Black Or White

What is the first thing that comes to your mind if you think black and white? You might think about bad and good, war and peace, fear and hope or something else? It is contrast isn’t t it?

Have you ever heard how you can use contrast in persuasion?

I have some fun example. I tried it out and I think you might try it out as well. I bet you will like it as I did. Imagine you are owner of your boutique where you are selling your stuff. Customer enters and he says he wants to buy nice elegant cashmere sweater and 3 buttons black striped suit. You are a person who wants to help what would you offer like a first?

If you showed first suit, you would for sure sell sweater as well. However if you did it reverse, you wouldn’t sell sweater and you might not sell suit as well. Why?  

There is an automatic mechanism inside of human beings which called law of contrast. It means if we can spend 495 Euro on suit and after they offer us sweater for 95 Euro which you wouldn’t spend normally, you would buy it now. You are influenced because of law of contrast. If you spent already 495 Euro, sweater would seem for 95 Euro cheaper than it is. 

You can try law of contrast as well home. You can make a little experiment home. You pour coke (sweet), water (neutral) and salty water (salty) into 3 cups. You drink first coke and after water. How does it feel? I bet water seems to be less sweet than actually is. Now drink first salty water and after water. Water will seem sweeter than actually is. There you can see how you are influenced by law of contrast. 

The first and second lines are equal length, third and fourth as well, yet the second appears to be shorter than the first

Enjoy weekend and try to use law of contrast :)  

Inspire To Make It Happen

Recently I have heard story about entrepreneur and motivation which I like. So I would like to share.

There was an entrepreneur who decided to open business abroad. Reason he came up with idea, that when he can employ people from his country and give them less paycheck than local people who worked in country he can sell product cheaper. Initially it is good plan, because he operated from win to win thinking. It means customers wins, because he buys cheaper, employer wins because he earns more than in his home country and owner wins because he creates business which produce profit.

However there is one single problem. Do you want to guess?

All business model was set up on manipulation. And manipulation brings only short term results, however on long run it will not work at all. He used paycheck to motivate employers to work and price should motivate buyers to buy... What happened is simple. His employers started asking more money, which means his profit margins declined and at end his price end up like his competitors. It meant his value in price disappeared.

What I think he could do different? At first of all he should give people he employed reason to work there. E.g. He could explain that he want to create store where people will come back with pleasure because he believes that people deserves friend in a shop not a seller. He should engage his employers with autonomy to bring any ideas which could lead to growth of business.  He should explain why he opened business. Business is not open because of making profit. It has to be open towards certain cause. And product or service is simple putting a life to cause.

I think there is a difference between motivation and inspiration. We can find motivation inside of us, however we should inspire others. What do you think about it? Imagine how you can inspire people around you?

   

Loyalty Vs Short-term Manipulation

When I walk through alleys of big food chain store I see everywhere just price reduction, promotions. They want me to buy the most but they do not care about me, my needs, and my wants. They don’t know me. However there appears one question. Am I inspired to go back and become loyal to the same big food chain store? I think that I am not. Are you?

Are you interested in coming back every time you go shopping? You walk in, you plan to buy some stuff, but usually you still end up with full cart, with groceries which are not healthy and good for you. In my opinion there is absolutely no culture, no significant difference between them and other big store. They do not make me feel that I am special. I do not feel any reason to come back and being loyal.

I believe there must be a different way how to do it. How build loyalty. People need to be inspired by story of store, by values or by purpose. We should explain difference between what most people do

• Repeat business- it means people do business several times, but only through manipulation (price, promotions, peer pressure, novelty, and aspiration).  
• What loyalty means- people are willing to turn down better offer, price, and product only because they want to keep your business? 

Why I would like to see this? I would feel like somebody care, you know that feeling where you deserve to have your favorite store, person where you come for advice (what to cook, what ingredients buy, what physical exercise to do to feel healthier). You will know that there will be somebody who you can trust. I am not saying that price would be cheaper. However I am sure you would agree with me that the best investment is investment in you.  Wouldn’t be nice to being part of community where you would know that people think same way about food, physical exercises, and healthy way of life. Would you like to belong there? I am honest with you, I would. 

You Want To Improve On, Try This

I am sure you would agree, it doesn’t matter what we do but in every aspect of our life we try to improve on, right? Think about when was last time you did something and you wanted to improve on?  It is simple we are driven by desire to master, autonomy and purpose.

From my own experience I remember that I had to realize this which will help you to master.

Mastery is mindset- when I was working during the last year, I think my mindset belongs between one of the most dedicated to my purpose. I feel that whatever people believe, it shapes what people achieve. I know that you have heard that million times. I heard too. But honestly how strong is your mindset? Only you are the one who knows answer this question. I think I was able to handle it because I differentiate performance goal (like get 2 sales a day) and learning goal (learn how to handle own emotions, sales skills). Learning goal is related to your purpose.

Mastery is pain- I can relate with that. During last year it has shown me that the best predictor for success is not strength, intellect, leadership, knowledge, skills. It is defined as perseverance and passion for long term goals (learning goals). Mastery involves working and working and showing a little improvement, perhaps with few moments of flow pulling you along, then making a little progress and then working and working more. It felt exhausting. But it is not problematic, it is solution. I learned that effort gives meaning to life. My bosses didn’t see results but they were good to me, trying to help me out because I put effort. Effort means that you care about something which is important and you are willing to work for that. 

Mastery is asymptote- With every day effort you can approach it but never reach it. Mastery on one side is source of frustration but at other side source of allure as well. Feeling of joy is in pursuing than just realization.   

So let me know your story and your experience.

Are You Rational Or Irrational?

Nowadays, in the world of perfect information, globalization and low transaction costs, we always try to maximize result. What do you think so? Let s say you get a hint for some horse race, you bet and you win. If there would be way that you can get again hint, you would like to get it, wouldn’t you? I would, that is why we are driven by maximizing results.

I have read in book Drive by Daniel Pink, that winner of Nobel prize Kahneman agreed that economics is study of human economic behavior. However we believe that we had placed too much emphasis on the economics and not enough on the human. I agree since all we learn are just theories, numbers, figures, graphs but nothing about human behavior.

There is a test: Imagine I can give you $10 and you decide whether you want share some, none or all based upon my instructions. So let s begin. If I offered you $6 (which means $4 you would have to give away), you would accept it? If I offered you $5 (you would have to give away $5), you would take it too, right? But what if I offered you just $2 from $10 (you would have to give away $8), would you take it? I wouldn’t, I have to admit. So let me know if you would take it or you wouldn’t.

Experiment says that the most people rejected. But think about it for while. If you took offer, you would have 2 usd more. If you reject, you get nothing. Cognitive mind know $2 is more than $0 but because we are human beings, our desire to have more, desire to win overrides it. That is why human behavior in economics is more important than just economics.

So If I can sum it up. It means

 "we are irrational even we think we are rational." 

So you might thinking I am rational, but are you? Sometimes just let it go with flow because you will not find rational decision anyway. Let me know what you think about.