When I was about ten years old, my mom and I ran into a problem at the ski area where were skiing. This problem was 100% the fault of the ski area and was the result of what might be called incompetence. We had to go to some office and ask for help. The person in front of us was screaming at the customer service rep who stonewalled him until he left upset. My mother walked up and said "I’m sorry, but I have problem and I’m wondering if you can help me." The surly customer service rep who resisted the screams of the previous guest said "What’s the problem?" and then proceeded to go out of her way to fix it. Not only did we leave happy, but the employee was happy too.

As we left, my mother gave me a lesson that has resulted in me getting my way more times than I can count in the intervening 36 years. She said "Most people naturally want to help you and the trick is to make that easy for them. You can always yell later, but you start with a yell, you can never take it back."

Sometimes, though, it’s just satisfying to yell, even when you know it’s not in anybody’s best interest. I did it yesterday for the first time in a very long time. I’m still trying to decide whether or not it felt good.

The cover of Robert Cialdini’s book Influence: The Psychology of Persuasion is adorned with a quote that says "For marketers, this book is among the most important books written in the last ten years." That’s probably true, but it’s a little troubling that there is no quote that says "For consumers, this book is among the most important books written in the last then years." In many ways, Cialdini is writing for consumers, not marketers. Each chapter discusses a "weapon of influence", the way it is used against us and finish with a subsection called "How to Say No" (to this particular "weapon of influence"). I think every reader will recognize each weapon, will feel that you already know that is used against you, and will eventually think of a situation where, even with that knowledge, you got sucked in.

Read how we get sucked into reciprocal relationships unknowingly » »

We as humans tend to key on contrast and judge value by the relationship of one thing to another. If we can find a comparable, we always do. The way Starbucks got us to buy $4 cups of coffee (er, you, anyway, since I have never bought a coffee a Starbucks, but I have bought a double chocolate cream frappucino) was to make the experience difficult to compare to Dunkin Donuts. Euro-style tables, funny names, funky music, soft lighting, all contributed to an ambiance sufficiently different to make the comparison difficult. Tough economic times, have made people more willing to see coffee as coffee and refuse to pay for the experience (that and, of course, the fact that the Starbucks experience has become mundane itself, just like Dunkin’ Donuts).

We all know that from personal experience, but I have been seeing it a lot more clearly since reading Dan Ariely’s fun book Predictably Irrational: The Hidden Forces That Shape Our Decisions and the interesting, though a bit more stodgy Robert Cialdini book Influence: The Psychology of Persuasion. So here’s where it gets interesting. Savvy marketers know that we judge value by contrast and relationship. So the Economist offers subscriptions for the following rates (or did when Ariely did his study):

1. $59 for the online-only subscription.
2. $125 for the print-only subscription.
3. $125 for the print and online subscription combined.

What’s going on there? Why even bother to offer option 2? Simple. It isn’t clear which is the better deal between $59 for the online subscription or $125 for the print subscription, but there’s no question which is the better deal between the print-only and the print and online option. Because of that and because those two are obviously comparable — different offers at the same cost — we key in on those two options. When Ariely showed the offer to MBA students at MIT, only 16% went for the online-only subscription, none went for the print-only option and a whopping 84% signed on for the combo. The deal was too good to pass up. But, and this is where it gets really really interesting, what if you eliminate the print-only subscription? After all, not a single person wants it anyway, so it’s not really an important part of the offer, right? Well when he offered only two choices, the online version and the combo (options 1 and 3 in other words) to MBA students, with no “decoy” offer, 68% opted for the internet-only option. So in other words, by focusing the comparison on the $125 option, they shifted from a measly 32% willing to pony up $125 to a whopping 84%. That’s the power of contrast! We are just not wired as humans to think in absolutes, which is usually a good shortcut as historically, evolutionarily (and in most life-threatening situations) we have very few choices and choosing quickly has advantages. In the modern marketplace, though, it’s a different story.

Cialdini has all sorts of examples where the contrast principle is used to influence our decisions. Brunswick pool tables instructed salesmen to start by showing the most expensive pool tables “just to see what the high-end features are” and then bring people down the price ladder. Result: a big increase in the amount people were willing to spend because the mid-range tables now seemed cheap. Some clothing retailer figured out that if a man comes in to buy a suit, always sell the suit first and the accessories second. After making the big purchase, what’s another $20 for a tie? But if they choose the tie first, they’ll go for the $10 tie instead.

This is also why discounts, coupons, MSRPs on cars that nobody pays, and “$97 value, yours for only $27″ work even if nobody in the history of humanity would consider paying $97 for the piece of junk that really isn’t even worth $27. Even though in our rational mind we know with certitude that the list prices are absurd and nobody pays them, they anchor us on high prices and we compare the sales price to the high price put in our mind because we are wired to compare. This is so subtle and so powerful that if you simply ask people what the last two digits of their social security number are, this will actually influence how much they are willing to pay for something later. Those with higher numbers are actually willing to pay more because the higher number is still stuck in their mind and that provides the mental anchor at that moment. In the absence of a meaningful comparison, they are simply comparing the last two numbers they have heard and that makes a price seem reasonable or unreasonable depending on what has become set as their anchor.

So as a consumer, you need to really think about what comparisons you make implicitly, without thinking about it. And as a merchant, of course, you need to think about what comparisons your customer is making.

Quick test: you are about to ask someone for a favor or to give you something. What’s the magic word?

Without hesitation any child can tell you that it’s please. But in fact there is another magic word. Consider this study reported in Robert Cialdini’s book Influence: The Psychology of Persuasion (p. 4). People standing in line were asked in three different ways whether or not the person asking the question could cut in line. Here is the question, followed by the response rate in each case.

Frankly, I find it sort of surprising that 94% of the people said yes to because I’m in a rush which is barely a reason ("I’m in a rush because my plane leaves in one hour and I need to get this copied before I get to the airport" is a reason). But the amazing thing is that there’s such a huge difference between no because at all and one that adds no information whatsoever (obviously the person wanted to make copies).

It occurred to me that I should subtitle pages "Please read this because I wrote it" as in "The Magic Word (please read this because I wrote it)."

Before applying for research grants to fund my dissertation, I came across one of the most helpful pieces of advice that I’ve ever read. It can be applied beyond grant applications I’m sure, but I took this advice and nailed down a Fullbright and, even more difficult to get, a Châteaubriand. There’s a lot that goes into a good grant proposal, such as showing that you’ve done your background research, that you have thought through the feasibility of the whole thing, that you’ve demonstrated that you have the skills, knowledge and contacts to pull it off and that the grant itself is essential for doing so.

But then comes the question of why and the authors pointed out that this is a common stumbling block, though it never should be (that is, you might have trouble proving feasibility, because that’s the nature of fresh research, but you should never be at a loss as to why finding an answer would be worth it). I’ve since had a chance to read several grant proposals and surprisingly, this is often where the applications fail. It’s not uncommon to see applicants who give a reason for their study that is no reason at all. Exampe:

Reason: “This has never been done before”
Objection 1: Maybe that’s because it’s impossible.
Objection 2: Maybe because it’s uninteresting.

In any case, the fact that something has never been studied before doesn’t mean it should and certainly not that I should give you money to do it. Also, the reasons you want grant money are not necessarily the reasons you deserve grant money and you always need to know which is which.