Wednesday, December 31, 2008

Preying on impulses

Marketers spend quite a bit of time thinking about how to encourage impulse buying. In a sense, trying to encourage impulse buying is a form of gravity fighting. You're trying to get people to do something that they didn't really want to do.

[See my earlier posts on the folly of gravity fighting.

But although I do believe that trying to fight gravity is generally a foolish strategy, it does not fail entirely. There are ways to get people to do what they don't really want to do. There's quite a bit of art and science behind this. Good retailers study this carefully. They know which products to put near the cash registers. They know what kind of signage will "interrupt" people. And so on.

I'm seeing a lot more of this sort of behavior on the part of businesses. The poor state of our economy puts pressure on businesses to sell sell sell. So I'm getting lots more emails with all sorts of sales incentives.

But let's play around a bit with the notion of impulse buying. I think it's safe to say that, in general, the impulse purchase is one that the consumer didn't need. If it was a need, it would have been on the shopping list. One way or another, people manage to buy their needs (assuming they can afford to do so). You don't have to encourage the need based purchase. You may need to make sure that it's your brand or product that is selected to fill the need, but you do not have to convince people to buy what they need.

Impulse purchases, on the other hand, are not needs. They are wants. And they aren't even really significant wants or they would have ended up on the shopping list. Rather, they tickle some small non-rational fancy buried somewhere in our minds that we probably cannot explain or justify.

Since people don't need these, I would argue that they are harmful. Why? Because they consume resources for no good reason. People are spending money that they could have used for a need or a truly significant want, on something that will do almost no good for them. In more flush times, this may not be so bad. But now that consumers are genuinely strapped and many are out of work, can we morally defend business practices that encourage impulse buying?

I wonder whether devising marketing strategies to get people to impulsively buy more gum, DVDs, options for their new car, etc. is on firmer moral ground than prostitutes trying to drum up business by finding married men they know are sexually unsatisfied. (Assume for the moment that prostitution was legal.) Or the alcohol industry trying to sell to recovering alcoholics. Or the mortgage industry trying to sell homes to people who couldn't afford them. Oh wait, they actually did that. My point is that all of these situations involve impulses. The sexually unsatisfied man has impulses. The recovering alcoholic has impulses. And shoppers have impulses.

When you spend time developing strategies and tactics to get people to add a few more items - that they don't really need or want - to their shopping cart, how are you better than the prostitute, booze pusher or predatory lender? Because you just sold a pack of gum and it doesn't cost that much or really hurt anyone? OK, you have a point. But not a very strong point. I'll agree that there is a quantitative difference between "taking" someone for $1 and conning someone out of thousands or wrecking their marriage... But it's just a quantitative difference. The fundamental behavior is the same. You have used guile to get people to do something that is bad for them and good for you.

On one hand, I say "shame on you!" On the other hand, our economy is entirely dependent on this. Maybe it's shame on us all.

Seem my earlier post regarding excessive consumption and Tim Jackson's poignant comments on the issue.


Jer979 said...

Two thoughts on this one.
First off, not sure I agree w/impulse buying that it is fighting gravity. Impulse buying is more like seeing someone who is teetering on the edge and just giving them a nudge. The person is leaning towards the decision, they just need some sort of "push" to help them rationalize it (convenience, price, whatever). Fighting gravity is more like sending a staunch member of the Democratic party a "vote McCain" sticker or something like that. You have no (or almost no chance).

And, as for your recent rants against 'needless consumption,' are we to infer that your new year's resolution is to abstain from such useless, non-productive consumption by you of Starbucks and Beer?

Adam said...
This comment has been removed by the author.
Adam said...

[Note: I messed up with my earlier attempt at responding to Jer's comment so I had to delete and try again.]

OK, looks like I have some 'splaining to do.

First, I use "gravity" in another way. Gravity to me is not the almost impossible. Fighting gravity is about working against, rather than with, forces. The truth is that we can fight gravity. We can jump. We can throw things in the air. My point as a marketer is that it is expensive to fight gravity and, all things being equal, we should find ways to work with rather than against market forces. But I do recognize that, at times, fighting gravity is the right approach.

Frankly, you are the one that really helped me think this through. Last summer we had a chat after dinner one night in NJ and I shared some of my thoughts on this topic. You pointed out to me that getting a rocket to break through the atmosphere (i.e. fight gravity) is extremely expensive in terms of rocket fuel. So it is possible to fight gravity. You just need to make sure that what you need can only be found on the other side of the atmosphere and that you have the right rocket ship.

Now on to my next point.

Encouraging impulse buying is a gravity fighter to me because you're trying to get people to do something that they didn't really want to do. Instead of playing that game of putting the gum at the register where you know people are going to be standing for a few minutes with nothing to do, why not just make a better gum that is worthy of making the shopping list? [Before you or anyone else responds, I'm just using gum as an example. I'm not really sure what I just said is a good idea for gum. But it illustrates the point.]

The point I'm making is that playing with people's impulses is not morally neutral. Many marketers have looked at the economy including their declining sales and have reflexively put a lot of time and effort into thinking about how to get people to buy buy buy. I would argue that if marketers do that and never once stop to think that maybe it is wrong to try and get people to spend more on items that weren't important enough for them to want in the first place, that those marketers need a lesson in morality.

I'm not saying that the impulse purchases are completely unwanted. Obviously, everything that a person buys is fulfilling some need that was already there before the marketer did anything. I agree with you that the marketing just provides the nudge. Sometimes it's a small nudge and sometimes not so small. But I still think it is reasonable to draw a line between certain marketing behaviors and others. And when you're explicitly talking about encouraging impulses and the effect of consumers' satisfying those impulses is bad for them, you have a duty as a human being to think about whether you ought to be marketing that way.

Also, I did not argue against "needless" consumption. There are two points to be made on this topic: personal and corporate. There is a personal moral issue regarding excessive consumption. When life is all about the material, I would argue it is worthless. Or at least not worth any more than the life of an amoeba. [Hope I didn't just piss off the amoeba lobby.] People ought to think about how much and what they consume. For their own souls, for the lesson it gives their kids, for the environment, etc. And I think I pointed out that I live in a glass house on this issue. I consume too much. And I will again tomorrow. But I do think about and wrestle with this.

But I was not making the point about individual decisions on consumption. I was making the corporate point. I was talking about armies of MBAs and PhDs armed with lots of data and barrels of resources deliberately using art and science to separate fools from their money.

So I do not plan to abstain from Starbucks and beer. Those are not needless to me. They are often on my shopping list. And really, it's not my place to tell people what is needless or not for them. I wasn't trying to do that. I'm just trying to put a point of view out there for marketers that says we are human beings first. We have to think about the morality of our actions.

Now to my final point. Your description of my posts as "rants" stung. Now sometimes people deserve a sting and I am certainly not immune. But I'd ask you as a personal favor to go back to my posts and see if you really feel they were rants. You can comment again, send an email, call, whatever.

What I was going for was a much more sensitive and soul-searching argument. As a marketer, I do think about these things. But I also recognize that it's not so simple. There are lots of grays. I think marketing cigarettes in a way that you know will lead people to destroy their lives, is probably evil. Same for unhealthy food. But marketing those products in a way that people will enjoy them in moderation without destroying their lives, does not strike me as evil. Preying on old people with contorted mortgage or investment products that are financially disastrous to said old people is evil. Selling someone a mortgage that is a stretch but not impossible does not strike me as evil.

But it's not just about evil or not evil. There are shades. And, to me, when you're preying on impulses - when you're explicitly talking about people's impulses and how you can turn them to your advantage - you are on thin moral ice whether those impulses are for nicotine, crack, booze, sex, fancy homes, designer jeans or, yes, a pack of gum.

But, as I pointed out in my earlier posts, our entire economy is built on consumption. And I am not advocating throwing tens of millions of people out of work so we can readjust our level of consumption. (Although that may be happening anyway.) But I am arguing that we need to be talking about this. I find it unseemly when there's nary a mention of the fact that it might not be so good to push yet another new whatever on the consuming public.