Do you think that your customers patronize you because your price is right? Have you been made to believe that giving constant coupons and discounts is a sign that your products are top quality and better than other brands? Consumers have various theories about what the market and marketing is all about. Some would tell you that when the price of a product is low, then that product is of low quality. On the other hand, some would claim that they had a poor deal when the price of a product is high while others would also claim that a high price means that product has a high quality. Advertising and marketing can influence customers for good or bad. Halcyon/Flickr.comThese are naïve theories, consumer research experts tell us, but they are the wont of the market. Because of these myriad of thoughts in the mind of your customer it is important that sellers, marketers and advertisers be careful when trying to influence the public.
If you try to influence your customers using price, your strategy would backfire based on labeling. If you tried using label and people influence, your strategy might backfire based on price or even the perception of that particular product in the market, which perception has been created by another company who must wield huge influence in the market.
Bias cues shape perception.
Hmm! That makes the work of marketers and consumers difficult, not so? It is difficult for marketers because they want you to buy the products they have on sale. It is difficult for consumers because they do not make decisions based on their thinking, but also on their budget and the perception of others.
These factors are what consumer researchers call “bias cues”, or attributes that help shape consumer perception and buying decisions. Bias cues could be price-, label- or quality-based. These cues could be correctly interpreted by the market, such as when consumers believe that low prices for a product is a signal of low quality. They could also be incorrectly interpreted by the market, such as when they believe that the high price of some orange juice with an attractive label is a signal of high quality. To make matters even more interesting, these bias cues could be meaningless at best. Have you ever wondered why companies decorate children’s shoes with shining lights? So, what theory do marketers and consumers work with? As for consumers, they have a variety of deceptive naïve theories about prices and products and can deceive any marketer who attempts to deliver a product message based on consumer perception.
Yet, some marketers have developed workable rules of practice.
Be careful when trying to influence their perception.
Some marketers have found that consumers might think a product is expensive when it is grouped with other expensive products. This is called the discrimination mentality and is evident when setting prices. Your customers might either discriminate on the price of a product when they make general inferences about that product because it is grouped amongst similar but expensive products. AdvertThese set of customers are usually ill-informed about the product quality or reputation and depend on this sort of categorization. On the other hand, some customers will ignore this categorization and concentrate on the salient features of a product even when grouped with expensive and similar products because they have a little more knowledge about the product, especially where similar brands are well known. Marketers should be careful when setting prices based on categorizations else they end up being accused of deceptive practices by customers.
It has also been found that people perceive or think a product is expensive if a relative or friend buys it cheap. On the other hand, if a stranger or someone distant to them buys it cheap, they might believe the product is cheap and maybe a good deal than if they had bought it themselves. What this means to marketers is that influencing consumers perception of your product quality and price through relatives or friends might really backfire.
The market has also found that because you have a higher knowledge about the market than consumers, you can deceive them by tweaking their perception of a product. consumers cannot be deceived twice. If a marketing gimmick can successfully make consumers think that a low-priced product is of high quality when it is not, they can learn from their mistakes when making repeat purchases. Keep that in mind when trying to influence your consumers. Decorating children shoes with colorful lights or other meaningless cues that excite emotions can give you sales today, but if you fail to meet their expectations, your marketing might eventually backfire.
As a rule: do not depend on consumer perceptions or their naïve beliefs about market prices and product quality as a guide in marketing your products.
Stop press: The worst deception is giving your customers reward that they would not need, or that are useless to them. I received one recently. After buying a popular brand of toothpaste here in Nigeria, I discovered that I was rewarded with a toothbrush which use caused pain to my gums. What humanity!
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Even when experts search for apples on a tree, it takes some effort. flickr.com;hikingartist.com
Learning is a lifelong process; that is why you are reading this article. It might involve learning a foreign language, a new recipe, another trade or line of business, or starting out as an entrepreneur. Learning experiences do not always have to be new. Old hands can learn new tricks. On the other hand, you can pick out a novice from an expert based on how they chose to learn.
We seek new knowledge because we want to improve, to do the same old things in better ways. That implies a selective process; the ability to pick out the useful material from the clutter. All this is done based on experience. The more experienced you are, the easier it is to pick out the relevant information from the unnecessary. This is what distinguishes novices from experts. Novices chose information that enhance their broad knowledge, while experts seek to deepen or specialize in a knowledge area.
Different prices for novices and experts.
This difference between how novices and experts chose to increase their knowledge is the reason why seeking out new knowledge involves different costs. It is just like when seeking out the news. The general news costs differently from specific niche news, especially in the academic arena. This is because when one starts out, his selective picking ability involves very little costs. A novice usually picks from generally available cheap news sources, believing that in doing so, he could stumble upon useful finds. In short, a novice does not yet face the costs of what he is seeking. That is why new general knowledge, or knowledge that covers broad aspects, usually costs lesser than new specialized knowledge.
As for an expert, he is experienced in seeking out knowledge, understands the costs of doing so and picks out the best quality news source. Furthermore, an expert does not just select anything; an expert selects new knowledge only from a chosen area and is blind to other areas.
And so were discounts and coupons born. Without these buying incentives, novices will find it costlier seeking out new knowledge and products. AdvertDiscounts and coupons make a novice stop searching, so he does not spend more for search. Experts understand the market better. Discounts and coupons do not influence their buying decisions, rather quality of information and products usually do.
Search engines exist so you do not spend more searching for quality.
Another way to filter novices from experts is in the quality of products or information they seek. Some say you can tell a man’s education if he reads the New York Times, and his financial literacy if he finds the Wall Street Journal boring. Publishers who cater to experts know that their information and products are of higher quality, and hence price these higher than mundane and general purpose products whose quality require much more advertising signals. Some sellers even sell two types of products: one for the novice, and another for the expert. I see these most often when I visit a flea market. Mass produced clothing is of different quality than customized clothing because the latter caters to the tastes of experts and fashion connoisseurs.
Let’s take a man who searches for a job that pays highly. Because of the status of the job, he spends more in searching for it and in order to be successful, he spends more in acquiring the needed knowledge to find the job. If he is averse to spending on finding a job, then he’d have to settle for one of lower status. That is what I want you to remember: if you desire information and products of high quality, it is often wise to seek the opinion of experts, else you’d be a novice playing in the field of experts and could be hoodwinked to take a low quality product for high.
There is then a high incentive to shop around because of the difference between high and low quality products and services. To solve this problem, search engines like google, amazon, yahoo and bing exist. If you go to websites like wirefly with search facilities for electronic accessories, especially mobile phones and smart phones, you’d have to possess higher knowledge than a novice. You do not necessarily have to be an expert, but you should be adept and should be able to find your way around the universe of phones.
Even when we love seeking out new knowledge, sometimes we do prefer sticking to our favorites, to the brands and news sources that we have come to trust, whether we be experts or novices. Eventually, every knowledge becomes favorite or disfavored. Keep that in mind as you go shopping.
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The Memphis, Tennessee based company FedEx (NYSE: FDX) has been making the headlines. The news includes plans to reduce staff through buyouts, a classic example of how to do customer service after a Youtube video sent customers the wrong message and plans to increase the FedEx Ground distribution centers.
Positioned as the second largest package carrier in the market
FedEx (NYSE: FDX), founded by its CEO, Fred Smith, provides a broad array of services including e-commerce, transportation and business services as it competes to seamlessly deliver packages without delays. The company operates through four major segments – FedEx Express, FedEx Ground, FedEx Freight and FedEx Services. It is now placed at #109 on the S&P500 which position Bank of New York Mellon Corp (NYSE: BK) lost on November, 29th, 2012.
The company employs roughly 146,000 persons worldwide, with two-thirds in the U.S and is placed second worldwide, after USPS, in the market for package shipping, whether online or offline. Due to the dynamics of the market situation, where it is necessary for FedEx to move towards easier means of reaching the customer, it has had to partner with several companies which include Planet Soho, an ecosystem for small businesses to flourish. In partnership with Planet Soho, it offers customers discount rates that are close to 30%, online and at more than 1,900 FedEx Office retail locations across the U.S and Canada when a customer makes use of the Planet Soho Membership Card. In partnership with American Express, FedEx is also re-launching the invite-only My FedEx Rewards and My FedEx Office rewards programs. These two programs are powered by LoyaltyEdge from American Express. The LoyaltyEdge service will help FedEx enhance and expand its customer loyalty service programs.
Although along with UPS, it intends increasing its shipping rates starting January 7, 2013 for ground and home delivery, by an average of 4.9%, these increase is reflected in the major distribution center expansions that are being undertaken across the U.S especially in Roseville, California and Hagerstown, Washington county, Maryland. It proposes building a new 200,000-square-foot distribution center at Roseville in order to boost its package volume capacity and increase speed and service capabilities of the FedEx Ground network.
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FedEx employees work extremely hard to make sure packages arrive on time. The company has forecasted that a record high of 280 million shipments will move through the global FedEx networks during the weeks between Thanksgiving and Christmas. On “Green Monday”, December 10, an estimated 10 million packages must have been delivered by FedEx.
Service delivery doesn’t come without some drama.
American football is at the heart of the American Sports scene. FedEx is also part of the action. She is the Official Delivery Service Sponsor of the NFL, Super Bowl and Pro Bowl, FedEx is proud to sponsor the 10th annual Air & Ground NFL Players of the Week program. FedEx also hosts a Golf tournament, the PGA Tour FedEx cup championship. FedEx is on record at the American Red Cross site to be amongst the Fortune500 companies that actively supported the Red Cross during rescue operations post-Hurricane Sandy that rocked the East coast states of America.
According www.sfist.com, a Redwood City man was accused of a failed attempt to ship three kilos of methamphetamine and 100 grams of cocaine through a FedEx store in Redwood City, both packages worth around $250, 000. Although the man pleaded not guilty, the case is amongst many that underscore the challenges package shippers face in their line of business. Theft is also an ill wind that afflicts package delivery such that it is often wise for households to be alert for when a package will be delivered to their homes. It is often the case that packages delivered on the front steps can be taken in a matter of seconds. Whose fault is it? Package delivery companies do all they can not to be sued for carelessness or missing packages. According to www.sfgate.com, Ismail Aliyev, a former FedEx driver in Utah was fired for federal trucking violations, that an Iowa court had found him guilty. Ismail sued FedEx though because he claimed his sack was because of his “Russian accent.”
How would a company amongst the Fortune500 handle a Youtube video of a FedEx courier tossing a customer’s package over a fence?
This video which initially caused a public uproar eventually was used by FedEx for excellent customer service and crisis management.
FedEx handling of the Youtube video event was a textbook example of crisis management. The handling of the public uproar over the video made it to emerge as one of the most admired companies in the U.S in a survey conducted by Forbes.
To cap the corporate focus, starting next year, FedEx (NYSE: FDX) will be offering its employees the opportunity of up to two years’ pay to leave the company. Employees who volunteer for the program will receive four weeks of pay for every year of service. This is part of a restructuring effort to cut down operating expenses through staff restructuring. After the restructuring announcement, it was reported that company shares rose 65 cents to $88.78 in afternoon trading of that day.
Money, if you ask an economist, is a medium of exchange. Without money, you’d get to eat only what you plant in your backyard. When a lady friend told me how many yams she had harvested from her small farm, I failed short of telling her that without money, she would be confined to roasting the yam on a charcoal fire and eating it without salt and oil.
Indeed, money is central to our lives. It is our measure of wealth. Not only that, it is also a factor for measuring personal performance, interpersonal relations and helping behavior. Money will continue to be like that.
Title Picture
Cash Money Milliionaire! Credit: Flickr.com, Dust Mason.
Have you noticed that people want to live their lives, not thinking about or being reminded of money? If you want to sell yourself, or sell a product, make sure that you or your product possess the quality and quantity that is requisite before you start reminding them of money. They will rebel against you if you do so. Really, people dislike being reminded of money. It makes them think of you as an authority and the likelihood that they might lose their freedom. The concept that rich people should help poor people has not stood on its feet. If you or your product does not possess the qualities that can make it stand on its own, is not an authority in that area, then remind them of other social values. Otherwise, if the reverse if the case, if you ask them to perform tasks for you, they will follow your suggestions to the letter but will keep a distance when it comes to interpersonal relationships. Also, when you need help, it might be slow in coming.
In a series of studies, the authors found that reminders of money caused consumers to think more abstractly and focus on the primary features of a product instead of its secondary features. Also, they are more likely to evaluate a new product based on its brand name instead of its individual features. The authors found that reminders of money can also influence consumer’s decision making.
Why lemons do not remind people of money.
The reason for the above is that money is symbolic. It is linked to social resources such as security, status, power, confidence and freedom. People with lots of money and who flaunt it around usually send signals of confidence and strength and have better ability of exerting their influence on others. But money also has been used to dominate others.
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Another research found that reminding people of money makes them think of their freedom. Therefore, it has the ability to affect interpersonal communication, advertising and marketing. Therefore, people tend to rebel against someone who, whenever a conversation comes up, always reminds people of money. They feel insecure, weak and insignificant. So, don’t be surprised if you do not sell on the personal front or your products do not sell well because you keep reminding them of money.
Due to the symbolic nature of money, many are ready to marry for the sake of money. They are not marrying for love but for security, for the sake of acquiring societal status. Sometimes, against conventional wisdom.
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Sometimes at the risk of their personal happiness. When you remind them of money, they remember the sacrifice they made against other social values and would treat you badly if you are not a peer in monetary terms. That is the power of money. Money can inspire for good or bad.
So, when next you want to use money and reminders of your wealth as a sort of defense, think of what you would lose: your friends, social contacts and true love and affection from people, and weigh these against what you are likely to gain: power over people’s lives, the ability to make them do what you want.
Chose! Which is more worth it? Do choose wisely.
(Related Post:Forming blind trust for a pretty face might be influenced by gestures and nonverbal cues.)
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Money not at stake? Most people say the truth. Credit: Flickr, linkogecko.
Do you know that when doing business with people, if you push them into a corner, they usually lie? Sometimes, these are persons who pride themselves on honesty and integrity. Most people do not want to lose their money or their investment, so when nothing of material value is at stake, people always tend to tell the truth. It is unbelievable, but that is the truth. There are people who take their conscience as something more precious than all the gold in the world and would never lie even if they have the opportunity to do so. Why is it like that, in this materialistic world, where money is everyone’s concern?
We teach our children from infancy that it is wrong to lie. Yet, we find ourselves lying. This could be wrong, but people do it because what is materially at stake, either money or reputation, is considered much more important than whether one told a lie or not. David Xu, assistant professor in the W. Frank Barton School of Business at Wichita State University found that when tempted with cash rewards, people are wont to lie when giving reports through text messaging than if asked face-to-face. Also, they are more likely to lie if asked to give a report through text messaging or face-to-face than if asked to make the report through an audio chat or video recording.
What David Xu’s research found out was corroborated by two psychological scientists, Advert
Shaul Shavi of the University of Amsterdam and Ori Eldar and Yoella Bereby-Meyer of Ben-Gurion University of the Negev that when something is at stake, if you push people into a corner, they will usually or are more likely to lie. To make them tell the truth when money or something of value is involved, give them more time. Also, you need to make them feel that they are in control of the situation and not being harassed or rushed to make a report.
It’s all about self-interest and justification.
It has been discovered that what is at play is that people have the first instinct to protect themselves, or to serve their own self-interest. Secondly, when they think it is justifiable, they are likely to lie although they know it is wrong, especially when they believe it was done for the common good. It was further discovered that when rushed, or prompted to act quickly, they tend to lie or bend ethical rules, in order to come out ahead of others. If they have more time to deliberate on an issue, they usually tend to tell the truth with a clause: when nothing is at stake. If something is at stake, they want to favor themselves and would even lie to do so.
You get it now?
So, where you want to choose a referee or judge for a case, give him all the time in the world and make sure he has no interest or stake in the matter at hand. Justice will always be served.
Where you want your employees to go out and make profits for the company, no matter the cost, give them no time, put them in a corner and tell them that their job is at stake. They’ll bend all the rules in the book to make that profit.
It is left for you to decide whether you want to tell a lie or not, but always remember, there is nothing like saying the truth. The truth will not only set you free, it gives you the experience needed to solving problems and overcoming obstacles.
(Related post:Don't expect your friends to cover-up for you, if they will lose something of value, 1 and 2.)
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While doing business, reaching conclusions or meeting strangers, if one is tempted to resort to snap decisions that can influence the outcome of the interaction, he could end up being unfair and biased.
Take some Scenarios:
We tend to believe that wealth is everything; that money can buy its way into anything. It can even buy judgment and love.
The watch you set on alarm doesn’t work as expected. It should have rung at the expected time. You conclude immediately that it was a fake.
Concluding that a well-dressed man coming out of a Rolls Royce who looked ready for business owns the car.
Biases come about when we depend on intuition
Title Picture:
No prejudice among matches. Credit: Flickr.com, szeretlek_ma
When under severe time pressure, in a situation of information overload or when under acute danger, when conscious analysis of the situation may be difficult or impossible, or due to over-reliance on technology, we are tempted to make snap judgments and take decisions that depend on experience and not on verifiable, provable facts. We are relying on “gut feelings.” It is not unusual to instantly hate a person you met for the first time because your body wanted you to do so. It is difficult sometimes to explain why an investment is not right, but you just believe that investing in a stock is not right. These gut feelings are real and should be taken seriously.
They come about because one is drawing on past experiences and non-verbal cues to make a decision. Furthermore, the decision is not deliberated upon, since there is little time, so that one relies on what “he thinks,” or that he or she “knew it all along.” How often have you felt that a political strategy would lose the elections, even when the polls were not conclusive, because “you knew it would happen?”
Our frailties and complexes could affect this unconscious decision making and influence us detrimentally. If you feel bad about yourself, you are more likely to show bias against people who are different. This is because it makes you feel better about yourself when you stereotype or prejudice against others. According to Jeffrey Sherman and Thomas Allen of the University of California, Davis, when we feel bad about ourselves, we can denigrate other people and that makes us feel better about ourselves.
Traps to look out for
It is important that we know our biases are at work when we judge people by their faces, their environment or some other criteria. We should also be careful not to judge other people by standards we have set for ourselves. Confusion and conflict could be the end result. People tend to be different. Situations can change. We could be influenced by our moods. It is difficult to predict an outcome at a moment of intense time pressure or because it is difficult to prove it. Predicting people takes more than snap decisions.
In an age when we rely on statistics, trends and technology, we could fall into this trap without realizing it. We could feel that we did know it all along when the charts show a trend on some stock when actually we didn’t know it all along. Hindsight bias is a decision trap that can influence and impact our success in various domains, including medical diagnoses, accounting and auditing decisions, athletic competitions and even political strategy.
Friendship is a human social need. It is a part of what makes us alive. That is why wherever human societies thrive, the need to return favors, to give something back when someone has extended favors, is a principle we imbibe in our children. This principle is called reciprocity. It is the principle that Jesus was enunciating when he told his disciples that “there is more in giving than in receiving.”
More interestingly, humans do not show any bias in giving. We can give for infinite reasons, and sometimes, to complete strangers who have done nothing for us in the past, just because we feel happy doing so.
On the other hand, what would you do if a friend, because he has been covering up for you, suddenly asks you to lie for him in the office when he discovers that a crime he committed might be discovered? Would you reciprocate his past favors, and lie, so that he does not get punished?
Avoid getting used for the sake of friendship.
We might reason that for friendship, we can stand up for our friends. It might be no big deal to lie for friendship, because everyone does it to grease the friendship ego. On the other hand, where the crime is a grave offense that breaches a major company policy, then such friendship is put under the mirror. As humans, where you sense foul play, that an individual is trying to use you to maximize his own benefits at the office, you get disappointed. According to some researchers, reciprocal giving amongst humans is a natural benefit maximizing exchange. This need makes us to extend ourselves for strangers without counting past favors before extending help to them.
How disappointing it would be if someone, disguising as a friend, decides to commit a crime with the hope that you would cover his back, and a criminal offense at that? Many persons have faced this situation. Because they decided to stick for what is right, they lost a friend. They’d rather not be a lying friend. What would you have done?
The devil is in their smile. Credit: Flickr.com, Mathew_Roberts
Well, most times, where returning favors for a friend would result in a loss, whether of reputation or prestige, never expect them to cover up for you. You will surely get disappointed. Be careful also that you do not jeopardize your future by willfully committing crimes.
Past favors might be useless when the chips are down.
Never count on your friends covering up for your crime if they cannot vouch for your past actions. That would be foremost on their minds. Be ready to face the consequences. If your trust level is not that highly ranked, you will surely get disappointed when your own friend hands you over to the police. Never even expect your supposed friend to lie for you in the office if his reputation is at stake. He built that reputation with the sweat of his teeth. Your friendship would count for nothing. You might be taking a huge risk counting on them. He might dissociate from your friendship, calling you a deceptive person, or classing you as someone of low integrity, who from the starting blocks was not worthy of his friendship.
Friendship takes account of past favors if a loss is in view. Has your history in the office being above board? Is this crime something you could not avoid, maybe because your wife just gave birth and you needed the money badly for hospital bills, or for some other emergency? If you want to have the back of your friends, make sure they do not feel they are going to lose anything by helping you out. Make sure that you have built up a history of standing up for them in the past; doing so, you would be putting money into a bank account. If you really need them to lie for you, which no one encourages, you should make sure that the trouble you are faced with was committed because you were trying to do something proper and dignified, and was beset with unforeseen circumstances such that the crime that was committed was humanely possible for anyone in such-same situation.
That does not mean that they would lie for you. It would only help to make them comfortable with being your friends. Do not allow them to think you are deceptive and manipulative; you would be committing another crime. Propriety has more value than friendship.
No one wants to be a criminal by association.
It is an ugly habit to lie. On the other hand, we are ready to lie to cover up small mistakes. But do you know that small mistakes can build up to a habit that you fall into a pattern of lying because a friend knows your weak spot? Never think of lying as an option. If you have to tell a lie, make sure you believe that it is for the common good, both for your friendship and for the profit of the company that employed both of you. Ask yourself why that friend had to wait until the possibility of being exposed exists before he made you aware of the crime? It is a terrible thing to be in a manipulative relationship.
Always remember that any crime, whether minor or major, could make you get prosecuted. So, be very careful. Do not hoodwink yourself about friendship such that you have to suffer for a crime. Many persons have found themselves disappointed when their friends would have no part in their crime.
While we never pray that our friends make us criminals by association, it is important that if a friend is in the habit of asking for small favors in order to cover up his or her back, you should reconsider that friendship. He could be setting the stage for something major; you could end up the fall guy. Always insist on truthfulness. The truth will set you free, both at the office and for the sake of friendship.
In the second part of this blog series on office lies, I will be writing on why you should not count on your friends lying for a crime committed if they thought the crime helped you gain a little material advantage.
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