There’s a common assumption in economic and investment theory about the “rational market” and the “rational investor…”
The longer I pay attention, the more I know that those assumptions — while useful in creating fictitious models of the world that have some limited applicability in the real world — are absolutely, totally, profoundly WRONG.
All human beings are really, really irrational.
The only difference is between people who don’t know it (most people, including some very “intelligent” people)…
And people who do…
I’ve actually loved this about being in direct marketing…
I didn’t get my degree in psychology because I ever had a fantasy I’d become a professional psychologist. I really didn’t think about it.
I got my degree in psychology because I was fascinated with how our minds work. Why we think what we think, and why we do what we do.
Just yesterday, I talked about the math of marketing. I guess today is the behavioral psychology of marketing.
What I love about direct marketing is how revealing it can be about how our thoughts and emotions work — measured by how they influence our customer behavior.
For example, if you visit a landing page on a website, and there’s a picture of a person, they can be looking, generally, in one of three directions.
— They can be looking toward you, the reader…
— They can be looking toward the text on the page…
— They can be looking away from you and away from the text on the page…
What’s absolutely fascinating is that regardless of the product, regardless of the text on page, regardless of so many things… Just this one little detail about which direction the picture is facing will change your behavior as a visitor of the webpage.
I can bet with a good level of certainty that the person facing away from you and away from the text on the page will give the lowest level of response. This “posture” conveys little interest in either you, the reader, or the message. Which subconsciously tells you that you don’t need to be interested, either.
This is completely irrational — and, at extremes, could cause you NOT to buy a product that could dramatically improve your life, at an incredible bargain of a price. All the rational arguments on the page could line up, and this irrational subconscious trigger could kill the sale.
A picture where the person is looking toward the text on the page — maybe the headline, or an important point — signifies that the text is important. In general, you, the reader, will look where the person’s eyes are looking. Readership will tend to be highest with this picture.
A picture where the person is looking off the page, at you, will establish trust. The fact that they make “eye contact” (even though they’re a picture) gives credibility. It won’t necessarily drive readership, but it won’t hurt it dramatically either. This perspective is really great for testimonial images, or images of the spokesperson of an ad or marketing piece. It has the least impact when it’s a generic stock image in the ad.
These are all subconscious, instantaneous, and completely irrational judgments you make.
But in marketing tests, they represent the general trend.
This is human irrationality at work! And there are countless examples…
I was talking a while back to a copywriter who was having client challenges. (Trying to maintain some anonymity here!)
The client was under a ton of pressure to meet a certain sales goal, by a certain deadline.
And if there’s anything we learn from putting deadlines on offers in marketing, is that they change behavior. Often, in a limited-time promotion, the biggest sales days are the first day the offer is announced, and the last day it’s available. A common distribution across a 2-week sales is 25% of sales on the first day, 25% on the last, and 50% spread out over all the rest of the days. Sometimes it’s even more pronounced.
This is completely irrational. We rationalize it to ourselves, if we’re under the grip of the deadline. But it’s irrational. You COULD respond in the middle, and get the same deal. But the odds are you’ll either respond on the first or last day.
RATIONAL buyer behavior might have a spike at the beginning, when people are first introduced to the offer. But it would be less pronounced, because people would spend more time thinking about it, and weighing the cost and benefits of action. And there would be almost no uptick at the deadline, because people would have already made their rational decision and purchased.
But people aren’t rational. And that’s what was going on with this copywriter and their client.
The client was freaking out. And instead of doing the rational thing of focusing on how best to reach the best prospects, with the best offer… They were running around like a chicken with its head cut off, going in 56 different directions, and changing expectations on the copywriter 10X a day.
And here was the most challenging part. The copywriter was doing all the right things to try to serve the client. At least, all the rational right things. But the more rational the copywriter was, the more the client seemed to be freaking out.
I told the copywriter it wasn’t their fault — it was actually the client’s.
The client didn’t see how the deadline was causing them to change their behavior. They blamed things not going right on the copywriter.
Even though the copywriter was doing everything they could to keep up with the client.
This client was wrong, because of their irrationality — but the copywriter couldn’t tell them that…
At least not so directly.
What I recommended was that the copywriter meet the client where they were at emotionally.
Recognize and acknowledge the pressure. Affirm their anxiety about the looming deadline.
This is meeting your market at its point of greatest pain — and is a hugely valuable copywriting principle.
Then, bring the conversation around in a productive way.
Without chiding them too harshly, explain that the best way that that goal will be met is to make sure they stay focused on the original plan. Make sure they’re getting in front of that best prospects, with the best offer, and nurturing their decision making process.
If someone is not a qualified prospect, they could keep following up with them into the future, but don’t put undue pressure on a bad prospect to respond by the deadline — or that prospect will NEVER buy.
Explain that the goal will never be met by letting the anxiety push you in 56 directions, never pushing any initiative through to conclusion.
In short, meet the client at their irrationality, and bring them around to their rationality.
Or — worded another way, in line with an old selling and marketing principle — lead with emotion, justify with logic.
Here’s another illustration of this irrationality at work…
This is from the book Thinking Fast and Slow, by Daniel Kahneman, which I now believe deserves a spot among the MUST READ books for marketers (because it scientifically documents a huge number of these quirks of irrationality)…
Let’s say we were going to bet on a coin flip.
There’s a 50/50 chance it comes up heads or tails.
If it comes up heads, you have to pay me $100. If it comes up tails, I have to pay you $101.
Would you take the bet?
Should you rationally take the bet?
The rational reason you should take the bet is because if you take this bet enough times, you come out ahead.
You’re going to lose 50% of the time, and win 50% of the time. But every time you win, you go up by another $1.
But our irrationality feels the pain of loss more than the pleasure of gain.
Let me repeat that.
Our irrationality feels the pain of loss more than the pleasure of gain.
In fact, research into these bets suggests we feel the pain of loss about twice as strong as the pleasure of gain.
Meaning, if I wanted you to take that bet, I’d have to offer you $200 for every $100 you could lose.
(This is why fear, used the right way, can be one of the most powerful selling tools there is.)
I’m already late to hit publish, so I’m going to wrap up with a recommendation.
Get the book Thinking Fast and Slow. Just do it. And then, dig in. Mark up pages. Take notes. Make sure you thoroughly understand it.
Then, try to apply it to all areas of your life.
Including making more rational decisions yourself. And, as long as you’re acting in an ethical and honorable manner selling products that will enrich your customers’ lives, find ways to tap these quirks of decision making to help your prospects make decisions to buy what you’re selling.
I don’t mark things MUST READ lightly. This one deserves it because it’s a total breakthrough.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets