Consumer Psychology: turning persuasion into sales

Advertisers are dependent on the their ability to persuade you to buy their product or service. Advertising expenditures continue to rise, however, I am not convinced that actual sales are following a similar trajectory. One advertising medium that seems to be most successful in turning persuasion into sales is the informercial. This extended television commercial which airs anywhere from 2 to 30 minutes informs the viewer about a product in an entertaining manner and makes the consumer aware this is paid programming. It is considered effective advertising because:

• The products advertised tend to have everyday practical application ( Proactive skin care, George Forman Grill, etc.)
• The product and its benefits are described in great detail using customer testimonials, industry experts, and celebrity endorsers
• Provides the consumer with the value proposition and usually urges you to buy now, offering a bonus of some kind with the purchase.

The biggest difference between the infomercial and a standard 30 second ad, is that product sales can be directly linked to how well the infomercial persuaded the consumer to buy. As an example, since its introduction in 1994, The George Forman Grill has sold more that 80 million units, with unofficial estimates suggesting that revenue has exceeded the cost of producing and airing its infomercials by 20 times. In contrast, traditional television ads have many of the same elements that informercials deploy, however;

1. they are condensed into a smaller time frame (30 seconds), leaving less time to persuade
2. provide no viable means of correlating the expense to produce and air the advertisement to sales.

To provide context, let's examine one of the most sought after and expensive ad spaces is Super Bowl advertising. To highlight the performance of one its advertisers, the cost of a Super Bowl ad in 1977 was approximately $438, 000. To run a similar spot in the most recent Super Bowl ( XLIII), the cost was $3M. The Coca-Cola Company spent over $6M on its Super Bowl advertising, but according to TiVo research, didn't place among the top 10 of the most favorite ads aired during the telecast. This is an important measure because the higher the rank the more likely it is that consumers watched your ad, connected with your product and hopefully will purchase. These results lead you to conclude that the commercials didn't do a very good job of persuading consumers and thus its less likely that incremental sales will be linked to the airing of these ads. Since Coke probably spent at least $500, 000 to produce these two 30 second ads and over $6M to air them, you have to conclude that this was a poor investment. To further accentuate the point, for Coke to reach a break-even on its Super Bowl ad-buy excluding production cost, Coke would have to sell 229, 357, 798, cases of 20 ounce product at $ 1.09 per bottle at retail.

The math in this example may seem like an extreme illustration, but it illuminates the point, that not only was Coke unable to persuade consumers, but its unlikely that enough sales will be generated to make this investment viable.

Author Kevin Dutton recently coined the phrase " supersuasion." He describes this as "a brand new kind of influence that disables our cognitive security systems in seconds." He outlines six characteristics of those who master " supersuasion." They are:

• Simplicity
• Perceived self interest
• Incongruity
• Confidence
• Empathy
• Humor.

Even before the term "supersuasion" was invented, I think the Coca-Cola brand embodied these characteristics starting with the ad " Hilltop" which was released in 1971. During the time the "Hilltop" campaign was in market, Coke enjoyed robust growth in both sales and earnings for its flagship brand. It certainly paid its own way. However, I don't think very many brands or products have mastered the techniques described by Dutton, and in fact I believe most won't! Apple may be one of the more notable exceptions.

After all that I've read and reviewed on "persuasion," there is no doubt it is at the core of advertising and is more sophisticated in its various executions than I have described here. However, persuasion is not really scientific. As infomercials seem to bear out, if an advertiser does an effective job of telling the consumer about a product or service that has practical application, provides them with a reasonable explanation of the value proposition, and keeps the message simple, they may have a better chance of actually turning persuasion into sales!

References: The Power to Persuade; How masters of " supersuasion " can change your mind.

Kevin Dutton ( 2005)

Infomercials and Advertising Effectiveness,: An empirical Study, Brett, A. S. Martin, Andrew Bhimy, Tom Agee, Journal of Consumer Marketing; 2002. Volume 19., Issue 6: P.468-480.