8 Marketing Ploys to Get You to Buy More Stuff

Consumerism, especially during Christmas and the holiday season, is all around us. Marketing and advertising have extremely powerful and persuasive techniques to part you from your money. Here is a list of the most common marketing techniques that advertisers will use to get your attention and money. Joshua Becker’s book, The More of Less: Finding the Life You Want Under Everything You Own, provides a good list.

• Loyalty points and cards – Merchants offer us free rewards when we spend a certain amount of money at their stores. They often prompt us to buy things we don’t need, just for the satisfaction of redeeming the reward.
• Retail-store credit cards – These cards offer us a percentage discount on our purchase if we sign up today. This works out well for the issuers; research shows you will spend up to twice as much with that card in hand. And they will have collected all your personal data and shopping habits too.
• Scarcity mind-set – marketers routinely fabricate a sense of urgency to compel us to purchase. Item on sale for a limited time! Package deal will soon be gone! Limited number of seats remaining! Each of these claims forces us to make a snap decision. Usually, we end up making the wrong one.
• Instant markdown – The CEO of JC Penney was fired because he decided to remove sale prices from items in their stores. His strategy was to mark every item as low as it could be priced all the time – no hassles or sales, just low-priced items. Unfortunately, the strategy failed as sales plummeted. Lowering the original prices resulted in lower sales. How could this be? Eventually, researchers determined that consumers were more likely to purchase an item marked, “on sale” than they were to buy the exact same product at the same price without a “sale” sticker on it. They went on to conjecture that most consumers have no idea how much a product should cost in the first place. By artificially inflating the original price of an item, retailers are able to trick consumers into thinking they are getting a deal on the item at the sale price, even if they aren’t.
• Decoy pricing – restaurants will often price one or two items on the menu unreasonably high even though they know few people will purchase the item. By setting one price at the top of the range, they make other options look cheaper. In retail, this is accomplished by pricing one item significantly higher than similar items next to it (large-screen televisions for example).
• Loss leader – a common trick among grocery stores (though they are not alone in this) is to offer one item at a discounted price just to get you in the door. Even though they take a small loss on the sale-priced item, they are confident you will walk out of the store having purchased more than that one thing.
• Samples – For shoppers, free food samples represent a fun opportunity to snack or test out a featured item the store hopes we will enjoy and purchase. But for the store, there is more strategy behind it. Whenever we eat a sample, we tell our body that it is time to eat, and our brains begin searching for food. Some studies report that 40 percent of people who accept an in-store sample will eventually buy a food item. Even though they hadn’t planned on buying it. Just because you passed up buying the featured item doesn’t mean the store didn’t manipulate you into spending money.
• Architectural layouts: Most of us know grocery stores place the staples of produce, dairy, meat, and baked goods at opposite corners so we have to walk the length of the store, providing more time for them to capture our attention. But did you know shopping malls are purposefully built in a way to disorient the shopper to encourage browsing and impulse purchases? Or that outlet malls are purposefully built on the outskirts of major cities to encourage shoppers to stay longer and spend more because they made a “special trip” to be there? Almost every retail building reflects a specific design strategy for bringing out our consumeristic tendencies.

Although I’m not advocating that we completely shun the purchase and enjoyment of products and experiences, what I do encourage people to consider is (to borrow a phrase from Marie Kondo), will this purchase bring me joy? Over the years, I have found that for many clients their most precious commodity, aside from the health of themselves and their loved ones, is their time. Time to enjoy doing the things they want to do and time to spend with loved ones.

Therefore, if you want to retire sooner rather than later and you are finding there isn’t enough money at the end of the month, I would be happy to help. The process helps you determine what’s important to you without the restrictions of a traditional no fun budget.

Brent Misener is a Financial Advisor with Raymond James Ltd. The views of the author do not necessarily reflect those of Raymond James. Statistics and factual data and other information are from source Raymond James Ltd. (RJL) believes to be reliable but their accuracy cannot be guaranteed. Information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. It is provided as a general source of information and should not be construed as an offer or solicitation for the sale or purchase of any product and should not be considered tax advice. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.