How do retailers go about selling computer parts and technology items? Is there a method to this madness? Indeed there is—retail practices are deeply rooted in science and statistics measuring how different types of stimuli and emotional triggers affect purchasing decisions.
Perhaps the most notable sales psychology text is Influence: The Power of Persuasion (1984, 2006) by Dr. Robert Cialdini. In his research, Cialdini worked “undercover” as a car salesman and telemarketer for three years. He delivered thousands of methodical sales pitches, observing and recording outcomes for customer behavior.
He identified six universal factors of influence that led to customers making purchases.
- Reciprocity
- Scarcity
- Authority
- Commitment & consistency
- Liking
- Social Proof
Digital marketing and e-commerce may have flipped the old paradigm of buying and selling. But even today, Cialdini drives the way marketers present to customers. The technology industry is particularly demonstrative of his principles as you will see in this quick rundown.
Principle 1: Reciprocity
“The obligation to receive reduces our ability to choose whom we wish to be indebted to and puts that power in the hands of others.” Humans are compelled to reciprocate when given or a gift or freebee. Ostensibly customers return retailers’ nice gestures with their patronage.
How vendors do it: Free 14-day trial of the “professional” version of business software.
How we do it: Enrollment in NeweggBusiness Rewards is valued at $49.99. The company has waived the fee and made it free to sign up. Customers get benefits like free rush order processing, free shipping, and BizPoint accruals for deeper discounts. It worked—Rewards enrollees spend more on average compared than before. I can’t disclose how much; let’s just say the marketing team crushed its KPIs last year.
Principle 2: Scarcity
“People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value.” Fear of missing out (FOMO) is a motivator. Low inventory levels, limited time discounts, and one-time deals influence purchasing behavior.
How vendors do it: Hotly anticipated new items (Intel Skylake CPUs, GeForce GTX 1080) are released in short supply, and enthusiasts respond with a buy-now attitude. This is not a coincidence. It is not the retailers that do this.
How we do it: Retailers create time scarcity with periodic promotional pricing. NeweggBusiness does Happy Hour discounts 7-11 a.m. every other Thursday morning, for example. Newegg Flash offers a mish-mash of deeply discounted items several times a day.
Principle 3: Authority
“We learn to trust experts who we believe are authorities in their subjects. We may not obey experts, but we do accept their assertions of truth within their subject area.” It feels safe purchasing from someone with expertise. Recommendations and word of mouth build authority too.
How vendors do it: White papers by ‘seasoned business leaders passionate about strategy and innovation’ are the old standby. My favorite vendor content is the Lenovo blog, the ecosystem of Cisco publications, and Txchnologist by GE.
How we do it: Customer reviews are prominently placed on product pages. We publish buying guides, infographics, articles for recommended practices, industry news and humor pieces to build trust and establish authority. Industry-specific Account Executives provide additional support if needed.
Principle 4: Commitment and Consistency
“When we make a decision, we like to feel that this is the right decision for us [and] feel personally responsible for the decision and seek to justify it.”
How vendors do it: Apple is historically great at appealing to a consumer fan base that spends a premium for its devices. Intel has a similar following for desktop CPUs, and Cisco for networking gear.
How we do it: Newegg built its reputation on low prices, easy site navigation, product selection, responsive customer service, and reliable fulfilment. PC enthusiasts grew up using Newegg to build gaming rigs. Now they use NeweggBusiness to bid on technology for grown-up IT and procurement roles.
Principle 5: Liking
“Two things that increase liking in particular are similarity and praise. If you show that you are like them in some way, they will like you. If you tell them they are wonderful, they will also like you.”
How we do it: Engaging customers on social channels and discussion boards is probably the most fun part of the job for me and the other team members involved. We like to talk shop; come say hello.
How vendors do it: Same as us; some are better at it than others.
Principle 6: Social Proof
“We will use the actions of others to decide on proper behavior for ourselves, especially when we view those others as similar to ourselves.”
How vendors do it:
How we do it: Delivering day in and day out is the most affordable way to generate good word of mouth. Having a few SEO wizards on staff helps for e-commerce.
Final thoughts
How are we doing? Be honest! Which of Cialdini’s principles is the most important for a retailer selling computer parts and technology items?
