business management and psychology

 Business psychology and integrity

Psychologists have long studied the art of salesmanship. What makes us buy new products.

One very popular strategy that marketeers use is buy one get one free. What is the logic behind it.

In one experiment the psychologist asked the subject to share their opinion about a topic.

Next, they asked them to write the opposite of that opinion, and they gave them some amount of money. The subjects were divided into two groups.

• One group was given one dollar to change their opinion, to write the opposite of their opinion.
• The other group was given twenty dollars to write the opposite of their opinion.

Both groups are in fact telling a lie so to speak. Both groups are saying that they dislike something that they actually liked. So that way both groups are similar.

What's different is that one group is being given one dollar and the other group is being given twenty dollars.

Several months later both groups were reinvited, and they were asked to share their opinion. What do you think happened.

The results were really shocking, even for the experimenter. People who had been given one dollar to change their opinion had in fact changed their opinion over time. People who had been given twenty dollars to change their opinion stuck to their original opinion and had not changed them.

cognitive dissonance:

This was a very difficult thing for psychologists to explain the theory of cognitive dissonance came about.

The explanation was that people who were given one dollar to change their opinion did not consider the money as the real reason for changing their opinion. And people who had been given twenty dollars knew that they were lying for twenty dollars which was a lot of money in the 1960s, it is a lot of money even now, but in the 1960s in America 20 dollars was a huge amount of money and one dollar was still not that much.

So, the people who had actually lied or opposed their own opinion for a dollar, did not think the dollar was a good enough reason, so they actually had to think of some other reason, it created dissonance in their cognition, it created a conflict in their cognition.

So, in order to resolve that conflict, they had to convince themselves that what they were writing was true.

Whereas the other group knew, twenty dollars is a lot of money that's a very good reason for me to tell a lie or oppose my own opinion that is why after six months this group had not changed their opinion.

So that is the principle behind buy one get one free. Why?

Example:

You have two jars let's say of pickle, mango pickle and you've never really tried this particular brand of mango pickle before. So, they charge you a hundred rupees for this bottle of mango pickle and they give you another bottle for free. What happens is that you actually spent a hundred rupees to buy a bottle of pickle. Now the chances are if the pickle tastes more or less the same as any other pickle, you will say wow a hundred rupee is well spent. why? because you do not want to see yourself as somebody who's made a bad decision and on top of that you got an awesome reward you got a second bottle.

Therefore, you bought something that was worth 100 rupees for in fact 50 rupees per bought.

So, two things are happening now. One you're praising yourself for having bought this amazing brand of pickle, because your decision can't be wrong you also made a huge saving. So, you can see why marketeers who use this strategy succeed generally providing the product is reasonably good.

And let me tell you no psychologists, no marketeers, no salesman, can do sustainable marketing and sustainable selling of a product that is over poor quality over the long term.

So, a shopkeeper a retailer might sell you something terrible today, chances are they will lose you as a customer in the long term.

So, in an area where different products are more or less comparable these marketing strategies can have a very strong impact. Another very common strategy of selling that is in fact very ethical, but also very powerful is to actually discover the needs of the customer first and then to adapt your product according to the customer's needs.

There is no better strategy to date than this adapting the product to customer's needs. But then there is the other step you have made the product now how to get the product to the customer and that is provision of relevant information.

So, you can see now that psychology has entered a new era, we're not only looking at how to sell the product.

We are actually looking at meeting the needs of the consumer, meeting the needs of the customer and conveying to the customer how this particular product will meet their need.

A lot of the times salesmen save their time that they would typically spend negotiating and bargaining and arguing, because what happens in negotiating and bargaining is that the consumer feels that they're giving up something and they feel that they're giving up something to the salesman and the salesmen feel that they have to win something from the consumer. So, it becomes a win-lose struggle between the two parties.

Whereas when the salesman goes to the customer and tells them that look, this product has been created so that your needs can be met and if the salesperson successfully communicates that idea to the person, to the buyer, to the consumer, to the customer, chances are that the customer will see it as a win-win, whereas the salesperson gets the right price for that product and the customer gets value for their money.

There is never a substitute for honesty, integrity even in buying and selling.