Dealing with Fear and Greed in Marketing

A very senior sales professional once wrote to me, when I was a wee trainee fresh out of school, “Fear and greed motivates almost all buying behaviour. No, wait, that’s wrong. Take away that word ‘almost’.”

Many of you must have heard one variation or another of that old saw before. Fear and greed are indeed two of the most powerful human emotions, motivators of our actions since caveman days to avoid risk and acquire what looks rewarding. The literature on these two emotional drivers in decision-making is quite lengthy, but it is commonly discussed in the world of investments, less so in marketing and consumer buying behaviour.

Is it true?

Do we truly buy things only out of greed or fear? Throw all kinds of products up in the air and you do find that they fit… if you stretch the concepts of fear and greed a little (ok, a lot). Rice, bread, cooking oil, milk and other necessities? Yes, we buy such necessities out of fear of running out of them. Computers, handphones and laptops? Sure, we buy them out of ‘greed’ for the latest gadgets and what they can do for us. Luxury cars, yachts and planes? Classic greed. Insurance, home alarms and vitamin supplements? Classic fear. The list goes on and on. Try it with the product or product category your company operates in, and you will find fear and/or ‘greed’ is around the corner in some guise or another as a simplification of the buyer motive. (perhaps ‘acquisitiveness’ would be more euphemistic instead of ‘greed’?)

New perspectives on Fear and Greed

If you accept that these two primal emotions play a huge part in consumer buying behaviour, a new book taking a neuroscientific look at fear and greed and their effects on investing may have some valuable lessons for marketers. Jason Zweig’s “Your Money and Your Brain” (Simon and Schuster 2007) highlights several important facets of our brains’ reaction to fear and greed, but for the purposes of this column, I’ll mention two.

First, anticipating a reward is much more powerful than actually getting one. This is the ‘thrill of the chase’ which we are all so familiar with, and this thrill is actually much more powerful than the pleasure received when the quarry is ‘caught’. Functional magnetic resonance imaging (fMRI) scans of experimental subjects show that neuron signals fire more significantly during expectations of payouts than they do when the payouts are actually received. This partly explains why lottery ticket sales increase dramatically when the jackpot rolls over week after week – millions of people become excited at the prospect of winning hundreds of millions (as opposed to mere millions) and the lottery ticket sales skyrocket.

Secondly, another insight with regards to fear is our brain’s inability to measure risk in proportion to probability. Instead, explains psychologist Daniel Kahneman, "we tend to judge the probability of an event by the ease with which we can call it to mind." Hence, people tend to fear nuclear reactors much more than sunlight, even though the worst nuclear accident in history, Chernobyl, killed fewer than 100 people, whereas 8,000 people a year die of sun-related skin cancer.

Local lessons

Brain scans and new books are one thing, but experienced business practitioners probably know these things intuitively through experience. What are some examples of local marketing which address these 2 issues of anticipated reward and fear of the improbable?

A recent buka puasa trip to a well-known local restaurant at Mid Valley Megamall was an interesting experience. Mounted around the restaurant were LCD TV’s displaying mouth-watering videos of the preparation and garnishing of the restaurant’s signature dishes, which no doubt helped customers to decide what to order but also definitely whetted their appetites as they waited for their food. Overall, this provided a much more enhanced dining experience.

As for fear of the improbable, you may notice around KL billboards which advertise the services of a cord blood bank. A cord blood bank stores the cord blood of a newborn baby, as it is rich in stem-cells and can be used for life-saving transfusions in the future in case of diseases such as leukaemia and other blood or autoimmune disorders.

The advertisement features a butterfly on the nose of a cute baby boy, with the words: “Don’t let it fly away, mom!” This single picture succinctly draws attention to the ultimate beneficiary of the service (the baby), the fear of letting something potentially precious and life-saving slip away, and, allegorically, the comparative low cost of making sure that precious thing is saved (just catch that butterfly…).

The approaches of both these companies also illustrate that appealing to the emotions of fear and ‘greed’ is not straightforward, and requires subtlety and creativity in today’s consumer market. For instance, in the case of the cord blood bank, the fear of letting something precious slip away was highlighted, which is something everyone can relate to, instead of the fear of the diseases which might strike our children, which would be much too negative in a nationwide advertising campaign.

Interesting? Effective? A final disclosure: I’m both a customer of that cord blood bank and a regular at that local restaurant, so the strategies must have worked on me!

(reprinted from The Sun, 19th September 2007. e-Paper link here.)