The Battle Royale: You Versus Yourself
About the author: Matt Wallaert is a behavioral psychologist and the Lead Scientist at Thrive, a free financial advisory website that helps people organize their finances and plan for the future with personalized feedback from its behavioral advisory engine. Twenty six and addicted to buying suits at Goodwill and geeking out on psychology, he lives in New York City’s Chinatown and pretends he is back in Hong Kong.
There are days when being a behavioral psychologist is utterly depressing. You think you’re smart, you think you’ve got it figured out, then you fall into the same traps that you warn other people about. Take, for example, my recent candy incident.
Our CEO really loves a particular type of gum, and in order to get him a batch, I went online to a candy warehouse. They had free shipping above $50, so naturally, I loaded up my cart with enough processed sugar to satisfy an army of third-graders and checked out.
The problem is that, since I study the tricks that marketers use to get you to buy more, I already know exactly how that $50 limit works. Shipping goes into a different mental bucket than the rest of the purchase, so getting it for free means paying one “cost” instead of two. Hence my loading up the cart.
Yet for all my understanding, I still bought the candy. Knowing it was stupid, feeling foolish, I still did it. And this isn’t an experience that is unique to people who study these things. I suspect that many well-educated consumers that read blogs great blogs like Consumerism Commentary fall prey to exactly the same tricks, even if they “know” about them. We are literally struggling with our own natural tendencies, the same tendencies that marketers exploit to get us to buy their products.
The struggle, then, becomes about both knowing and doing. As you head into the holidays and particularly Black Friday, when every marketer in the country turns their brain on overdrive, it is worth thinking about bridging that gap by using the same tools they do to trick your brain.
Take loss leaders: products that stores sell at cost or at a loss in order to get you in the door. Black Friday is filled with 6am deals designed to do just that. They know that once you’re in the store, you’ll buy more than just the LCD TV; you’ll also buy movies and stands and cables and a plethora of other items that will jack up your credit card balances. They count on the fact that you’ll spend more on other items, which makes up for the loss they take on the TV.
But you can play hardball too, using what we know about behavioral psychology to change the playing field. If the store counts on you spending more than you plan to, what if you simply leave your wallet at home? Bring only enough cash to get the item that they so nicely advertised for you, displaying the price in advance. Figure out the tax, take it in cash, leave with what you want and nothing else.
With only just enough cash, you can’t possibly walk away with something more expensive without going out to the car and driving home. And studies suggest that once you break that cycle of buying, introduce the time for reflection and thought as you go off in search of your credit card, you’re more likely to stay home with your new TV than drive back for additional merchandise you don’t need.
Stores also use these loss leading ads to lure you in with limited quantities: once they are sold out, retailers pay nothing to get you in the door. And research suggests that since you came planning to buy a TV, you’ll probably walk away with one, even if it is a more expensive version. You don’t want to waste the trip, you’re in the buying mood, and you’ve already come to view the TV you plan to buy as “yours”. So when they don’t have it, you’re left with this void to fill. A TV-sized void, and one they’d be happy to fill with another TV that is marked up and helps them make a profit.
One way to avoid this upsell is to think of the item you’re buying as specific, not just “any TV”. You can do this by pre-committing to the item. Try writing the model number or name of the specific item on the cash you plan to use, so that the money becomes tied with that purchase and isn’t transferred to another, similar item. It may feel ridiculous, but the goal here is to fight psychology with psychology: if they’re going to make you feel like you already own an item they can’t sell you, why not refuse to buy anything but that item?
You can even make them work for the sale. Stores do their best to make you stop as often as possible in the store, because every time you stop, you are exposed to new products. That’s why the space between items is so narrow: not only can they pack in more products, but two people can’t walk down the aisle at the same time. So fight back, by finding a salesperson as soon as you get in the door and asking them to take you to the item you’re looking for. Salespeople are motivated to move fast, so they’ll walk you there briskly by the shortest route and you’ll be too busy following them to start browsing around the impulse buys.
You can actually do the same thing on the way back. Inspect the item, confirm that you want it, then ask the salesperson if they can check you out. They’ll usually tell you to meet them at a register and point, so you can walk right over with them and avoid the hazards of a return trip through the store. This is particularly important because stores like to put the sale items at the back, where you have to walk through the entire store to get to them.
The key to all this, as I alluded to in the beginning of the post, is actually doing it. It is easy to read these articles and think tips are great, but never actually put them into practice. Write it down, make a plan, and tell someone what it is: public commitments may us more likely to follow through and putting effort into something makes us more likely to deliver. And of course, we know that behaviors are habit forming. What feels unnatural at the beginning gets easier with time, until with practice it becomes second-nature.
Psychologists spent a great deal of time frustrated by the fact that we can show people what they need to do to get what they want, and they still don’t manage to do it. Imagine how frustrating it is when we make the same mistakes! So make this poor researcher’s holiday and actually do what you know: save money. Avoid the pitfalls. Fight back. After all, it is your brain.
Photo credits: rochelle, et. al., valderrama
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Aura: By all means – I’d be happy to do a quick interview with you if that would be better.
Hamilton: Congrats on the lifestyle change! Using debt is important to help you build a credit score, but that just means taking the card out of the drawer once every three months or so and making a minor purchase.
Writer’s: We were laughing about this in the office the other day, actually. We work on Canal Street, which has tons of shady looking electronics stores that actually use “shady looking” as an asset. They look like the kind of place that would net you a bargain, and they always have signs for high prices that have been slashed through to lower prices. You then go in, and because it looks like someplace you could bargain, you say you want it even lower and leave happy with your bargain. Trouble is, even the price you bargained for is more than what you could have bought it at Amazon for. *grins*
This reminds me of that great book by Robert Cialdini: Persuasion. The one story I liked best was about these two old guys who sold suits. A man comes in and is getting fitted for a suit, he asks the guy how much it costs. So he yells to his partner in the store, “How much is this one?”
The reponse, “What??”
“How much for this grey suit?”
“$250!” He yells.
“What??” Struggling to hear.
“$250!” He yells again.
Then the guy turns to the customer and says “That’s $150.”
The customer, thinking he’s getting a steal, buys the suit on the spot. The price of the suit the whole time was $150 (or even less!).
The book is filled with great stuff like that and I’m curious to see what new techniques or variations exist today.
Just wanted to express my apreciation for the insightful ideas in the article. I have recently decided to entirely eliminate all debit purchases. As a result I have to plan my day to day purchases by going to the bank and withdrawing the funds needed. By implementing a cash only policy I have reduced unplanned and impulse spending by at least 90$ and created a structured limit on the remaining 10%. I have found this new strategy to be game changing and I hope someone can benefit from reading about it.
This sounds similar to the weight loss/get in shape mantra I am always telling my personal training clients. Make a plan, write it down, go public. It is the way to develop new habits and create a lifestyle change. I may reference this information in my healthy living newspaper column, it you don’t mind. Thanks for the great post.