How to Sell to Procrastinators
by Antone Roundy | 2 Comments | Marketing, Podcast
I wrote a few days ago about how to end procrastination -- a problem lots of internet marketers suffer from.
Well, guess what. Your customers have the same problem. How can you prevent them from putting off buying, and are there ways to benefit ethically from procrastination?
We usually think of procrastination as putting off something you don't want to do. But in fact, we also procrastinate enjoyable activities. An article that appeared the other day on Dr. Robert Cialdini's site, Inside Influence Report, shared the results of a study of coupon redemption:
... a series of studies were set up; one of which offered participants a gift certificate that was good for coffee and cake worth $6 at a high quality local bakery store. In fact two different gift certificates were distributed and whilst both were of equal value the expiration dates differed. One would expire in three weeks and another expire in two months.
...
About a third of participants who were given the certificate with a three week expiration date visited the bakery store to claim their coffee and cake. But only 6% of those given the two-month certificate redeemed theirs.
Over 2/3 of the people who'd received the two month certificate said they expected to use it, so the problem wasn't lack of interest. After, when asked why they hadn't redeemed the certificate, many reported that they'd procrastinated or forgotten it.
The obvious conclusion is that if you want people to do something, give them a short time limit. This is why a two-day sale can outsell a week long sale.
Slightly less obvious is that if you don't want people to do something, give them plenty of time to do it.
This principle is widely taught in relation to money back guarantees -- for example, you'll get less refund requests for a 90-day money back guarantee than if you set the time limit to 30 days. I've even read recommendations that you offer a 1-year guarantee!
The same is true of trial periods -- you'll get less cancellations with a one-month trial than a one-week trial.
Is Using "False Scarcity" Ethical?
Is it manipulative to use made-up time or unit count limits to sell products? My answer, as usual, is "it depends".
If you're not offering a money-back guarantee to protect those who get swept up in the moment and buy something they don't need, yeah.
If you don't actually cut off sales or change the price as promised when the time or unit number limit is reached, yes.
If you're going to offer the same "once in a lifetime" sale for two days next week, then yes, that's unethical too.
But as long as your product is worth buying, you have a fair refund policy, and you're not doing anything deceptive, scarcity techniques can actually benefit customers by helping them overcome their own tendency to procrastinate. Think about the coupon study.
Is Using Procrastination Ethical?
Is it "sneaky" to use long refund and trial periods to reduce refunds and cancellations?
"It depends."
Long trial periods can be used ethically if you honor refund requests that come in shortly after the first full billing.
You may have a no-refunds policy for later billings (particularly if you're shipping a physical product or doing something else that'll cost you money when you refund it). But the first billing should be refundable, in case the customer didn't realize they were signing up for repeat billing or just procrastinated canceling too long.
Long refund periods are a more complicated issue.
On the one hand, there'll be people who wanted a refund and lost it by procrastinating. There'll also be those who procrastinate even looking at the product, and only realize they want a refund when it's too late.
Using long refund periods to increase the number of people in these groups is a little sneaky. But is it enough to offset the legitimate reasons for long time limits?
For example, long refund periods give non-procrastinators (if such people exist :-) more time to evaluate the product. They also increase sales, which is ethical if your product lives up to your claims.
Given that there are legitimate reasons for long refund periods, I think the customer has to bear the responsibility to not procrastinate.
Plus, there are unethical customers who buy, fully intending to request a refund at the last minute. If they procrastinate and miss the deadline, you won't catch me crying for them.
November 13th, 2010 at 10:47 am
Antone,
I've always operated on two premises when it comes to the purchasing habits of the internet public; 1) that people buy according to what they want, not what they need. Which is why you see people addicted to the digital lifestyle replete with all the bells and whistles, rather than make that past-due bill payment. And, 2) that people buy WHEN they want, so you as a online merchant just have to make sure you have products/services of real benefit for when they finally are ready to purchase.
And as far as the "false scarcity" approach, I've alway laughed about it and steadfastly AVOIDED it because people aren't stupid and many of them understand that in the case of digital products, it's only zeroes and ones, so there is no such thing as scarcity. People who try to sell me from their lists in this approach get kicked to the curb. It's more understandable if you're offering solid, physical items.
People are going to do what people are going to do, so to base your sales outcome on techniques that seek to manipulate their behavior in any way, they'll turn colder than a tuna in arctic waters (lol!). No matter if you give them to Judgement Day for their refund period, if they don't want what you're offering, then you're outta luck. My approach deals with diversification of my portfolio of products/services based on years of trending as to what sells and what doesn't.
If a retailer is smart, this is a factor addressed in advance by the inclusion of red-hot bonuses or benefits that are offered within a specific time-frame. I've missed out on great deals in the past, but I know if there was an absolute must-have item in my mind's eye, I grabbed it faster than Roger Rabbit. And if I felt that I didn't get what I paid for, I went for the refund at the point of realization, and well within the prescribed time for the refund period.
November 16th, 2010 at 12:27 pm
Lee,
Thanks for your comment.
One thing I should expand on slightly -- the term "false scarcity" is usually used to describe things like claims (often untrue) that only 250 of a product will ever be sold, or prices that go up 10 minutes after a customer arrives at a sales page (but reset when you reload the page, or can be reset by deleting a cookie. I agree with you that such things are gimmicky at best, and unethical at worst.
But "false scarcity" can also apply to, for example, any limited-time sale -- a Thanksgiving Day sale, a grand opening sale, etc. It's not "false" in the sense that it's a lie, but that the product (or offer) isn't really physically "scarce". That kind of false scarcity can be used ethically, and can benefit customers.