Freemium: 6 Principles of Influence

Consumers make decisions unconsciously and automatically, according to Robert Cialdini’s book “Influence: The Psychology of Persuasion”. His Six Principles of Influence is about the mental processes that drive consumers to engage with services.

 

 

1: Reciprocation

People often feel indebted when someone does something for them or gives them something.

“The implication is you have to go first. Give something: give information, give free samples, give a positive experience to people and they will want to give you something in return.” — Cialdini

The desire for one to reciprocate explains the effectiveness of free giveaways:

People may immediately feel more engaged and eager to try out a new service, make a donation, or give a bigger tip if they receive a little “goody” first. It’s not about value, it doesn’t need to be expensive or extraordinary, a free download will works well as a cookie.

2: Social Proof

People are influenced by others in their decision making. They are more likely to trust friends or online reviews than make a decision on their own. If their peers are using a service, they likely will follow.

“Laugh tracks on comedy shows exist for this very reason”  – Cialdini

People will trust an opinion of the masses. If it is approved by many, it can’t be bad, the thinking goes.

The same effect can be observed on TV commercials. Those who say: “If our lines are busy, please call again” instead of “Operators are standing by” are found to be more successful. They give the impression that others like the product so much that their phone lines are very busy.

3: Commitment and Consistency

People look for consistency in products.  They do not like to back out of deals or discover “hidden traps”.

“We’re more likely to do something after we’ve agreed to it verbally or in writing” — Cialdini

People follow pre-existing attitudes, values and actions. Honesty is crucial. Brand evangelists give perfect testimonials, the entire staff can too, but they must sound sincere and enthusiastic about the product.

“Getting people to answer ‘yes’ makes them more powerfully committed to an action” — Cialdini

You shouldn’t ask your customers: “Please call if you have to cancel.” Asking “Will you please call if you have to cancel?” gets customers to say yes, and measurably increases response rates.

Age matters

When we get older we value product consistency more. Stephanie Brown published in 2005, a study about the “Evidence of a positive relationship between age and preference for consistency” in the Journal of Research in Personality. It confirms the common prejudice that older people become “set in their ways”.  The only remedy for this is to praise the past decisions. Say they were right then, but now they should move forward. Therefore, companies  must find new ways to connect  people’s old values to a company’s new products, if they are to be successful in selling these products to the older generation.

4: Liking

“People prefer to say ‘Yes’ to those they know and like” — Cialdini

People do favor the physically attractive, and people naturally favor others who are similar to themselves or who pay them compliments. If a salesperson can identify a prospect’s preferences, he can utilize this information to help facilitate a sale.  Also, a seemingly “random” coincidence, like having a shared name, can help make that connection between the salesperson and the prospect.

“One of the things that marketers can do is honestly report the extent to which the product or service – or the people who are providing the product or service – are similar to the audience and know the audience’s challenges, preferences and so on” — Cialdini

5: Authority

People are more likely to believe words spoken by an expert or “authority figure”. Just giving an appearance of authority will increase the chances that others will comply. Business titles, impressive clothing, and expensive cars are proven factors in establishing credibility. This works even when the authority figure is illegitimate.

Testimonials are also effective. People who we recognize as “being like us” will more easily persuade us into making a purchase.

6: Scarcity

Scarcity relates to supply and demand– basically, if there is less of something, then it is perceived as being more valuable. Tout it as rare and uncommon and more people will want it. An example of this pent-up demand is the overnight campers found in front of stores when a new release of a product (e.g. shoes, iPhones, etc.) comes to market.

“The tendency to be more sensitive to possible losses than to possible gains is one of the best-supported findings in social science.” — Cialdini

To emphasize a scarcity in an advertising campaign, the message will contrasts a product’s benefits with “a wasted opportunity”. Urgency is also stressed:

•  “Don’t miss this chance…”
• “Here’s what you’ll miss out on…”

Finally, if a product or service is truly unique, then the marketer must embellish whatever it is that makes it so unique.

 

 

Want to learn more about the Freemium Business Model for your business?

If you are in the Bay Area, join our monthly Freemium SF Bay Area Meetup for a chance to hear world-class speakers and make networking connections! If you can’t make it, you can always catch the summary, video and presentations.