The quiz on FutureNowInc.com blog that rattled me

You wouldn’t think a simple quiz would make you feel unsafe, would you?
And if it were a topic that you were quite comfortable with, there’s even less reason to feel concern. You’d think so, but that’s not how our brains work. Our brains don’t like to be surprised.

And my brain got surprised at a little past 4:55am this morning
I checked my email, saw a link to the blog at FutureNowInc, and hey, it’s a quiz. I started to answer the quiz, and within minutes I was feeling very disconcerted. And there were several reasons for me feeling a little jittery (and no, it wasn’t the early morning—I work fine at this time of the morning). It was the fact that the quiz was somehow ‘tricking’ me.

Now I know that the quiz wasn’t set up to trick anyone
Jeff and Bryan Eisenberg (who I know personally, and very well too) wouldn’t have set up the quiz to create a fear of ‘unsafety’. They’d have specifically set it up to test the knowledge, and to empower the readers. But when I started getting tricky questions, I bailed out of the quiz.

So what are tricky questions?
1) You’re asked to choose two answers out of four (always tricky).
What should you do?: Always get the client to choose just one answer.

2) You then expect to choose one (or two answers) out of four. But instead, the right answer is all ‘four’.
What should you do?: Avoid ambushing the client. If you’re going to have tricky questions, I need to know at the start.

This post isn’t meant to do a deep analysis on the quiz. Instead what I’m trying to get across to you is that even a simple quiz that contains no real reward (except the thrill of getting things right) can be very confusing. A person who feels rattled by the quiz, may then create a memory of quizzes on your site being tricky. And hence avoiding them.

None of us set out to trick the customer.
None of us set out to make the customer feel uncomfortable.
And yet, in tiny ways, we create a discomfort factor.
And not only does it hinder consumption (I didn’t get past question 3), but it also hinders attraction and conversion the next time around.

Ahem, the quiz. Try it out for yourself. 

 
Dollars work a lot better than FREE when you want a customer to consume a product/service

You’ve been told that FREE works really well.
Well it does.

But only when attracting a customer.
If you really want a customer to benefit, you have to stop the free dole out.
Because the moment something continues to be free, the consumption of those products/services plummets like a rock.

You don’t have to believe me, but you might as well.
Because we’ve tried this concept several times over.

So let’s take a real case study
We used to have free marketing courses at a cafe and we called it ‘BizBrew.’ Each of the Biz Brew courses were complete in every detail. It was the kind of course that you’d readily pay $75-$100 for, without the coffee. I say, without the coffee, because the coffee brewed up a latte, a frappe, or just about any coffee you wanted. And yes, it was free.

Think about it: A free course. Free coffee. And a pretty decent presenter. Would you miss sessions? You’re shaking your head thinking there’s no way you’d miss it, but the converse is true. When given a free option, people turn up sporadically, and then not at all. In fact, we were so sure we were wrong about this concept, that we started a new course series called the ‘Learning Rock’. While every session of the ‘Learning Rock’ was full, they were filled with 60% of new customers. Only 40% of the customers were repeat customers.*

Then we had paid courses. And 95% turned up for every course. Without fail. Come rain or shine.

So what does this teach you about consumption?
That the concept of FREE is wonderful for attracting customers. That FREE forms a beautiful attraction factor. But it’s only the first step in the sequence of attraction, conversion and consumption. Once a customer has gone through the attversumption steps; once they’ve opted in for the FREE whatever, and consumed the FREE product/service, the next step should be paid.

And that if you truly want to help your customers, you must make them pay.

* Note: We’ve tried this FREE model both online and offline. We’ve tried it both for products and services. We’ve tried it once, twice, thrice, hoping somehow we were wrong in our assessment. And no matter what options, media or method we tried, FREE always failed at consumption stage. It’s not like a paid product/service works 100% of the time. Even when a customer pays, they are not always consuming the product/service. However, the consumption factor is far, far greater when the product/service  is paid for—and especially if paid for in advance.

Conversion fails for simple reasons.

Labour pains vs. Baby
Which of the two would attract you if you were a woman? You’re saying baby, right?

But look around you.
Every stupid marketer on the planet is selling his product or his service.
They’re talking about the benefits of their service or product.
They’re talking about the process involved in using their product or service.

Let’s get one thing straight.
You’re not selling a product or service.
You’re not even selling the benefits and features.
You’re selling the want factor.

The want factor is something that I want.
So let’s take chocolate.
Am I buying chocolate?
Am I buying the features of chocolate? Or the benefits?
Or am I buying the feeling I get when I eat the chocolate?

And yet, marketers don’t sell what people want
They sell their wonderful process.
They sell the ‘labour pains’.

No one cares about your process. No one cares about how you have this grrrreat marketing program, this wonderful system to write better, this whatever it is you’re selling.

They only, care about the baby. 
They only care about profits.
They only care about customers.
They only care about results.

They give a damn about your wonderful method.

So how do we know that to be true?
Give them the customers without the ‘marketing system’.
Give them the results without the ‘wonderful strategy’.
Give them the profits, and watch as they toss you aside, and rush towards the mucho dollars!

But marketers are ignorant. So they continue to sell the ‘labour pains’.

They brand their products and services according to ‘labour pains’.
They write their copy and put in graphics that emphasise ‘labour pains’.
They make their presentations and create their  marketing material around ‘labour pains.’

And customers don’t care. It’s not like customers look at you, and think you’re a dope. They just don’t care about what you’re selling.

Emphasise ‘labour pains’ and you get nothing.
Emphasise ‘baby’ and watch the reaction change instantly.

Your audience may be fast asleep. But then you announce a prize. Or an award.

Blurb.com wakes up its audience from their inactivity!

Nothing quite gets an audience to participate quite as easily as a ‘Easter Egg hunt’
Or a ‘treasure hunt’, or something that offers an incentive of sorts. And Blurb.com (they produce one-of-a-kind-self-published books) has got it right not in the respect of ‘hosting the award’, but they’ve also weeded out the rest of us who ‘don’t matter.’

Yup, it seems to me that Blurb has noticed a trend
They’ve decided that the people who are most valuable to them are photographers.
That if you’re a cartoonist, or a writer, or a whatever, it’s going to take you a lot longer to put a book together, but if you’re a photographer, you’re going to be able to click this morning, and publish this afternoon.
So if they’re going to have an award, it’s going to be for photographers.
Because this specific audience is going to be more prolific, and hey, might as well encourage the most prolific of the lot.

Which of course, bring us back to the original theme of this post.
That awards wake up your audience?

So here are three questions:
1) What kind of award are you planning?
2) What kind of award have you had in the past?
3) Have you had an award that backfired?

Let us know

Barriers detract. But only at first. Because humans don’t like barriers. Not one itty-bit. And so when faced with a barrier, your customer is going to do her best to either get the hell out of there, or to cross that barrier.

But why would you want to make it difficult for the customer to buy?
Good question. And the answer lies in two parts.
1) Where would you make it easy for the customer to buy?
2) Where would you put up a barrier? And why?

You’d make it easy for your customer to buy, at the first stage. So when you get to our main website at http://www.psychotactics.com, you’ll notice that there’s not much of a barrier. You can read about 27 articles free. Then up comes the barrier. If you want to read more, you’ve got to then subscribe. That barrier extends into other products as well.

So if you buy the Brain Audit, there’s no barrier. But if you want to do the Website Strategy Course, or the Article Writing Course, then you’ve got a barrier. Actually more than one barrier. You’ve got to be an owner of the Brain Audit. You’ve got to fill in a form to be eligible to even see the sales page. You’ve got to then pay for the course, and then you run into another barrier–which is to answer a questionnaire.

That’s four barriers, back to back for one course.
What does that do for us? It qualifies the customers. And it makes sure that all the customers are on the same page (that they’ve all read the Brain Audit) and so we don’t waste the time of others on the course.

But what does it do for the customer?
It prepares the customer for what’s ahead both mentally, as well as in terms of content. And that’s very useful for the customer. Plus when you qualify for something, you’re more likely to consume.

And consumption is the most important factor of all.
It’s only when a customer consumes one meal that they get the benefit. And it’s only when they get the benefit of that meal, do they come back for the next, and the next. This factor of consumption, is what works both for the seller as well as the customer. Both win.

And barriers help make that process more powerful.

If someone were to come to your business today, would you let them enter? Or would you put up a barrier?

You’re about to do a presentation.
You could have twenty thousand slides.
Or one manila envelope.

So how could you take that one manila envelope and make a presentation so powerful, that it instantly gets the attention of your customer?
Here’s how: http://brainaudit.com/blog/?p=10

See, free has no value…and yes, it’s going to be a rant…so you can bookmark it.

As I was saying: Free has no value. No urgency. Nothing. Free is frrrrrrrrrrrrree. (Say Furrrrrry)
And you can’t create urgency just by saying ‘Hey it’s FREE.’ And we know that all of us are the same. We go on value, not on price. Yet, heck the price of free is free. So where did that value go, eh?

It just slid down zee gutter.

So when you charge someone $1000 for a workshop, you can be darned sure that every seat paid for is taken. And yet, when the very same workshop, with the very same bells and whistles is offered free, what happens? Who knows what happens? But we can’t depend on ‘who knows’. We have to create our own sense of urgency. And demand. But mostly, control.

Free needs to have opt-in.
Free needs to have rules.
Free needs to have barriers.
Free needs to have urgency.
Free needs to have value.

So how do we create all of the above. Let’s assume you were having a $1000 workshop instead. How would you create opt-in? How would you create rules? How would you institute barriers? How would you create urgency. And finally, and predictably: How do you create value?

But let’s just bounce back to free….
You create opt-in by getting people to commit. If you just send out something, it stays ’something’ and often degenerates to ‘nothing.’ So you have to get the customer to opt-in. When people say they’ll do something, they’re more likely to do it. So get them to say: Yes, I will attend. Because you never know. Rain falls, La neige falleth. Dinner becomes important. Who knows what happens. And freeeeee stays at the value of nothing. But hey, if you’ve committed; if you know you’re taking someone else’s seat; if you know that seat has your name on it; then hey only wild horses will drag you away. This commitment factor alone, ensures more people turn up for your free event.

So how do you create opt-in?
Get ‘em to call you. Or fill in a form. Or fill in a form online. Or write YES at the back of business card. Or tick the boxes at the back of a postcard. Or send you a box of chocolates. Whatever. Just get the customer to respond. To commit. Oui, Ja, Yes I will be there.

But rules? What rules?
Rules are about structure. Structure means the customers know you’re not playing around. That you’re not desperate to get people to sign up. That if them rules aren’t obeyed, them people are going to experience what happens when they break the rules. So yeah, the rules of engagement create value instantly because they create value. And discipline. And everything else that goes with rules.

So when you say:
Rule 1: Print out the email and bring your invitation along–they bring their invitation along.
Rule 2: The class will start at 7:30 pm. You need to be in your seat by 7:02. At 7:05pm the doors will be closed.

Let’s just analyse those two rules. What are those rules saying?
It’s saying: Hey, you committed; now turn up. And if someone who hasn’t committed turns up, and they don’t have their invitation, they’ll be booted out. You’re special. You’re one of us with the ‘printed email.’ You can pass Go. And collect your $200.
The second rule is saying: Hey, we’re committed too. And we’re going to be on time. And that we understand la neige. And we understand le traffico, and all that stuff. And that wild horses won’t keep us away, and shouldn’t keep you away. It’s also saying: If you’re going to be late, don’t bother.

The rules of engagement enable you to stop going insane.
It enables people to follow a system.
It enables customers to be rewarded for coming on time (I detest presenters who wait for ‘late-comers’)
Rules just enable you to do what you do best–instead of worrying about who’s turned up; why are they late etc.
With rules you have boundaries. They have boundaries. So yeah, rules rule.

Ah, barriers: Now why barriers?
In one word: Value. We want what is behind the green door.
Can’t eat that cookie. Can’t drink that Coke. Can’t speak to that bad girl.
Now you want to eat the cookie, drink that Coke and preferably do both with the bad girl.

Free has no barriers. It has nothing. So you create barriers. What kind of barriers?
Fill in a form. Do an interview. Who knows? Make up the barriers as you go.
Walk into a bank today, and ask for a loan. Then stagger home with the mounds of paperwork.
Walk into a company and ask for a job. And see how many barriers you run into.
Go to a rock concert…and yes, I’m babbling. But you know what I’m saying, right?

We want what we can’t have.
And if there’s a barrier, we want to cross that barrier.
So yes, a closed door at 7:05 is a barrier. We stop focusing on what you’re going to offer us, and focus on the darned door. We have to beat the door closing.
And the fact that the client has to put in their phone number and other details on an online form is a barrier. And yes, there will be those who don’t want to fight the barrier. Well, good on them.
Most people will fill in the form. Most people will beat the 7:05pm deadline by minutes. And then watch their face. It will glow with satisfaction of having beat the barrier.

The psychology of us humans is simple. We want what we can’t have. So why deprive us ‘evolved-chimps’ our barrier?

Which brings us to urgency
Urgency means that someone will be shut out.
That the room only has 15 seats.
That the product runs out in 15 minutes.
That this building kabooms in 15 seconds.
Without urgency, nothing moves quite as quickly. And so you’ve got to create urgency.
And urgency is created simply by scarcity.

So in the above examples, you market to 50 people. But don’t (for heaven’s sake) keep 50 seats.
Urgency means scarcity. Scarcity creates momentum. Lack of scarcity creates, “Yeah, yeah, I’ll get down to it.”
So if you’re having an event and have no recording of the event–hey, scarcity.
If you’re giving a presentation that’s the key to getting to the top of Google (and no one knows about this secret)–urgency again.

But you say: I don’t know any secrets. Yeah right! You do know secrets. It’s not the secret that matters. It’s the packaging of the secret that really driveth home that urgency.
So if you run a yoga class and announce:

1) Let’s talk about ‘yoga’ . Now that is kinda boring.
2) We’ll do ‘yoga asanas’ is kinda boring too.
3) But ‘Find out three breathing yoga steps that will help you sleep well tonight (and every night)..shucks, that’s what I want to know.
Packaging creates urgency.
Scarcity creates urgency.
And curiosity creates urgency.

But let’s kill curiosity and go straight to value
You’re still curious about curiosity, aren’t you? See what I mean? We’re gone over the hill and into the meadow of ‘value’, but no. Your station wagon is stuck at curiosity. And curiosity does create urgency, because if you’re going to reveal a ’secret’, people want to know the secret. The ’secret to a sound sleep’ makes me curious, you see.

Ok enough curiosity…let’s really move to value
If you don’t value your event, your product, your whatever…then how will the client value it? Can’t happen; won’t happen. If you simply give away stuff then the customer will either not show up to take the stuff; or show up and have zero-value. So you must, must, must put a price on the material; on the event; on your offering. What’s it worth? How much do they stand to lose if they don’t get it now.

Then mix up all of the urgency, the barriers, the rules, the opt-in, the curiosity.
Stir well.
And watch how something that was free–and pretty valueless–now becomes the object of your customer’s desire.
What’s more, they don’t just want your offering. They want it now. Like yesterday.

And that, my friend, is how you present FREE Smiley

Imagine you sat on a damp chair.
And the water seeped through your jeans.
Right through your underwear.
Enough so you could feel the dampness on your bum.

What would you want to do next?
You know the answer. You’d want to change those jeans. And the underwear as soon as possible.

Obama knows this damp feeling. And he’s hitting one note: Change.

Because yeah, yeah, everyone on the planet wants health insurance, and a great economy and yada, yada. All that stuff is nice. But when your jeans and underwear is wet, all you want to do is change. You don’t care what you change into, as long as you change.

Obama seems to know the real attractor.
He seems to know below all the yada, yada, is the desperate need for change.
And he’s in the unique position to be a complete newcomer. Someone that stands for change.

As a marketer, if you understand what your public wants (despite the yada), then you can give them that word. And you’ll increase your results based on that one word alone. Of course, once they buy into you, you’ve got to deliver. But we’re not talking consumption. Just attraction.

And Obama has attraction down pat.

I wish I said it this eloquently, but Fast Company said it instead. So as you can quite clearly see, attraction and conversion are not enough.

Gorgeous as Apple’s products are, people aren’t buying them for their inherent technological superiority. For half the price of a Mac, you can pick up a PC that does pretty much the same thing. There are MP3 players that produce superior audio to the iPod. The iPhone has Wi-Fi and a beautiful touch screen, but the phone itself is middling, as is its cellular network. Even the security of Apple’s operating system, a theme the company returns to frequently, is overstated: As most hackers will tell you, it’s security-by-obscurity, a function of tiny market share, not inherent uncrackability. The CIO at one major Silicon Valley company told us that Apple’s vulnerability on this front made it unlikely that he would ever switch. (See “iPhone Insecurity” for one security expert’s sobering experience with the iPhone.)

No, it’s the interface–the user’s interaction with the devices–and the exquisite wrapping that have separated Apple products from the great unwashed. And give Jobs his due: He brought the personal computer to market, after all. He has an unerring eye for design and functionality. There’s an intuitive humanity to his machines, and that has helped Apple forge an enviable bond with its legions of fans.

But when you get down to it, the Apple phenomenon is as much about fashion as it is about technology. You might say that Steve Jobs is the Marc Jacobs of computers (minus the heroin), betting the house his products will be, season after season, cooler than anyone else’s. Yet fashion is, by definition, fickle. Lose the buzz, and you’ve got trouble. And for the first time in years, there are signs that Apple is not infallible and that Jobs’s reservoir of goodwill with his followers is not bottomless.

LOS ANGELES (AP) – Radiohead let its fans decide how much to pay for a digital copy of the band’s latest release, “In Rainbows,” and more than half of those who downloaded the album chose to pay nothing, according to a study by a consumer research firm.Some 62 percent of the people who downloaded “In Rainbows” in a four- week period last month opted not to pay the British alt-rockers a cent. But the remaining 38 percent voluntarily paid an average of $6, according to the study by comScore Inc.

Now it’s easy to gloat. But that’s not the point here. The point isn’t about gloating, though you can be sure the recording industry will be stupid enough to do so.

But let’s do an analysis

1) What did Radiohead do right?
2) What did Radiohead do wrong?
3) Why did people pay $0 for it?
4) What are the chances of consumption?
5) Etc questions?

What did Radiohead do right? Radiohead did a lot right. If they wanted the world to know about them, this is the exact way to go about things. There would be thousands, even millions of music lovers (if you want to call it music) that didn’t know about Radiohead. Now they do. And that alone sets it up, for the next level. Because if their music is indeed as good as their fans/and to-be fans expect, then the tour circuit is extremely lucrative.

They could make diddly squat on their songs, and make a fortune on their tours. Is this phenomenon uncommon? Yes, in the recording industry it is. But not in the publishing industry.

Every author knows one thing. Or should know one thing. You make diddly squat for your books, but you make a whack in services and speaking. Radiohead, if they play it right, are now officially in the speaking business. If they sit around and do nothing but curse, that’s their first mistake.

What did Radiohead do wrong?

As I predicted (and believe me, you can do this test a million times, and you’ll almost always get the same result), the payoff was little or nothing. People have no value, unless there’s value specified to them.

And the reason why people paid $0, is because they don’t have an understanding of value. But you may protest. You may say: Well, a CD costs $15 or $20 and people know that. Yes, they do. But so what?

You know that a computer costs $500 or $1000. If someone said: Pay what you like, what would you pay?

Your brain is always looking for value. But more than that, it’s looking for a deal.
So you pay what you think it’s worth? No you don’t. You pay whatever you think is a nice deal for you. And a 50% off or a 100% off on an album is a very nice indeed. So hey, people did what came natural to them. They cut a good deal for themselves.

But waitasec. The deal’s not over. At least 2% of those who got the nice deal and didn’t pay, will pay in future, given a chance. So they’ll pay for different packaging e.g. a live concert.

Why? Two reasons: 1) The Reciprocation Principle: 2) The Comfort Factor.
The reciprocation principle is simply wanting to pay back. And just as we have the greed factor in built into us, we tend to reciprocate as well. So if the 2% found the Radiohead album good, they are going to come streaming back to buy concert tickets, and future albums (even at full price). Now is 2% a bit low? Yes it is, but it’s enough to generate profits. And 2% is probably at its lowest.

It could be 5% or 20%. That doesn’t depend on us. It depends on how closely Radiohead has understood its audience and given the audience what they want.

And then there’s the comfort factor. If their songs are way cool, then the audience will sing along. They’ll want to go to their concerts and be comfortable knowing the lyrics and knowing the tunes. Audiences go to concerts to listen to the same song they could hear at home. There’s a reason why. It’s a different experience. And it’s a fun experience. It’s very unusual (even weird) to go to a concert where you don’t know the band, the lyrics and the tunes. So by releasing their album in full, they’re increasing that comfort factor. Plus, it will lead to back sales of their previous records. So it’s not just future sales, but back sales that will kick in as well.
So why did people pay $0 for it?

Well, we already know that they want a good deal. But think about it again. There’s still a risk, right? If I go into the store to buy a Radiohead, I’m going to do some checking around. I’m going to check out some reviews, play some songs, make sure I hear some songs on the Radio etc. And only then would I tend to buy. So I like The Police, and I like Garth Brooks, and I like Jack Johnson. But hey, you’re not going to get me to go like a robot to the store, and simply pick up the new album.

No way Jose.

I’m going to make sure that I’ve got the risk covered, by doing at least some homework. And when it’s free, what’s the risk? Zero. So I’ll take that zero risk, thanks. And I’ll pay zero. I’ll be really grateful, but that doesn’t mean I’ll pay. Besides it makes me look really, really stupid when I’ve paid say: $10 and the dude down the road has paid $0. So I’m going to play smart-ass, and pay $0. Risk. Peer pressure. Hmmmm..

So what’s consumption going to look like? Free is a hard sell. Consumption is higher when something’s paid for, and when that consumption is driven home. In our private studies, we’ve found that consumption is dependent on several factors. Media and free are two of those factors. The medium in play here is mp3 audio.

And therefore is pretty darned good, because it will be instantly playable in the eardrums of most of Radiohead’s audience. The very same medium used for say, Barbara Streisand fans, would probably drop consumption like a rock. Free. Ah, free.

Now that’s a problem isn’t it? Because paid goods tend to be consumed faster, and more often than unpaid goods. So if someone actually did some research between those who paid their $6 and those who paid $0, you’ll find that consumption is much higher with the $6 fans. You may also find that they’re more likely to buy future concerts, audio, video.

The freeloaders aren’t all freeloaders, but a good chunk of them will not pay, and it’s also likely to reduce both present and future consumption. This isn’t an issue about whether or not they will consume.

There will be consumption, because this system of pay as you like is a novelty. But imagine if every band did the same. Then the consumption will drop like a rock, because now we have too much choice.

So when the Internet was just embracing e-commerce, you could have a teleconference and hundreds of people would show up for your free teleconference. When Hotmail launched their free mail service, the masses came thundering through. But launch a free teleconference now, and see who comes.

And launch a free email service and see who comes. That’s consumption for you. And while the consumption may be slightly higher at this point in time, it will–without a doubt–be higher in those who paid vs. those who didn’t pay.

Etc. Questions: So was Radiohead smart? Or dumb? Hey, nice question, but unless they had a strategy, they were just doing stuff because it seemed cool. The future will tell. If you see a rollout of events, and other Radiohead stuff immediately, then they were really smart.

And then again it depends on how the audience likes/dislikes the product. If they put out a top class product, then they’ve got it spot on.

For more um, free psycho-stuff like this above: Go to http://www.psychotactics.com