Are online tips actually useful?

When I was searching the web for ideas for my final blog I stumbled upon a blog called “10 Consumer behavior secrets togrow your sales”. Well if that isn’t a click-bait title I don’t know what is, but it worked, probably just because it was the first one in Google. I decided to scroll a little bit down and read the first secret; People buy for emotional reasons, then rationalize the purchase with logic. Hmm, where have we heard that one before? Oh yes, Jake Cook. There I was, thinking that he came up with that himself. But my attention was grabbed, I scrolled further and found some “secrets” I really related to.
                The first one being that people lie to researchers. Even if you know that it is anonymous you’ll still behave differently. I’ve done that before as well. Back home you can take part in experiments to make some easy money, which I quite enjoyed but never had any time for. But the time that I participated I noticed that I wasn’t behaving like I would normally, I was just trying to make the most money. Which makes me believe that other people lie to researchers too, just say what they want to hear and which has the highest pay-off and leave.
                The second one was that you must know what your customers are really buying before you can sell it. The essence of what I’ve learned in several classes on MSU, Design Thinking. What does the customer want? Well that’s what we make then! I feel that this was the most valuable lesson I’ve learned here. In a world where there is so much clutter and noise it is like a fresh freeze when something is made to actually serve the customer and make profit in this way. Not try to just sell, sell, and sell some more.
                The final secret was the last one, the longer a consumer engages with your brand, the more likely they’ll be to buy your product or service. For one project we were consultants for Caravan Ski’s, a start-up which makes beautiful hand-made ski’s. Our advice was to build a community around the brand. When we did research and asked people some questions, one of our questions was if they would be more likely to buy a brand if they used it more often. Almost exactly the same as this secret tip. Our research had the same conclusion, around 90% of the interviewees answered with yes. 

Retargeting

In e-commerce there is something called retargeting, and it seems to work quite well. Retargeting is a form of advertising that targets customers who already visited your page, but never converted. Online 98% of the people who visit your site are not ready to buy anything, they surf a bit, check reviews, but don’t buy right away. For these customers retargeting was invented, it places a cookie in your browser and therefore it is able to track your movements on the website. Yes, this is why every site asks you to accept the cookies now. But because they are able to see what you do on the site and if you buy something or not. So if you don’t buy anything, the cookie will later let the company know that you are just casually browsing and that you can advertise to them again. Hopefully they will buy now.
                If a retargeted customer comes to your site again, the conversion rate increases from 2% to 4%, it doubles! Still 96% is not ready to buy, but that is not the point. However, how much do you hate these retargeting ads? A group in class gave this as a strategy for an online company and I asked the question, do you really click those ads? Because I, for one, would never click on those. Almost everyone in class said that they had bought something this way. I was shocked. But, it is clear that retargeting works, well at least in America. I’m just keeping my best friend, AdBlock plus. What would I do without him?

More than you asked for.

Today I had dinner in the Harrison dining hall, not my favorite place to have dinner but it was close and free. One stand had a fried fish burger with some special fries, the only thing I wanted were the fries. So, I the lady nicely, could I only have the fries please? I don’t want the burger. Her response was that they only would come together, I was surprised. She said she wasn’t allowed to give the fries away on their own. I stressed that I wouldn’t eat the burger, and that I would just put it right back in front of her face. And so it happened, she nicely made a burger and put the fries on my plate and gave it to me, I took the burger off and put it in front of her face and walked away. A lesson in how to waste food, given by Americans. No wonder you waste 40% of your food every year.
                Although you can consider this funny or just extremely stupid, I thought about it in a different way. What if you give people more than what they ask for? Does it make them happy or not? Most of the times yes, for example if you’re buying clothes and at checkout you see that an extra shirt is added for free, everyone would like that. I think in the case of the food it was a little different because I clearly said that I didn’t want it. But still, be careful that you don’t give the customer too much, they may not like it. 

Online Shopping

“People buy with emotion and backfill with logic” something I learned from Jake Cook, my Digital Marketing class. This was the first sentence which came to mind when I heard that Amazon had patented the one-click-buy button. But why would you patent that? Is it so important I asked myself? Well, yes, as I learnt later. If you give people the opportunity to buy something with just one click it is much easier, you don’t have to go through check-out so people can’t backfill with logic in the buying process. You’d think that people would normally buy the things they put in their cart. However, 68% of the shopping carts is abandoned. Amazon made the one-click-button so it becomes an impulse buy and the time of backfilling your buy is reduced to none.
                E-commerce blew up in the last decade, competing on price is almost impossible because there will always be someone who can do it cheaper. I love it, never paying too much again. But I abandon my shopping carts as well, my thought behind it always was that you weren’t sure about the purchase. However, what I found while doing more research was not this. It contributed, but the number one spot was stolen by something else; shipping costs. Design for founders found that 81% of the people who shop online think free shipping is important, just because we feel that we’re paying for something we don’t get. Shipping costs are becoming so important that we behave irrational when we’re around them. Ask yourself, how many times have you bought something extra you didn’t really need just to get over the amount which was required for free shipping. In the end the total amount at checkout is most likely higher than you had before. And what did you get extra? Well most likely something you didn’t need. 

Old boss, I've got something for you!

For one of my classes I had to read a book which was about nudges, aspects in the choice architecture which alters an individuals’ behavior in a predictable way. Yes, a scientific way of saying that there are some things in life which alter your behavior just like others want it. An easy example is a men’s urinal. Most of the times there is something to aim at, like a fly or something else which is clearly visible. The aim of this little thing in the urinal is to make you focused and prevent pissing outside of the urinal. A little thing which alters your behavior in a predictably way.
                The day we had a test about this book the tables were placed in a circle, which is never the case as the teacher liked an “environment where creative ideas can flow freely”. So normally we would sit in small groups all over the class, but not on the day of the test. Which was actually a gift for the test, as one question was to give an example of a nudge. As nobody moved any tables, we were sitting in the setting the person who put the tables together created for us, we adhered to a nudge. Well that was an easy question!
                Another nudge I was especially interested in was something to do with revenue in a restaurant. I’ve worked in a restaurant for around two years, it was my last job before I came here. I’ve always been curious why some dishes are ordered more than others, because tastes differ from person to person. Was it because the reviews said good things about them? Was it because they were advertised more often? I still don’t really know, some assumptions but not more than that. When I read some nudges online I saw one of a restaurant, make one very luxurious dish which is quite expensive and make the second most expensive dish the most profitable one. Why? Because customers will buy that one the most, which creates the most amount of revenue for you. When I’m back home, I’m going to sell this advice to my old boss. More revenue for him, more revenue for me. 

Still missing the point

When I was doing research for another class I found another blog about how we should target millennials. I’ve written about this before, but more in a format that we’re overlooked. This blog had some solid foundations in research and related to me. One of the points it touched upon was that millennials dislike and don’t trust advertising. Therefore, the traditional marketers missed the millennials completely and it is one of the reasons traditional advertising never worked.
                As my stay in the U.S. is unfortunately coming to an end, I thought about the first things I saw here and if my expectations were met. Some were, some weren’t. However, one of the main ones which was confirmed is the advertising. During my time here I fell in love with American Football, well at least the highlights on NFL’s YouTube channel. A real game is too long and the advertising is extremely annoying, up to the point that it becomes advertising for the competitor. During a normal game, there is around 40 minutes which consists of the same 20 commercials, I could almost recite 10 of them after a game.
                Clutter and noise are words I’ve learned for this type of advertising, just doing the same thing over and over again and wait until it works. Almost like Edisons optimistic quote “I haven’t failed, I just found 10000 ways that won’t work”, but at least he tried 10000 different things. This is just trying the same thing 10000 times and praying that it works eventually. You won’t reach millennials this way, try something different. Try to make a community, try to make it personal, let them help building your brand. And just so you know, there are 1,8 billion reasons why this would work. 

Sinterklaas and Santa

In the United States, you have Christmas eve as an extra birthday. In the sense that you’ll get presents you wanted since your birthday. Of course, it is for a different reason, but that doesn’t matter at this point, because we’re looking through the eyes of little kids who value only one thing; presents! In the Netherlands we have something similar, called Sinterklaas. It is the same concept as Santa, but with an actual story to back it up. The story is altered a lot, but Sinterklaas did actually exist. He was a priest in Turkey. But as we grow older we know he is long dead and your parents provide the gifts for you. However, it is still a traditional holiday and in the end for young and old. So, as we grow older we still make rhymes and give presents to each other. The setting is only a little bit different, the rhymes become funnier and more insulting. We celebrate it twice, with friends and the other time with family. And finally, games are made up.
                One of those games involves a dice and a big pile of presents in the middle. Beforehand you arrange a maximum price for the gifts and when the evening has come, you just throw them in the pile. A certain number on the dice gives you the option to pick a present from the pile, the earlier you roll that number, the most choice you have. After all the presents are gone the trading begins, or stealing it depends on the rules. With the same dice roll, you can now pick other peoples’ gifts or trade them with others. This brings a whole new aspect to the game, loss aversion.
                For the ones of you who have read Predicably Irrational by Ariely you know that there is a concept such as loss aversion, we value the things we own more than the same product that we don’t own. For example, if you own a candy bar and somebody wants to buy it you’d ask $5 dollars, but if you were the one to buy it you’d only be prepared to pay $2,50. This concept comes into play when playing this game. When you’ve picked your present from the pile, you’ll get the feeling that it is yours and therefore value it more than the other options. So, when this round starts almost nobody trades their present, the only thing they do is steal, which is fascinating. However, in the end when everything is unwrapped, it mostly comes down to the worst presents you could ever get or something with alcohol involved. Which gets shared anyway. 

Americans and giving

When I came to Montana one of the first experiences I had was going to Walmart. When were heading back from Walmart we had to wait around half an hour before the bus would pick us up and drop us off back home. Not really a long wait, but you’d rather avoid it. In line we started to a lady we didn’t know, a friend and I had a debate if the word “lollies” meant candy in America, which it doesn’t. We only spoke for a couple of seconds, but when we were waiting for the bus she came by and offered to bring us back to campus. I was shocked, nobody back home would do such a thing.
                Before I got to the U.S. I was a waiter, so I’m always interested how much people give in tips. Well, I noticed that the U.S. is tip country. Every place has an opportunity to tip, Walmart, restaurants, gas stations, you name it. If you have to give tips at every place, you’d think that people don’t give much. But you can’t be more wrong! Back home people tip between 5-10%, here they tip at least double that, if not triple! Connecting the number of tips to the experience with the lady I thought by myself, are Americans really that nice, do they just like to give or is there something else?
                I looked up a comparison between what a household in the Netherlands spends on charity, and what a household in the U.S. spends. The results were overwhelming, a household in the U.S. spends around $3000, a household in the Netherlands $400. But is this all because Americans are nicer? When I did my research, it showed that donations are tax deductible, so Americans get a lot of the money back in some way, Dutch people don’t. However, this doesn’t explain all the tips and the difference in donations is just too big to attribute to tax deductions. Therefore, we can conclude that the U.S. is not as individualistic as it seems.  But if you care so much about others, why not invest in education and a good health system together?

Can it get any worse than renting a car?

“False advertising is the use of misleading, false, or unproven information to advertise products to consumers.” (Deceptive Advertising Definition, Consumer.Laws.com). For example, to claim that a certain product has health benefits, but it does not or is unproven. Luckily, most countries have laws to protect consumers from this phenomenon. However, some companies found ways around this, it is not false advertising by definition, but still very deceptive and irritating.
                As we are going to Los Angeles in a couple of days, we needed to rent a car. Which is a total pain in the ass to arrange. First of all, it seems like every company only offers you an acceptable price if you’re 25 or older. Why? Well, they think that if you turn 25 your driving skills magically improve, which I found a little strange. For example, imagine someone who is 23, and who has been driving in busy traffic since he got his driver’s license at age 17. Now compare this person to someone who is 25, but only got his driver’s license for a year and drives once every month. The one who is 25, clearly the worse driver of the two, pays less than half the price the 23-year-old must pay. Bad for the 23-year-old, and bad for the car company, as the 25-year-old probably has a higher chance of getting into an accident.
                But this is not the point of the blog, just a tip. The point of this blog is how tedious and misleading the process of renting a car is. Most of the time, you’ll reserve a car without paying anything or giving credit card information, so you don’t pay until the pick-up of the car. Now keep this in mind when reading the following. First of all, there is the difference in price based on age. Almost all companies ask your age, but some don’t take that into consideration when showing you the “all-inclusive” price in the next screen. So, you’ll never know if you’ll have to pay extra at pick-up. Secondly, taxes are not always included and can add up in the end. Luckily, this is most of the time not much and showed in the end price, which was already “all-inclusive” at step 1, but fair enough. Finally, you have the insurance. The most misleading of them all, just because only one out of the 7 companies we looked at showed an option for insurance. No company ever showed how much the insurance would cost, because you need to pay this upon pick-up. This means that you’ll have no idea how much the car is actually going to cost for the days you’ve selected. Furthermore, insurance is most of the time also based on age, so another unexpected variable is coming into play.
                Still car rentals are allowed with the price of $15 a day for a car, but when you actually come to the checkout screen, even without insurance, the car is $150 for 4 days. I’m not really good at math, but I still know that 4 times 15 is not 150. Renting a car is one of the worst experiences I’ve had in a long time, so please just give us the total price. It isn’t that hard right? Well, maybe you just like to piss people off. 

Millenials vs The Rest

Almost every company wants them, they think completely different compared to the ones before them, and they represent the largest generation the U.S. and the world have ever seen; The Millenials. Furthermore, as the world has become more obsessed with doing research, they are also the most researched generation there ever was. Results are opposite, the Time classified us as “the me generation”, that we are lazy narcissists. On the other hand, other studies showed that we are better at multitasking, are more socially engaged, and better educated.
                There has been a growing trend in education, this is best by CNN Money’s graph.

This graph shows the percentage of millennials with a bachelor’s degree. Quite a difference from the older generations as you can see. But this doesn’t give any proof of the, so called, different choices millennials make, does it? Well, a little bit. We know two things now, millennials are better educated, and millennials are younger. With the help of two extremely influential decisions made this year, I will show you how millennials and older generations are head-to-head.
                The first one being the Brexit. For the ones of you who don’t know, a big part of Britain decided to leave the EU. This was decided in a referendum, which means that the government doesn’t have to obey this result, but in the case of Britain they did. This decision will change the lives of a lot of people, and if you take a closer look at the results something remarkable comes up. If we look at the demographics of people who voted for and against the Brexit, we see some interesting things. Unfortunately there was no possibility to get the image in the blog, but you graphs are on this page The Atlantic Graph. The graphs with respect to bachelor's degree and age are the important ones.
 We established before that millennials are higher educated and younger. From these graphs, you can see that both the degree of education and age were strong indicators of what you would vote. The millennials against the others.

The other example is for most of you a little bit closer to home, the presidential election. It is less strong than the example of the Brexit, but still valid for the head-to-head argument. If we look at the 50 most educated counties, we see a surprising result. We would expect a 50/50 score, as the score of the total election was, but we see something totally different. FiveThirtyEight showed with data from the American Community Survey that only 11 out of 50 counties were republican. I don’t care who you voted for, but this showed us once again that the millennials are head-to-head with the others.

Sharing the economy

Most of the ideas for new blogs come randomly, I see something and I’m like; this is interesting for a blog! However, some of them come from blogs other people write about, which is the case today. I was looking how everyone was doing for a course which I’m taking and I saw a post from Isaac Nelson, link will be down below. He wrote about the sharing economy. Something in which I was interested before, but shoved to somewhere back in my mind by the unbelievable pace of college. I was reading his blog on my smartphone, which unfortunately has a magically broken screen, but that is another story for another day. As I turned my screen off the cracks became more visible and I thought of something my geography teacher once told us; products are not made to last.
                Back then, we were talking about the gigantic amount of waste in the oceans, and how that could have happened. He raised the concern that most of the products can be made to last a lifetime and the only reason for getting rid of equipment should be technological change. Unfortunately, this is impossible, companies make products which are not supposed to last. They are supposed to break down before they become outdated, therefore we will always buy a new product before it should be necessary.
                However, there may be hope! In the form of the sharing economy. By now, probably all of you have heard about Uber, AirBNB, Lyft or Craigslist. All part of a growing trend, sharing what you have for a, almost always lower, fee. One of them has a cheap place to stay, the other makes some extra money by letting you sleep in a small apartment they never use. We are starting to use the objects we possess to its fullest, totally opposite from the other trend mentioned above.

                Are consumers really turning around the sort of economy we have? Or is it just a breeze of fresh air which will soon disappear? In my opinion it is the first, the sharing economy is just too big to be ignored as a change in the economic landscape. However, we are still far away. Oil waste is declining in the ocean, but the pollution caused by general littering is still increasing. Almost all companies are just trying to sell as much as they can on black Friday, giving huge discounts which just stimulates the production economy. Buy, buy and buy some more, most likely you’ll need it because we still make products which break to soon. But there is light on the end of the tunnel, younger people share, share and share some more. They have taught us to turn the world around. Unfortunately, they can’t let go of what they’ve learned in the past and adapt to the new world. Hopefully the change will go faster than the destruction of the earth. 


https://thecollegestudentsbusinessblog.blogspot.com/2016/11/share-share-and-share-some-more.html?showComment=1480372343473#c5349793928387670370 

Gambling is a whole different thing

When I was looking up information for my last blog I stumbled upon something else which was interesting. Yes, it was also connected to gambling in casino’s but covered another aspect of losing, losing money in general. In gambling, there are a lot of interesting irrational behaviors, behavior from which we can learn in the business life.
                The first one being the “Gambler’s Fallacy”, which is the wrong assessment of possibilities. I found myself subject to this at the roulette table. Next to the table most casinos have a screen with the last outcomes. And if you like it or not, you will always look at the last outcome and base your decision on that. You’ll think it matters but the chance of winning will just stay the same, around 47%.
                Another one of weird behavior is the “almost got it” or “near miss”. It has been found that players don’t react with disappointment to a near miss, but with excitement, increased betting and more persistent play. This “near miss” phenomenon can also be translated to different areas, such as soccer. A player will react differently to a shot which goes in the third ring, then to a shot which hits the post or the crossbar. Both efforts are a miss, but the player will get more confidence from hitting the post than from hitting the third ring. So, why do we react in this way?
                In the case of the soccer example, the near miss most of the times gives confidence. This confidence will afterwards translate into a better performance and will result into more goals. However, when gambling the chances stay the same, a near miss will never increase the chance of winning. The only thing it might do is give you more confidence that you’ll win, such a shame you don’t have it in your own hand. 

When losing the same is still different

When I was in Las Vegas a couple of weeks ago, something struck me. A friend of mine changed a 20-dollar bill for 20 bills of 1 dollar to put it into slot machines. A normal thing to do if you want to try out different slot machines, and so he did. But the interesting thing came afterwards, when I asked him; well that was an easy loss, wasn’t it? He didn’t seem bothered at all, “only a couple of dollars” he said. This wouldn’t have been weird if he would have said the same thing when he lost 20 dollars at once at the roulette table, but didn’t. He was bothered at the roulette table losing 20 dollars at once, but he was totally fine with losing 20 dollars’ worth of 1 dollar bills.
                The search on the internet didn’t result in many answers, if you google “losing” the only thing results will be about losing weight, which is another interesting subject, but not for today. The internet didn’t answer my question, so I resulted to books; Predictably Irrational by Dan Ariely. I classified this behavior in the irrational thinking category, losing 20 dollars should trigger the same emotion as it is the same action, right? I was disappointed once again, the only thing Ariely talked about was the cost of ownership. Which means that you give a higher value to an object if you own it rather than when you don’t own it. This concept came the closest, but still didn’t explain all of it. It is still 20 dollars and in both cases you owned it, maybe this would apply if it was money which you already won but this wasn’t the case this time.
                Loss aversion is the theory where this phenomenon is probably a part of.  Research showed that we value avoiding a loss more than gaining an equivalent amount. We’d rather not lose $10 than find $10 on the ground. It is not exactly the same, as in our case it is both losing, but in this case our mind most likely sees it as losing $1 dollar over and over again. This would mean that every time we lose we only get the disappointment of losing $1 dollar. The dollars would stack up, but our disappointment wouldn’t be cumulative. So, if we walked away after losing $20 we would walk away with the feeling of losing only $1, as that was the last bet we lost. 

A new way of learning

One of my least favorite activities, strolling through Netflix to find a new serie. It always takes too long and it is a rare occasion that I’ll find one right away. Although, after a lot of searching I found Lie to Me last week, a serie about a guy who is an expert in detecting lies.
https://www.youtube.com/watch?v=toxVYw_nRus

Lies are detected by so called micro-expressions in the face, little muscles will react to your initial thoughts when a subject is brought up. Therefore, you’ll be able to detect if somebody is lying just by looking for those. The face contradicts the words. Unfortunately, almost every episode starts with a disclaimer that it is totally fictive.

I have always been somebody who was intrigued by getting the truth out of people, so despite of the disclaimers I started to study the expressions in the serie and tried them out in real life. No clue if it worked, but I still enjoyed it. While doing this something interesting struck me, education or behavior influence through films and series.

One of the main reasons Dutch people are better at English than Germans and people from France is the way movies are presented. In Germany and France every movie is in their own language, so in an American film in Germany the spoken language is German. In the Netherlands, the language is still English, but they provide subtitles. This is not the sole reason, but it definitely helps. At this point in time I feel that this is still the only big educational gain in movies and series. But what if the only main you must do for courses is to watch a serie during the semester and talk about it in class. Wouldn’t that be great? It should be entertaining as well, but I think this would be a good way to educate.

One thing I’ve seen is that a lot of students experience huge amounts of stress. Education in this way can be stress relieving as well. Series are experienced as stress-relieving and will therefore contribute to a less stressed student. This will contribute a little to a healthier society all together, isn’t that what we all want? 

Do advertisers really think Americans are stupid?

I will first start with an introduction, hello I'm Djurre. I'm an international student from the Netherlands and study for a semester at Montana State University. I'm a business major and a senior in college, when I go back to the Netherlands I will hopefully graduate in June. But enough about me, let's start with the blog.

When you clicked on this blog you would have proably thought "Americans are not stupid?" why would he ever come up with this idea? We were the first people to reach the moon, almost all of the big tech companies are founded by an American and we are the greatest nation in the world! No it is not me who thinks Americans are stupid, but I do think most of the teams who make the commericals you see on TV or on Youtube, as this is the only place I can't block them. 

            Although there are a lot of commercials which assuming the American citizen is stupid I want to take one specific example, Sprint's commercial about their comparison with Verizon. 

https://www.youtube.com/watch?v=UlOZYJ3l9SA

In this commercial they stress the fact that Sprint's reliability is within one percent of Verizons, so still worse but close. To make things easy, I take reliability as the coverage. So the coverage of Sprint is within 1% of Verizons and the reliability of the network is also within one percent. This is probably not the case, but to keep things simple we assume it. The reason why you should choose Sprint over Verizon comes later in the clip, the fact that Sprint is 50% cheaper on most rates. This would be a logical value offering; Almost the same reliability but half of the price, who wouldn’t switch? With this thought somewhere deep in my mind I was working on my understanding of the American culture, watching American football. After a couple of minutes there was a commercial break and Sprint was the first one; 10GB of data, unlimited texting and calling, and four phones for 160 dollars a month. First thing that came to my mind, so Verizon will be 320 a month?! Wow, they really swindle you! Three commercials later it was Verizon’s turn, who also had a horrible commercial by the way, and to my surprise they had exactly the same deal for exactly the same price.
            So Sprint, where did your advantage in price went? Did you watch the prices of your competitors or did you just think 50% seems nice and we’ll go with it. Do you really think that the American citizen is so stupid that he can’t remember that your reliability is close but worse and that the prices of both plans are exactly the same? I was literally baffled by the fact that they advertise with being almost, yes read closely; almost, as good but still asking the same price. Maybe Sprint has some plans which are 50% cheaper than the same plan at Verizon but nobody knows that now, at least advertise those plans! And not the plans which are exactly the same price and offer a worse version of the product.
            Personally I wouldn’t even buy those plans, just because Sprint treats me like a stupid individual. Furthermore, as mentioned above I assumed that Sprints coverage is within one percent of Verizon’s but in real life this is probably not the case, with reliability they most likely mean failures of the network. Which makes Sprint even worse. Finally, I would like to stress the fact that both companise are absolutely ripping you of when comparing it to Dutch rates and in this sense I really feel sorry for you.