Every time you interact with a business, you’re trading something of value for something of lesser value from them. If that were not the case, then the business could not continue to operate. Businesses cannot make a profit if you’re getting equal or greater value from them.
So, every time you use a product or a service, it’s worthwhile to spend a moment or two asking yourself the simple question that titles this post: what’s in it for them?
Let’s take television, for example. Obviously, television stations make their money by selling ads during the program. Usually, those ads together sell for more than the program costs to air, so the business makes money.
Why do companies pay for ads? Again, they wouldn’t pay for the ads if they didn’t feel they got more value out of them than they’re putting in. They pay for those ads because they’ve shown time and time again that customers buy more of a product if it’s advertised. Advertising, on the whole, makes money for the business.
“Aha, but I don’t watch ads. I’m smart. I use a DVR to fast forward through commercials.” That might have been a good idea a few years back, but the television studios have become much smarter, too. They now insert products all over your television shows. Notice the big Apple logo on that person’s laptop. See how that person is using a smartphone with a huge shining Sprint logo at the bottom? That person is driving a Ford Explorer! These are all advertisements, right inside the program.
“But television doesn’t cost anything!” It does. You pay with your time and attention, and advertisers use that time and attention to increase your recognition of whatever they’re selling. For them, this is a net gain, as they make so much more in sales if they advertise that it makes up for their costs. If they’re advertising, people are buying.
This same type of thought process goes into almost everything that you do and virtually everything you spend money on. There truly is no such thing as a free lunch. I’ll use a few common examples.
With coupons, what’s in it for them? Even with that coupon, the company ends up still making a profit in the long run. Even if they don’t make a profit on that specific sale, they’ve put their logo into your home and it’s going to stick in your mind. If you’ve bought a product once, you’ve got a chance of becoming a repeat customer.
What if I stack that coupon with a store sale? The store is offering that sale to get you in the door so you’ll buy other things, and they’re particularly good at getting people to buy more than they come in the store intending to buy. They’ll do things like put the sale item on the far end of the store or make you have to walk past a lot of advertising displays to get to the item.
With free samples, what’s in it for them? They’re hoping that you’ll buy the item, of course. However, even if you do not, they’re also hoping that the positive feeling that you get from trying the item will associate with whatever it is you’re trying and that this might convince you to become a customer now.
It goes on and on and on.
But I’m a savvy consumer. I never fall for this stuff. For many people, when they’re actively thinking about a purchase, such tactics don’t work. If you’re focusing on what to buy, good with your math, and conscious of what constitutes a good buy, you’ll make a pretty good purchase for your needs.
Often, what they’re hoping is that you’ll be making decisions when you’re tired or not feeling 100% or you have a long list. In those cases, you rely on impulse, and impulse usually isn’t the best tool to use in a shopping situation.
So what can I do? There are several things you can do, actually.
First, avoid shopping when you’re not prepared for it. If you go into a store when you’re tired or hungry or feeling down, you’re much more likely to buy things that you shouldn’t. Our family shops less than once a week for groceries, for example, and we usually do it when we’re wide awake and have a relatively full belly.
Next, justify every single thing that you buy. This is the old “ten second rule.” If you’re going to buy something, ask yourself why you’re buying it. If you can’t come up with a coherent reason, then don’t buy it. It’s important to recognize when you’re buying things because of short-term urges, such as “That looks tasty” or “I’m hungry right now” or “I’m thirsty right now.” Those things often result in very expensive impulse buys.
Most importantly, never make a move without a concrete reason that’s not based on emotion. Advertising, politicians, and other entities trying to gain influence over us try to tap into our emotions. They use cute babies, attractive people, sentimental moments, unrealistically beautiful food – anything to make us have an emotional response. The more time you spend actually looking at real information instead of at advertisements and marketing images, the more likely you are to make good decisions. Learn about what you choose to eat and wear and entertain yourself with so that you’re always making better decisions.
We’re all going to fall prey to these tactics sometimes. The key is to reduce how often that it happens.