After all these years, why do people get excited about Black Friday? And why did the excitement continue to grow as the days got extended to include Small Business Saturday, Cyber Monday and Giving Tuesday? It seems like the excitement would have fizzled out by now and the annual sales would lose their luster.
As it turns out, this grouping of sales is perfectly aligned with the way our brains are wired. And while holiday deals aren't a good strategy for every business, if you are doing one this year, understanding why the brain of your customer is wired to love it could help you be more successful in this sale (as well as any others you run throughout the year).
According to a 2015 paper from Organizational Behavior and Human Decision Processes, when timed pressure is applied to the decision-making process, people's risk preferences actually reverse. Essentially, while people are generally wired to avoid risk, applying timed pressure actually makes them become more loss averse instead.
Regardless of the time of year you offer a deal, the timing should be limited. Beyond that, the limited time needs to be front and center. You know the clock on the Ticketmaster website ticking away the time until your seats are released to the next shopper? That isn't there by accident or happenstance. It changes your perspective on the buying process and makes you want to take action to avoid losing out on a deal.
There are a lot of sales out there claiming limited quantities available, but most people know there is usually enough for a reasonable group of buyers. Black Friday is a whole other story. When doorbuster deals are only available for a select few, being in the know and jumping on opportunities is paramount for bargain hunting success. Scarcity is linked to value in the human brain, which is why one-of-a-kind items claim such high prices at auction. This concept holds true when shopping for deals. The customer's brain says, "less available means it must be a great deal; I should act now."
Many companies worry about having too little available and how some customers might not perceive that as fair. While that is a consideration to keep in mind, scarcity drives value for all sorts of items and encourages people to buy. Consider Costco, a retailer known for limited quantities at its low prices. Many people have a mindset of "if I like it, buy it" because they know it might not be there when they come back tomorrow. Sure, some items get returned, but I'm guessing Costco is on the winning end of that deal.
Consider the thrill of Black Friday deal shopping. You might start planning weeks in advance, checking websites and the mailbox for the deals to be announced, waiting in line and hoping to get as much bang for every buck, and then finally having all those items in hand. This buying process--the joy that comes from it--is fueled by dopamine.
When you think through that story, when do you think the most dopamine is released (i.e. when is the brain getting the most enjoyment out of the process)?
- When planning begins
- Searching through the sales
- Getting the items
It turns out, that getting all the things is where the release of dopamine...stops. The thrill for the brain is in the anticipation. All the build up and excitement is what the brain loves, and having the sales around year after year only adds to that thrill. Giving people a reason to be excited and anticipate your sale is a huge benefit to the overall enjoyment of the process.
Consider the movie industry--they get customers excited and buzzing with anticipation far before films are released. Coming attractions and movie posters, interviews on talk shows-- they are all a tool for building anticipation and releasing dopamine in the brains of potential movie-goers. Apple also used this tactic with the announcement of Apple Card, Apple TV Plus and more earlier this year. If your business has a history of only talking about sales once they are live, try incorporating a little anticipation next time instead. It might just add some Black Friday magic to your promotion.
When looking at your sales throughout the year, consider the trifecta of brain benefits present on Black Friday. How could timed pressure, true scarcity and anticipation change the game for your business?