MONEY TALKS

PART 1: 5 Ways Marketing Influences Spending

Five ways marketing influences spending

Did you know that the market research industry is worth more than a trillion dollars? That’s a lot of cash being spent trying to figure out how to influence people. In the first of our 3-part Mind Your Money series, we’re diving into the ways marketers can sway buyers.

1

Appealing to the emotions. Whether we like to admit it or not, we are emotional creatures, and many of our choices are based on how we feel. Some of the biggest feelings marketers make use of are belonging, status and fear. Think about some things you do to belong—for example, do you wear certain clothing or accessories to feel like part of a group? Do you sport bracelets with crystals and stones to feel as if you’re part of a spiritual community? Do you carry an Apple or Android device? Does purchasing a phone, watch and earbuds from the same brand say something about you and your status? Maybe. Fear is also a great motivator. Marketers are brilliant at telling you that you should be afraid of X, Y or Z, and that only this product or that service will keep you safe— think car safety commercials, security systems, insurance, pest control. Always ask yourself, what emotion is being triggered with this advertisement?

2

Starting with a small commitment. If marketing can get you to make a small commitment, it’s likely to draw more business out of you. A small commitment can look like a free newsletter subscription or signing up to an email list. This commitment can get a little bigger with hassle-free returns, subscription boxes or free trials. An example could be an online eyeglasses retailer that offers to mail out five different frames for “free” so you can try them on. Statistically, you’re likely to keep at least one pair of frames. Essentially, you’ve “committed” to the purchase just by opening the package because, while returning items may be technically easy, it’s still a hassle and shoppers don’t always want the bother.

3

Targeting social media use. Every time you swipe and scroll, you’re giving a platform information that will help determine what to advertise to you. Social media can actually drive up your spending and reduce savings because it’s part of a culture that’s rife with consumption and comparison. A recent study focused on users of a popular social media platform and the impact of social media on spending. Subjects were asked to spend time on the app and then go to an ebay-like auction site and bid on an ipad. Interestingly, participants with stronger social media networks bid up to 30 percent more than they would have paid had they had walked into the store to make the purchase.

4

Employing technology. Think about the last time you were talking to someone about a new product and within a day or two you had ads for that product on your news, email and social media feed. Companies can buy data from big data companies, and notifications are not just favours from companies you like to frequent. They collect your location at that point in time so that, once they’ve collected your device ID, you’ll likely notice increased advertising in your feeds.

5

Applying social pressure. Marketing initiatives can hone in on cultural spending expectations, such as shelling out three months’ salary for an engagement ring or buying a Mother’s Day gift. Even back-to-school spending, which used to include small items like binders, paper, pens and pencils, now encompasses more expensive technology. This has a significant impact on families that could equate spending on the latest gadget with creating greater opportunities for their children. When you feel pressured to shop, consider challenging the situation and making a decision that works for your budget. When you’re aware someone’s trying to sell you something, you can have a conversation with yourself about sticking to intentional purchases.

Understanding how much impact the marketing industry has on consumer spending will help you make better purchasing decisions.

STACY YANCHUK OLEKSY IS DIRECTOR OF EDUCATION AND COMMUNITY AWARENESS AT THE CREDIT COUNSELLING SOCIETY.