What Placebos and Mexican Coke Teach Us about Customer Expectations

The power of placebos continues to confound the medical community. How is it possible in double blind clinical trials that sugar pills provide as good or better treatment results than actual medications?  A lot of it has to do human biology and how our brains perceive the benefits of a product or service – even before we use it.

Creating self-fulfilling prophecies first starts with understanding customer expectations. Dr. Gary Small, Director of UCLA’s Longevity Center and co-author of The Alzheimer’s Prevention Program cites research confirming how our brain neural circuitry drives our choices based on prior experience and expectations. The frontal lobe or “thinking brain” as it’s sometimes called seems to determine these perceptions he says.

What we expect to happen often actually does. And that’s why marketing is so darn important in identifying customer expectations and then designing a plan to deliver or exceed those very expectations.  Read Inc Magazine article

The Murky World of Paid Online Reviews

One sure fire method of garnering positive comments for your product or service is paying for online reviews. And with plenty of companies and services available to assist in this questionable strategy, there’s surely temptation to create an instant halo effect for new product launches. However, consumers are getting savvier in spotting fictitious reviews, and such an approach ultimately harms more than helps your brand.

Link to Inc Magazine

Shock and Awe: FDA Takes Wrong Approach to Influence Smokers

Will a picture of an autopsy or a bloody skull persuade smokers to stop puffing away? Governments around the world are convinced more obscene and graphic warnings are necessary to scare smokers away from their cigarettes. However, these efforts seem far and away from decision triggers that psychologists like Robert Cialdini might suggest.

What’s next for cigarette warning labels? It seems warnings from the U.S. Surgeon General haven’t been all that effective, and now the U.S. Food and Drug Administration (FDA) needs to “tell the truth” about cigarettes with offensive pictures of blackened teeth and tracheotomy patients on death’s door. And it gets worse in other countries, where governments have taken to shock and awe tactics of showing a baby’s corpse lying in a pile of cigarettes or bloody skulls to show that cigarettes may cause strokes.

These techniques add up to a bunch of hogwash, says Financial Times columnist Christopher Caldwell. He says these warning labels won’t educate anyone, and in fact, will do the opposite and scare people. “The pictures (on the cigarettes) are obscene and exploitative,” he says. “They show naked, vulnerable people to whom violence has been done.”

A quick review of Robert Cialdini’s Principles of Influence seems to support Caldwell’s points. When trying to gain compliance, Cialdini suggests using decision triggers of reciprocity, consistency, social proof, liking, scarcity and authority. While not all of these decision triggers may apply to the efforts of getting smokers to quit, there are definitely some that could work.

Take for example the principle of social proof. Cialdini writes in Influence that “social proof can be used to stimulate a person’s compliance with a request by informing the person that many other individuals are or have been complying with it.” So in this instance, instead of scare tactics, what if messaging was devised around how 80% of U.S. citizens don’t smoke? Or something along the lines of, “Just about everyone has quit smoking, you should too.”

The FT’s Christopher Caldwell worries that eventually these new scare images will lose their power to shock and then require even more graphic images. Are we traversing down a slippery slope? Marketers, weigh in, I’d love to hear your thoughts!

Questions:
• Are smokers “uneducated” about dangers of lighting up? Will these new shocking photos have their intended effect?
• Caldwell argues that plenty of other things like sex and even driving could kill people. Do these products that support these activities deserve graphic warning labels, too?

Understanding Influence: Studying the Wall Street Effect

Film specialist Ellen Summerfield says that movies can challenge our values and even raise awareness of other cultures. And in terms of exposing finance’s “survival of the fittest” culture, there are few films better than Oliver Stone’s Wall Street. Interestingly, while Oliver Stone had meant to preach a message on the ill effects of avarice and hubris, the movie actually had a counter effect of inspiring thousands to emulate the bad behavior of Gordon Gekko. Undoubtedly then, sometimes the best intentions to influence thoughts and actions may not have the desired effect.

For those unfamiliar with Wall Street’s story, stockbroker Bud Fox (played by Charlie Sheen) finally gets his big break working for ethically challenged M&A maven Gordon Gekko (played by Michael Douglas). In a rag to riches story, Bud is asked to discover then trade on insider information—which makes him wealthy and Gordon Gekko even richer. Things come crashing down as Bud Fox is cornered by the Securities and Exchange Commission (SEC) into providing state’s evidence on his former boss.

More interesting than the narrative is the impact of Stone’s Wall Street on popular culture and B-schools across the globe. In the Sept. 24, 2010, issue of the Financial Times, an article titled, “How ‘Wall Street’ Changed Main Street,” quotes several executives on how the movie unwittingly glamorized banking culture.

For example, Frank Partnoy, now a professor at University of San Diego remembers how, as a math student at the University of Kansas, he was mesmerized by the movie. “I was naïve,” he says, “but it actually inspired me. It made Wall Street seem exotic and alluring.” And former UBS banker, Ken Moelis says, “(Wall Street) became a cult phenomenon on business school campuses,” where students could often be heard reciting line and verse of key movie quotes, such as “greed is good” or “lunch is for wimps.”

In Wall Street, Olive Stone attempted to bring a harsh spotlight to an otherwise opaque industry. Jean Yves Fillion, a banker at BNP Paribas in New York, says:,“The movie was a reflection of the industry as it was at the time, but it also captured a turning point. Finance used to be about stability, values and relationships. The movie was at the opposite end of the spectrum. It showed a different side of finance that was taking hold.”

And in fact, this “different side” of finance ruled the roost for 30 years (with some minor blips) until the grand daddy of market crashes, the global meltdown of 2008, brought both markets and investors to their knees.

With Wall Street, Oliver Stone had attempted to weave a moralistic tale of the dangers of greed and change people’s behavior. However, his movie  had the opposite effect of inspiring hundreds of thousands into the industry. And considering markets around the world are still digging out of the mess created by the last global meltdown (see Greece, Portugal, Iceland, Ireland and more), it begs the question of whether society as a whole is ready to re-review Stone’s original intentions.

For example, San Diego University professor Partnoy says that for future quants and math majors, the allure of Wall Street is still there, but is now moderated. “When I show the original (Wall Street) movie in class, the ethics of students have changed 180 degrees,” he says. “In the 1990s, (the movie) was seen as inspiring; today’s students get the morality tale right away.”

And in a recent letter to editor of the Financial Times, 17  prominent City of London bankers attest that, “it is essential to restate and affirm the social purpose of financial institutions. Through work we all seek to realize ourselves as people, provide for our dependents and make a contribution to the social good.”

Ultimately, big Wall Street paychecks aren’t going away. And the industry will likely continue with its dog-eat-dog mentality. However, perhaps there’s also room in the industry for a return to customers instead of counterparts, relationships instead of transactions, and advising in place of selling.

Economies of the world, companies and individuals rely on the availability of credit, insurance, and other financial services to survive, expand, and thrive. The finance industry is necessary for economic expansion. But maybe a kinder, gentler, more constrained industry focused on its “contribution to the social good” is in order as the London bankers suggest.

In regards to his sequel, Wall Street: Money Never Sleeps, Stone says; “The issues in this film are the same as those in the last one: Is greed good? Does it work? Are human values more important than financial ones? These are all issues we face in our own ways.”

Good questions, all of which are still relevant. Perhaps it’s time for global communities to revisit them.

• In Wall Street, Stone aimed to ask important questions and motivate people to change their conduct. Instead, his movie had the opposite effect of galvanizing thousands to ape the mannerisms and bad behavior of Gordon Gekko. Can you think of instances when you attempted to influence an outcome and your efforts had a completely opposite effect?
• On the topic of “influence”, what did Stone get wrong? What did he get right?