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Fear of loss, desire for gain

Found myself in the mall this weekend (gasp) at a Lord & Taylor (go figure) and discovered the oddest promotion.

After I purchased $200 worth of stuff, the salesperson said, "you qualified for two gift certificates worth $40. No strings attached. Go upstairs and you can get them right now."

Note: no notice before the purchase. No signs, no promises. The certificates weren't designed as an inducement to get me to buy anything.

"Why would they spend 10% of revenue and perhaps 30% of profit for no reason?" I wondered.

I headed upstairs, waited for two minutes and got my certificates, just so I could let you, my gentle readers, know about this crazy scheme. Walked over to the tie department and bought $39 worth of beautiful ties, marked down from $100 (hey, I'm cheap...) and I was done.

On my way out, I passed this woman:Lordtaylorbags_1
Here's her deal. She was on her FOURTH batch of gift certificates. Every time she got $20, she needed to spend it right away. She ended up spending more than $100 each time, so she then went back to get another ceritificate or two, but needed to spend it, and on and on and on. A quick talk with the gift certificate dispensing person confirmed that this was far from unusual behavior. It was a frenzy.

So, people "earn" the certificate, but unable to resist the fear of losing what was theirs, went over and collected it. But now that they have it, it's "free money" so they go and spend it, and the cycle continues.

This is so much more effective than the typical mark down.

I bet it would work even better online. Imagine how it could help shopping cart conversion...


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Listed below are links to weblogs that reference Fear of loss, desire for gain:

» Gutschein-Karussell from Exciting Commerce
Ein interessantes Gutschein-Konzept beschreibt Seth Godin heute: Beim US-Händler Lord Taylor bekommen die Kunden nach dem Kauf Einkaufsgutscheine (20$ ab einem 100$ Einkauf), die sie sofort einlösen können. Die Gutscheine werden ohne Vorankündigung ver... [Read More]

» free gift certificates from Can You Hear Me Now?
Link: Seth's Blog: Fear of loss, desire for gain. Ah, how simple we humans are. I wonder how many of the "frenzied ones" only spent what they had in gift certificates? My guess is that they spent a lot more [Read More]

» Un-marketing marketing from The Journal Blog
I happen to be acquainted with a couple of online retailers who have trouble with sales. Whenever they decide to have one, nobody takes advantage of it. In fact, one of them jokes in his newsletter about how his regular... [Read More]

» I have to tell my friends! from Buzzoodle Buzz Builder
Seth Godin has a great post about a novel approach to getting more from a retail customer. I am surprised he did not mention that many of these people probably called their friends and told them to get down there that day. [Read More]

» Retail frenzy - odd promotion or sheer genius? from ?ic @TomorrowToday.biz
Even in Africa, Seth Godin is a marketing god. Each new post on his blog is a gem. I've wangled a copy of his new book, The Big Moo (check out Seth's unconventional marketing campaign for the book here - brilliant) from the lads at Jo'blog, and will ... [Read More]

» Gewinn und Verlust from Der Weltraumpapst
Ein dem Menschen innewohnendes Phänomen ökonomischer Irrationalität, das mir auch schon öfters aufgefallen ist, beschreibt der bloggende Marketingguru Seth Godin anhand einer auf den ersten Blick dumm erscheinenden Gutscheinaktion: Fear of loss, d... [Read More]

» Fear of Loss, Desire to Gain from Real Estate Internet Marketing
Just a quickie, I ran into this post by Seth Godin and had to mention it here. Seth's Blog: Fear of loss, desire for gain If you click the link you will see that an apparent idotic idea of giving away gift certificates as a store is a boon to sales as ... [Read More]

» Fear of Loss, Desire to Gain from Real Estate Internet Marketing
Just a quickie, I ran into this post by Seth Godin and had to mention it here. Seth's Blog: Fear of loss, desire for gain If you click the link you will see that an apparent idotic idea of giving away gift certificates completelty unasked and unadverti... [Read More]

» Sell online? Read this. from Quod.scripsi.scripsi
If you sell online, read what Seth Godin says about the shopping cart conversion. I suspect he is right. ... [Read More]

» Evolutionary Small Business Marketing - Talk to Me Like I'm a Caveman from Marketing Comet - Small Business Marketing Secrets
I have a theory that a lot of predictable human behavior can be linked back to evolution. Now I don't want to get into a religious debate with anyone, but this is my opinion. A lot of hard-wired ways we behave today made more sense when we were cave pe... [Read More]

» Evolutionary Small Business Marketing - Talk to Me Like I'm a Caveman from Marketing Comet - Small Business Marketing Secrets
I have a theory that a lot of predictable human behavior can be linked back to evolution. Now I don't want to get into a religious debate with anyone, but this is my opinion. A lot of hard-wired ways we behave today made more sense when we were cave pe... [Read More]

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