Payoff by Dan Ariely

Read This Book: ‘Payoff’ by Dan Ariely (Book Review)

If you’ve ever spoken with me about books, particularly “business-type” books, one author I always mention as a must-read is Dan Ariely. As the James B. Duke Professor of Psychology and Behavioral Economics at Duke University, as well as founder and director of the Center for Advanced Hindsight, Ariely’s work on behavioral psychology has provided groundbreaking revelations and insight into the decision-making process, and the not-quite-rational way in which we make our decisions.

As a marketer (and a once-upon-a-time psychology major) I find the research into these topics particularly useful, especially when your job is to help build out strategies specifically designed to guide people to a desired outcome. After all, that’s pretty much what marketing is – using psychological principles to guide behavior and perception.
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How to use psychological principles to improve ad copy

Came across this article at Searchengineland recently, covering a few tips on how to use psychology to improve ad copy (and click through rates, etc).

It’s a pretty great little primer with some nice examples of things you can do to try to get your ad copy to become more actionable.

That said, there’s quite a bit more you can do to improve your copywriting skills to make your copy more influential. If you find topics like this interesting, check out the following books. They go into some great detail, not only on the how – but also the why.

Influence: The Psychology of Persuasion

Contagious: Why Things Catch On

Predictably Irrational


Columnist Jason Puckett explains how you can apply knowledge about human behavior to improve ad copy and increase click-through rate.

Source: How to use psychological principles to improve ad copy

Toys R Us Coupon

Coupon Psychology and Presentation Is a Subtle Art

$10 off $100? That’s stupid!

That’s what my nine-year-old son thought of the Toys R Us Coupon that came in the mail the other day – especially after I explained to him that it was $10 off $100 or more. Not just $10 of free toys.

But as I explained it to him, I started going through a dissection of the art of manipulation and psychology in how a coupon is both determined and presented. I’m pretty sure I lost his interest right around the part where he realized he didn’t have $100 so the coupon was, for him, useless … but that didn’t stop me from thinking about it all.

In my time as a marketer, I’ve obviously done my fair share of couponing. It’s just part of the world of marketing – especially when you’re selling direct to consumers. What some people don’t think about though is the amount of psychology that can go into what coupons we offer and how the offer as well as how its presented can have a tremendous impact on the business when you use the coupon to try to influence customer behavior.

The whole concept of a coupon is simple: give someone a discount so they are more inclined to purchase. At their simplest you can use them to drive traffic to your store (or increase in-store conversions) and get a boost in sales. Its why you’ll often see coupons at ends of financial quarters or other times when sales are lagging or need a last-minute boost.

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Amazon’s Trying a Fascinating Price Display Change

Earlier today I was over on Amazon, doing my daily obsessive check to see if anyone’s written any new reviews of any of my short stories or novels (I’m a writer on the side) and I noticed something pretty fascinating. The change is subtle, but it’s definitely there. Also I’m not sure if it’s a test or an a full-fledged rollout … but as minor as it may appear, Amazon has made a major change to how they are displaying product prices in search results.
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The Importance of Framing in Price and Value Proposition

One of the most important things for any marketer (or anyone with an “offer” for that matter) is to consider just how the value of their product is perceived by a potential consumer.

When we’re selling a product, price is always a question – and the way we price our products and services is a combination of the cost of what it took to produce it, along with a perceived value. That perceived value in many instances, such as to “commodity” type products (items available through multiple retailers, like Nike shoes or Pampers diapers) price is usually mostly perceived as in relation to other products in the category, and we price as such. Of course we can work on our value proposition to try to allow for some price differences through features and benefits (an organic cotton diaper obviously has a different value proposition than Pampers, for example).

This concept is often referred to as “framing” – how the price of your offer is presented, in particular in relation to other options.

But when it comes to a specific, unique product or service that you offer, and we don’t have specific “competitive product” to price against, this becomes much more nebulous. And it’s in these instances that remaining conscious of our “framing” can be most important.
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Dopamine-Rush Timed Marketing: Keeping the High Alive

Late this afternoon I was talking with our data scientist about some numbers I’d been curious about, hoping he could research them and get back to me with some findings. In particular I was looking for statistics on product usage via apps, and if we could find some metrics for how long after purchase people interact with products in-app after before they hit a tipping point where usage falls off. The hope is that by better understanding product lifecycles we’ll be able to better serve customers additional products and experiences at the point when they’ve exhausted the benefit of their previous purchase.

As I explained to him my user story, hypothesis and possible campaign strategy, I found it was remarkably easy to explain the concept of appropriately-triggered, personalized lifecycle marketing as a kind of quest to deliver a “continual high.” The basic concept is that for our product (as with many others), one of the main purposes is to help customers achieve pleasure. Whether that’s aesthetic pleasure, physical pleasure or even the pleasure of accomplishment doesn’t matter so much as the fact that pleasure is the main goal.

It is a basic tenet of our nature to continually seek out pleasure and minimize pain in our lives (yes, this is my philosophy and psychology backgrounds talking), and as such, most of the decisions we make in life are with this “maximization of pleasure” in mind. When we achieve these “pleasurable experiences” our bodies undergo a process in which they create additional dopamine, which is what gives us the highs we experience when we encounter a desirable sensation or accomplish a goal.

The problem is that, just like with drugs and alcohol, the dopamine increase is a short-lived phenomenon, and in order to continue to experience the physiological benefits of that dopamine, we have to continue to create it. It’s why games have different levels or achievements – each time you beat a level or unlock an achievement you’re given a sense of accomplishment, which can lead to pride, which leads to an increase or rush of dopamine.

Over time, however, the novelty or surprise of accomplishing the same goal begins to wane…

Over time, however, the novelty or surprise of accomplishing the same goal begins to wane, and with that reduction, the amount of dopamine is reduced as well. Think of the first time you see a movie in comparison to subsequent viewings: that first time is full of surprises, each of which can give you a chemical rush – but on later viewings you know what to expect, and since you know the story and what will happen, you lose some of the impact the next time around. Yes, you can still derive pleasure from watching Anchorman for the hundredth time, but much of that pleasure is derived from a different place. For example, Will Farrell’s ad-libbing as he warms up for the camera can give you pleasure the first time because basically comedy works on the premise of delivering something different from what would normally be expected – but when you see it several times it loses its ability to surprise us, as we’ve come to expect the on-screen behavior due to previous experiences. This doesn’t mean, however, that the jokes lose their value – they still retain some of that value even after multiple viewings because we see the joke in the context of the greater story that’s being told, and within that framing it will remain absurd – but it does lose some of its original punch. Likewise, the reason for the pleasure we experience by watching the same movie again and again is that we can receive pleasure simply by anticipating a result and seeing that result occur – a kind of “pleasure in pride.”

… message customers at the time when the high starts to wear off.

Eventually though the effects fade enough that we give up on an experience once we’ve exhausted its pleasure-causing ability, and seek out a new stimulus to give us a stronger high – and this is where understanding of customer behavior and expired perceived utility can be most important. Rather than looking at the more time-focused approaches of lifecycle marketing where you look at the time for messaging a customer based on when they are likely to physically need a new product (i.e. how long until you need new contacts or your shoes are likely to wear out) I believe it can be much more appropriate to message customers at the time when the high starts to wear off.

So, instead of sending out a promo for new shoes at the same time frame you see customers needing new shoes (say, seasonally), instead learn when the excitement of those new shoes starts to wear off. Of course this won’t work for all customers (a guy buying work boots is buying mostly for utility) but if your customer is purchasing shoes for fashion, they are much more likely to be acquiring their pleasure through the novelty of the new shoes and the responses he or she gets from others by wearing them. Once they’ve exhausted this psychological utility (i.e. no one notices them), then at that point the shoes have lost much of their actual perceived value, and that would be the time to message the customer about a hot new pair of shoes.

The same general concept can be applied across most products and services. Look at what the psychological reasoning is for wanting to acquire a product. If you’re selling records, your buyer probably wants to experience the aesthetic value of good music, and gets their dopamine rush from that. Again, that fades (and it’s why pop songs are called what they are) – so then it’s time to pump out another pop song to keep the audience engaged, rather than seeking out a new form of rush like (heaven forbid) a book.

By focusing on how customers use product, helping to increase their perceived value from that product (a topic for another post) and messaging them with the next product at the right time we can keep them engaged with our products and brands.

Remember: people will always seek out pleasure. You want to do your best to make sure that your product is the one they choose each time their pleasure starts to wane and they seek out that all-new high.