Warning! 6 Ways Companies Are Pushing Your Spending Buttons

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It’s tempting to believe that we make independent decisions, free from outside influence. I’m a grown-ass woman, I’ll tell myself. Ain’t nobody tell me what to do!! But just how true is this? How autonomous am I, really? I’d argue not very, and I don’t blame myself. There are a lot of businesses and organizations out there that bleed cash trying to convince us, the consumer, to spend money that we might not have, on things that we don’t need and maybe didn’t even know existed. This creates an environment where it’s difficult to know when we’re buying because of pure desire, and when we’re being duped.

For those of us trying our hardest to be financially responsible, it can sometimes feel like a minefield of advertisements and opportunities to spend money out there. Just one day walking through the world could end up costing us a proverbial arm and a leg. While there will always be temptation, we can protect ourselves from marketing’s full-on assault on our pocketbooks. One way to do this? Take a look at the opposition’s playbook: Let’s talk about the marketing techniques used to convince us to spend, along with some suggestions on how to protect yourself from the psychological warfare they unleash on us daily.

1. Emotional Appeals

Do you want to be cooler, prettier, smarter, and more skilled? Do you want your life to be easier, more fabulous, more fun? Deep down inside, do you want people to be jealous of you? Lawd, I know I do!  I’m only human, and not ashamed to admit it. Any good marketer knows that tapping into your deep, complex well of feelings is a much smarter strategy than making appeals to the value or features of a product.

Example: A shampoo ad doesn’t go into detail about its ingredients or how it’s used; it tells you how beautiful, glamorous, and of course, enviable you’ll look with hair that’s shinier than an oil slick.

How can you deal? Give yourself a 24-hour hold period on any impulse purchase. Then, remind yourself that this thing you’re about to buy is definitely not going to change your life. The feeling will fade.

2. Anchoring

Anchoring is, in another word, a sale. It’s process of marking something up, just to visibly mark it down. People tend to make a decision about whether to buy with the first piece of information they receive. This is when the “anchor is dropped.” When we later learn that the good is, in fact, cheaper than we already assumed, we are more likely to buy the item than if we had simply heard the sale price first.

Example: You walk into your favorite store and see a shirt that you like. It’s too expensive. Then, the sales guy tells you that this very shirt is 25% off. Gasp!! You perk up and do some shotty mental math. You know that it’s still too expensive, but hey, it’s suuucchhhh a gooooddd deallll! You buy the shirt.

How can you deal? Reset. Walk out of the store. Walk back in. Look at the item again, believing that the sale price is indeed, the full price. Would you be as interested? Remember, you’re not saving 25% on a shirt, you’re spending 100% more money than you were going to, before you heard about this sale.

6 Ways Companies Are Pushing Your Spending Buttons

3. Social Proof

Making people believe that “everyone’s doing it” is helluva way to push product. If everyone around you is consuming something, you’ll be more inclined to want to consume it too. No surprise there; we’re social creatures and often trust the mind of the group or a person we respect or idolize. The different sources of social proof in marketing are experts, celebrities, crowds, users, and our peers.

Example: Once, a guy I liked told me he liked girls who wore boat shoes. So, I bought a pair of boat shoes. But here’s the thing: I hate boat shoes. This makes me a pathetic a-hole, and I completely realize it. This same effect is quite powerful when harnessed by marketers. The most obvious example? When brands hire pop-culture icons as their spokespeople or when celebrities endorse products.

How can you deal? Relentlessly question fads and be suspicious of marketing techniques that make you feel left behind. Then, think about the most embarrassing thing you’ve ever bought because “everyone else is doing it.” Seriously, do it. Then, every time you get the urge to spend money because marketing tells you it’s necessary to fit in, whisper it to yourself, over and over. Boat shoes. Boat shoes. Boat shoes.

4. Scarcity

It’s the marketing version of “wanting what we can’t have.” Something freaky happens in our brains when we know that (perceived) supply is limited and (perceived) demand is high. If we believe that an item is rare or may soon become unavailable, we’re more inclined to view the product favorably—and whip out the plastic to ensure that we get our piece of the pie before it’s all gone.

Example: You’re doing the worst thing known to humankind; you’re car shopping. You find something you like, but you need to do more research. The car salesman claims that this is the last of this make and model on the lot for this price. They’ve been going like hot cakes, he claims, and this specific model and color will be long gone before you get back!! Well, shoot. It’s a good deal, you think. Naturally, you want the process to be over. No, you haven’t done all of the research, but you…..buy the car anyway.

How can you deal? Any time you see any version of last chance!! or only three seats left or going fast!! pretend like hell that you don’t see it. Remind yourself that in this great big world of endless consumerism, there’s always more where that came from. Make the decision solely based on the merit and price of the product at hand. Have you done proper research? Does it fit in your budget?

5. Decoy Effect

This stealthy technique is generally used in pricing models where the consumer has to choose between multiple options at different price points. A decoy price is included to lure buyers into the more expensive option. This is a technique that is common for products or services that often come in “bundles.”

Example: In his TED talk, “Are We in Control of Our Own Decisions,” Dan Airley looks an example of a magazine subscription bundle offered by the Economist. Here’s their pricing model:

Online Subscription: $59

Print Subscription: $125

Both Online and Print: $125

Why would they even offer the middle subscription? Who would buy that, when you can tack an online subscription for exactly $0 dollars? Confused, Airley reached out to the Economist to find out why they included this as an option. He received no reply, so he tested his theory on his MIT students. He found that they were more likely to choose the most expensive option when the decoy was included, and more likely to choose the cheapest option when the decoy was not included. THE ECONOMIST KNEW.

How can you deal? Airley stresses a point about the decoy effect that’s useful for understanding our own behavior under the influence of all marketing strategies: We have major cognitive limitations. If only we acknowledged and understood our cognitive limitations the way we understand our physical limitations, we could make the world better. On an individual level, think of how it could help us all move throughout the world in a more thoughtful and autonomous way. Watch his full TED talk here.

6. Targeted Marketing

All marketing is targeted, yes, but it’s more homed in than ever before. Twenty years ago, an advertisement on television or in print could be targeted to a general demographic, such as your gender and age. Now, through online data collection, companies can target you through your past spending behaviors, where you shop, where you live, what websites you use, and what you search for online.

Example: The other day, I was talking with a friend about targeted ads. Long, long after going on a tropical vacation, she finally posted pictures on Facebook. All of the sudden, she was deluged with ads for bathing suits. We decided to investigate why this would be. Our findings are hypothetical, but we learned that some advertisers buy data from Facebook that is scanned from posted photographs. Freaky, y’all.

How can you deal? This is a tough one. Some people like the targeted advertising. One of my friends even said “Well, if I’m going to be advertised to, anyway, it might as well be for something I like.” Personally, I hate it. My recommendation is to educate yourself to what is happening, and mentally prepare for it to intensify. Already, I buy almost nothing online because it’s too slippery a slope. It’s convenient, yet, but it’s also too easy to spend hundreds of dollars in a blink. As a side bonus, advertisers have less information about me. If this isn’t an option for you (I see you, busy moms) consider taking some of the precautions listed here, such as browsing “incognito,” deleting your cookies frequently, using special browser plug-ins, and avoiding signing into websites “using Google” or “using Facebook.

What techniques do you use to outsmart marketers? Share in the comments below!

Amanda writes The Dumpster Dog Blog, which is scrappy, no B.S., financial education for young women. Check out her latest music video, Golden Girls Gone Wild (Save Now, Party Later).

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2 Comments

  1. Laura on July 9, 2018 at 1:18 pm

    Those are great examples. I find it can be really easy to get sucked into buying even with good intentions. I would add a solution to your list. Avoid – unsubscribe from emails, watch less TV, don’t go to malls, etc. It helps keep the desires under control.



  2. Money Beagle on July 10, 2018 at 2:05 pm

    There’s proof, though, that anchoring is what customers desire. People want to think that they’re getting a deal. Look at what happened to JC Penney a few years ago when they decided to stop having sales and just lower prices instead. They practically went out of business overnight, and even though they eventually went back to anchoring, they’ve still never fully recovered.



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