.

Subtly nudging confidence into consumers makes them more likely to make a purchase.

Discount popups are another type of effective nudge. Kate Spade’s website sometimes puts an extra discount on your screen as a popup when it senses that you’ve looked at a particular product multiple times without making a purchase. That extra incentive may be what pushes the shopper to commit.  

We’ve all experienced mind-numbing scrolling when trying to choose something to watch on Netflix or something to order from DoorDash. Sites and apps like these benefit from including a “Featured” list in a prominent place so that when viewers inevitably reach decision paralysis, they’ll have a section with fewer options and a higher perceived value. Making a decision that they’re not likely to regret will seem much easier.  

A strategy used by e-commerce sites is adding functional benefits and personality triggers to the product descriptions on their gallery page. This would be easy for small businesses to implement. Appealing to shoppers directly and as quickly as possible pulls them in, helps them feel seen, and makes their job much faster and easier.  

If you want to subtly change someone’s behavior, you can change the tools they use.

For example, some waste management companies have made recycling bins larger and garbage cans smaller to nudge people toward being more thoughtful about what they throw away. Also, giving people smaller plates at hotel buffets nudges them toward taking less food, ultimately reducing waste.

Not all nudges have a purchase as the end goal.

One of the most famous nudges is the piano stairs at the Odenplan station of the Stockholm Metro. A team transformed the stairs leading out of the station into a giant functioning keyboard. There’s a video showing commuters having fun on the stairs that went viral about a decade ago (Google “piano stairs Stockholm”).

The objective was simple: make more people take the stairs. Did they? Video footage showed that 66% more people than usual chose the stairs over the escalator!

Google has a free food benefit for their employees and found that it was making it harder for people to choose healthy options. To help improve their employees’ eating habits, they made the containers that held the sweets and snack items opaque, moved the salad to the beginning of the buffet line, and placed the sugar-free drinks at eye level in the cooler. Snacking and calorie intake were reduced by roughly 8%.

When strategizing nudges, it’s important to consider the order of the given options. People almost always prefer convenience over rationality, so it’s a great way to persuade them while making them content.

Have some fun with it!

People love friendly competition.

If your business is seeing a decline in tips and you’ve already addressed potential quality and service factors, make a game out of your tip jars. Play on peoples’ strong identification with popular conflicting sports teams and have each jar labeled and decorated for one. Or have a fun yet controversial question posted such as, “Does pineapple belong on pizza?” and have the tip jars labeled as “Yes” and “No”. Nobody is obligated to leave a tip, but it draws attention and gives an emotional incentive.  

There are a few things to consider when planning nudges for your small business.

Nudges must resonate deeply with your target audience, so you need to understand their motivations (values, interests, habits, psychological inclinations). 

If you make your nudge more about increasing your sales and less about benefiting the customer, it’s likely to backfire and decrease trust in you and your business.  

As previously mentioned, nudges should never be misleading or meant to trick people. They’ll know if they’re being pressured or manipulated, so it’s best to keep things transparent.  

If you focus on your audience’s true needs and plan your nudge marketing to ease their stress, this tactic could help you build the strong relationships needed to maintain a thriving business.

Do you have any nudge examples that you use for your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts!

Sources:

https://blog.crobox.com/article/behavioral-economics-marketing?_ga=2.173434656.2000106776.1555316919-124876615.1554128205

https://blog.crobox.com/article/nudge-marketing

https://www.convertize.com/what-is-nudge-marketing/

https://www.veeqo.com/us/blog/nudge-marketing

https://medium.com/swlh/the-7-most-creative-examples-of-habit-changing-nudges-7873ca1fff4a


What Do You Know About Social Proof?

Let’s talk about the power of social proof: why it’s important, how businesses are using it, and how you can start using it to your advantage too.

Business psychology professor Robert Cialdini coined the term “social proof” in his book Influence (1984). The concept of social proof is simple: When we don’t have enough information about something, we base our decisions on how others decide and act.

We follow the masses and feel most comfortable conforming to a group decision.

Psychologist Solomon Asch conducted a conformity experiment in 1951. Eight male college students (participants) were put in a group with two other people (influencers) who were secretly in on the experiment. Each group was shown an image of a line and then another image with three different lines. They were asked to choose which of those three lines matched the first line. The influencers always gave their answers before the participant. In 12 of the 18 trials, the influencers gave wrong answers, even though the correct answer was obvious. On the other hand, 75% of the participants gave the wrong answer as well. In the other six trials where the influencers gave the correct answer, the participant gave the wrong answer less than 1% of the time.

Asch determined that these participants followed the consensus because they wanted to fit in with the group. Some even believed that the group was better informed than they were.

Why is it essential for businesses to pay attention to the power of social proof?

Think about how we decide on which smartphone to buy. Most of us will do the research. Some will take a careful look at the specs. But not everyone will have the tech know-how to understand everything. So, we look to other people to fill in the gaps for us, such as family and friends.

If it’s a new product, you’ll probably join a forum or tech group to ask around, see what people know about it. You’ll also probably scour YouTube for review videos from the tech experts—AKA tech influencers. If they say that it’s a good product, you’ll be more likely to buy it when you get the chance.

This is why many brands work with influencers, who create content and review products. In doing so, they prime the mass market and influence them to buy the product when it gets released.

We tend to trust well-known people who have earned our confidence more than actual brands.

Let’s talk examples.

Ever wonder why restaurants have such small waiting areas inside the building? They want you to have to wait outside where people will see you. If you drive by a restaurant that has a large group of people waiting in front of it, you’re going to take a mental note that this restaurant must be fantastic. So, you’re more likely to come back to it. It’s hard to be impressed by an empty restaurant because our instinct is to assume that it must not be any good if nobody is there.

Another aspect of social proof is our want to be a part of a community. Canva plays on this with their sign-up landing page. It says, “Join over 10 million people designing on Canva.” This call to action is especially effective because it’s framed as an invitation rather than a statement. Sure, having 10 million customers is notable. However, people will want to sign up because they can join that large number of users and become part of their community.

Subaru has included a “Reviews and Awards” page on their website that shows potential buyers they’ve gone above and beyond the industry standard and have been recognized by institutions that matter. They also have a “Dear Subaru: Owner Stories” page set up like a collage. This personal touch lets customers see real people who have had wonderful experiences with Subaru.

There are stores and country clubs that use the idea of exclusivity as social proof. Whether they need a waitlist or not, they’ll use one to give the impression that their establishment is so popular and extraordinary that they must limit access.

Social proof is one of the most accessible marketing tools for small businesses.

You can utilize customer reviews in nearly every type of marketing collateral. Social media posts, blogs, sales pages, product descriptions, landing pages, and more can all immensely benefit from the addition of positive customer reviews.

People tend to check 2-3 review sites, like Yelp and Google, before deciding about a brand, so it’s best practice to get positive reviews on as many different sites as possible.

What’s even more powerful than reviews? Testimonials. These show the big picture, a whole experience rather than simply stating that a product worked. The key to great testimonials is value. The best ones address common objections and overcome them, giving viewers confidence in the product or service.

We trust authentic, peer recommendations far more than paid advertisements, so don’t be afraid to reach out to past customers for testimonials. You can create a short survey for them to take, ensuring that you get the exact information you need.

If you want to work with an influencer or a celebrity to promote your brand, finding the right match is crucial. The person you team up with will only help your conversions if your audience knows them, likes them, and trusts them. You’ll be out a lot of time and money if you choose the wrong fit.

Social media is ground zero for social proof. If you see a customer tagging you on Facebook or Instagram, acknowledge the post and share it on your feed or stories. Encourage your customers to tag you on their social media posts and reward them with engagement.

Remember that people are more likely to buy or do something when they know that other people are doing it, too.

How about you? How are you using social proof in your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://sproutsocial.com/insights/social-proof/

https://optinmonster.com/11-ways-to-use-social-proof-to-increase-your-conversions/

https://www.subaru.com/index.html


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