There are a lot of marketing tricks that businesses use to drill into your brain that you you must buy their product. Being aware of these can help protect you from your subconscious mind. Of course, the flip side is that if you are business, you can use these tricks to make more sales.
- Limited Time Offer – Act now! It is designed to stop you from hemming and hawing and just make the purchase. If you snooze, you lose out on the good deal. On a completely related note, today is your last day to take advantage of CollegeAdvantage’s free $50 dollars. Act now! [Update: The deadline is extended until the 18th!]
- Limited Availability Offer – The first 100 customers get a free extra Shamwow! Well, I don’t know if that’s really true of Shamwow, but you see it all the time in those infomercials. The thing is that the infomercials are running all day and night all over the country. So pretty much everyone is going to be included in that first 100 customers. They really have no way to track it.
- Affiliate Program – This isn’t so sneaky actually. A company, like the CollegeAdvantage offer above, offers to give people a commission for bringing them sales. It’s a cheap form of marketing for the company and they figure that you’ll probably take my somewhat less biased (but probably still biased) word that they offer a good product. In the CollegeAdvantage case, I had written about them in my choosing a 529 plan far before they had an affiliate program.
- The Surprise – A Trader Joe’s near me came up with the concept of Mystery Beer which I quickly dubbed one of the best ideas ever. It was literally a sealed brown bag of a selection of microbrew beers. Oh what fun to get to the car and see what you got! It brought back the feeling of collecting baseball cards when I was little (another surprise). Can you imagine the amount of sales McDonalds gets each year from people who just want more Monopoly pieces? By the way… that brings me too…
- The Contest – This is not always used to get you buy something, but more to get you to do something. You can see that you have a chance to win $5,000 from Taco Bell for giving them feedback on your service. That’s bargain-priced market research for a company like them. To explore how this might work, I ran a contest where I asked for readers Valentine’s Day tips and a few days later, I used those tips (with proper attribution) to write Save Money on Valentine’s Day (17 Tips Inside). It was cheaper than hiring a writer and more cost effective than me spending hours trying to research it. The end product came out better too, don’t you think?
- Portion of the Proceeds go to Charity – This is one of my favorites… especially when they don’t really say what the portion is. For instance, a company that makes $45 bottles of juice, MonaVie, has created a seemingly legit charity called The MORE Project. It’s a non-profit and don’t doubt that they do good work. However, I think the charity exists more to make MonaVie seem like less of scam to potential customers. That’s not to say all charity offers are bad, Coldstone Creamery has an annual event where I believe all the proceeds aid the Make a Wish foundation. Maybe the difference is that I don’t believe Coldstone needs to give back to support their competitively-priced product while MonaVie has to pull out all the stops to get someone to pay 10x more than what you would in a store.
- The Rebate – It seems like most people know about the rebate’s sneakiness… or maybe it’s just because I’m 33 now and my crowd knows it. When I was 20 though, it got me. The rebate is effective for two reasons 1) the difficulty in filling out the required paperwork… and 2) people’s… ahem… laziness. Between the two, a lot of rebates don’t get processed something that companies call “breakage.” If you see a company put a $300 television out there with a $50 rebate, the company can expect to really get $270 in money from that television as some will pay $300 and not get the rebate and some will get the $250 price after rebate. However that $250 price sure is enticing.
- No Payments for 18 months! – This is similar to the rebate. It seems like a great deal at the time and may make you buy the product thinking that you don’t have to pay. However, if you are one day late, you get 18 months of credit card late fees tacked on. These places are assuming that some portion of the people are going to pay late, so that’s just extra money for them. Even if all that money just goes to the credit card company, the offer helps the store make more sales.
- Charging a Premium Price – This doesn’t sound like much of a business trick. However, do you think Tiffany’s jewelry is better made than other jewelry? Are their diamonds different than diamonds you can find elsewhere? Do they have magical special silver than other companies don’t? No. They simply brand themselves as a high-end seller and people start to believe that owning the product is a symbol of status. This is why you don’t see Tiffany’s sell too much at a cheap price… it would erode the premium brand (and premium price) that they’ve built up. And you can’t forget about the price-placebo effect.
- Multi-Level Marketing – This is a lot like an affiliate program, but with a bit of a twist. Instead of a company just paying people a commission to sell the product, they put a hierarchy into the system where people can actually make more money recruiting other people. They get people excited to earn millions of dollars like the few people who were early in and now at the top of the hierarchy. I’m not a fan of such systems. As a consumer, I don’t want people pitching a “get rich” opportunity, especially when I can look at the numbers and say, hmm… 99% of these people aren’t getting rich. However, from the company’s perspective this is a cheap way to not only recruit millions of salesman, but also millions of customers by convincing them to buy the product themselves.
You may note that a certain company that I mentioned above actually uses quite a few of these business tricks.
Oooh, mystery beer 6-pack?! I have to try that out! This is perfect timing too because my beer loving brothers are flying in tonight :)
It’s sadly not available at all Trader Joe’s. The one I saw it at was the Millbrae, CA one.
Not at all Trader Joe’s? Well, I’m sure we’ll check it out anyway. The fridge is currently beer free which is a horrible thing (especially when the whole family is in town).
The McDonalds Monopoly game is pure genius. Kudos to whomever came up with the idea.
As for the Taco Bell thing – I just throw these away. A pizza place where I used to live would randomly spit out requests to participate in their surveys. It must have been something in the neighborhood of 1:25 or 1:50 receipts. Participate in the survey, and you got a free small pizza, salad (topped with lots of french dressing), and a drink. That was awesome.
What do you think about the fact that network marketing is endorsed by people like Robert Kiyosaki and Donald Trump? Also, that it is now taught at Harvard?
You’re right that most people won’t get rich in network marketing. But then most people won’t get rich, period. Most businesses don’t succeed whether they are network marketing or not.
By network marketing are you talking about the affiliate marketing that I mentioned at the top (which I mentioned was not really sneaky) or the multi-level marketing at the bottom of the list (which again, I’m not a fan of).
I give Robert Kiyosaki credit for helping me think of my finances in a different way (assets vs. liabilities), but it pretty much ends there. In fact, it can often be a good idea to just do the opposite of what he says… for instance with 401k plans (http://finance.yahoo.com/expert/article/richricher/205569).
I don’t think Donald Trump has ever built a successful multi-level marketing business without using the Trump brand… (and I’m not sure he’s built one with the Trump brand).
I’d like to see more details as to what is being taught at Harvard.
Same boat here with Kiyosaki: he sucks but his book got me started with thinking about money responsibly and eventually starting a PF Blog.
Agree on that 401k article. I critiqued his article here: Kiyosaki is the Ann Coulter of Personal Finance.
Sorry, but I totally disagree. Most of the things you list are not sneaky business tricks at all. They are legitimate ways of building businesses, if there is proper disclosure and they operate with integrity. Yes, it is true that is a big if.
I didn’t say they weren’t legitimate, I just said they were sneaky. It’s legitimate to change the size of your ice cream container from a half gallon to 1.75 quarts to 1.5 quarts and charge the same price (possibly due to rising costs of ingredients). However, it’s also very sneaky (as the Baltimore Sun says here.
So don’t take my use of sneaky as illegitimate. I specifically mentioned in the first paragraph that businesses can learn from these tricks… and that I even used one for my Valentine’s Day post.
I wish I had remembered to add this one.
MLM is definitely sneaky and boreder line sketchy.
First, let me just say that mystery beer sounds like one of the best things ever. I’m not much of a drinker, but a quality microbrew served in a interesting manner sounds great. Plus, how can you resist something called ‘Mystery Beer’.
These are pretty sneaky methods, that’s for sure. The charity one in particular always gets me; unless you are planning to buy that product anyway, it’s much more efficient and helpful to the charity to give directly and cut out the middle man.
The contest tip is a perfect one. I like this idea and also going to implement in my blog. Thanks for sharing!!!
I’m with you Lazy Man, on companies that employ multi-level marketing.
A big discriminator I always use to evaluate the “goodness” of a product being pushed via MLM is to ask if said product is selling outside the network? If not (i.e., the product/service(s) are really only being sold among folks within the network) then stay far far away!
Best,
Len
Len Penzo dot Com
Hm. Come to think of it, I haven’t seen that rebate from Apple that was supposed to come for the “free” printer you have to pay upfront for.
In the “sneaky and borderline sketchy” department, rebates are right up there with MLM. I just hate rebates…they’re a nuisance and half the time you never get the money back after you’ve jumped through their hoops, anyway. It’s just another way to take your money.
I often tell sales reps who trot out a rebate as a sales gimmick that if their company could afford to give me a rebate, they can afford to sell me the product at a lower price in the store.
Regarding MLM, I work with attorneys who dedicated 6 or more years to higher education, worked 14-16 hours for the first few years to build a client base, and still work 10-12 hours a day to make about $200K. If one spends an equal amount of time on MLM they can make the same money. Everyone I have met who is making a living in MLM has dedicated every waking moment to MLM. Making big money is possible, but at a huge cost.
Yeah, but being an attorney hasn’t become nearly synonymous with being in an illegal pyramid scheme like an MLM is. Also, a successful attorney adds value to the world – a successful person in MLM essentially performs the duty of an inanimate store shelf.
The Limited Time Offer is really all about trying to force you to make a rushed decision without spending time to think it over.
These tricks are legitimate but immoral and dishonest.
Here are a few more:
1. We ran out — buy something similar.
They try to get you buy to a product they’d rather you buy by regularly running out of the product/brand that you went there looking for.
2. Wah! I gotta have it!
They offer you something then take it away. (Web sites do this all the time.) Most people would rather not get something in the first place than have it taken away.
3. Don’t list the price. (Sears does this on Land’s End clothes.)
It forces you think about how much you want it, before you know what it costs. Once you’ve decided, you’re usually willing to pay more than you otherwise would. BTW, this trick is illegal.
4. Discount only with a store credit card.
This is just a way to get your SSN, which is 100 times worse than a normal loyalty cards. They can gather information about customers across multiple businesses and use it to figure out how to raise prices.
I am not a huge fan on the limited time offer. Sounds too infomercial-like. You never see companies like Apple do that. Then again, I have seen Amazon do it, and they are legit. Tough call.
U-Haul, with their prominent $19.95 (plus mileage) in-town rental ads plastered on all their trucks. In reality they tag on so many extra fees you pay a minimum of about $50 plus mileage. The $19.95 is almost like some random number among the many others that appear on your bill.
Yeah, that sounds like any car rental place though. I think the last car rental I had was something like $20 a day. So I thought it would be about $150 for the week. It was around $300 with the various fees.
I agree with most of these, Lazy Man, but here are a couple you missed.
1. Pay at the end- In today’s online lifestyle you will see this a lot. You play a game online or do an online IQ test, etc. Answer all the questions, click all the right tabs and finally get to the “last” page only to discover that you must subscribe to a pay service to view results or request a minimum number of products/services from their sponsors.
2. Hidden fees- This somewhat alludes to what CGC said about U-HAUL. Buy a product online at a great price, fill in all required fields such as credit card number, e-mail, physical address, etc. Then find out that after shipping/handling and many other services you will be charged twice or more what you initially expected to pay.