Hi there. I'm Matt. Don't hate the player. Hate the game.1

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Aug 3, 2009 | Comments

An Apple store employee told me to how sell the iPhone with a great success rate. His words:

Man walks into Apple Store.

Man: I’m thinking about getting an iPhone. But I’m not sure.

Apple Employee: Let’s walk over to the phones.

Man: So how does the iPhone work?

Apple Employee: Here. Try it out.

Man: But I don’t know how to use it. I have no idea how to even make a call!

Apple Employee: How do you suppose you make a call?

Man: Oh. I guess it’s this button here…and then I guess I just type the numbers here…

Time passes. Man stumbles upon 50% of phone functionality. Employee has not touched phone once.

This may not seem breathtaking, but compare this to my experience in the Sprint store, when I purchased a Palm Pre.

Me: I’d like to check out the Palm Pre.

Sprint Employee: Let me get the demo Pre…here it is.

Me: How does it work?

Sprint Employee: [Employee holding Pre] Well you swipe this way to move between programs. And this button brings up the menu…[5 minutes later]…

This is the absurdity of teaching a technology via traditional, lecturing techniques. The best way for someone to understand a technology is to experience it themselves (UX experts, hopefully we’re all nodding in agreement). Apple has figured this out and Sprint is in the dark ages. Poor Palm.

But more importantly, it illustrates the power of exploiting cognitive biases. I’ve written quite a bit about biases recently, and Apple employs a very important one: the endowment effect. It says that people value something more when they possess it. Here’s the bias in practice:

  • Group 1: shown an assortment of random, trinket objects: rubber bands, paper clips, beer cozy, post-it notes, etc. They were asked to value each object–all were roughly valued the same.
  • Group 2: shown the same objects, but were told that they could keep the beer cozy after the experiment. The value of the cozy doubled for these respondents. [academic source]

Car salesman are aware the endowment effect–that’s why they let you test-drive the car. As soon as your hands touch the steering wheel, the endowment effect owns. Your perceived value of the car and the salesman’s close-rate increases. In short, sales are difficult when products are behind a glass case (marketing experts, hopefully we’re all nodding in agreement).

Something to think about: are there any other instances of salesman using psychological maneuvers on customers?

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  • When you let people *try* something, you greatly improve the chances they will buy it. It is as though the act of giving it a whirl gives them a temporary sense of ownership. Salespeople have known this for years...witness the test drive at an auto dealership. They work hard to get you behind the driver's wheel, because they know that once you do, you have crossed a small mental barrier toward ownership.

    Likewise, recent research shows that part of the reason the Apple App store is doing better on sales than its competitors (like the Android store) is because there are more *lite* (read: free or trial) versions of the apps in the Apple store. Most users reported that they were more likely to buy an app that they've tried than one they haven't: http://tinyurl.com/la9ak5

  • Matt -- Great post. I found it based on a tweet someone made at StockTwits (www.stocktwits.com) re: Apple.

    Thanks for taking the time to initiate this conversation. I just bought my iPhone two weeks ago and can totally relate.

  • @Dennis: Another great book--Carnegie was definitely touching on our innate self-interest in your quote.

    And the second quote on losing vs. winning hits another cognitive bias--risk aversion. I've read that humans typically value $200 saved equal to $100 lost, or about 2:1 risk to gain. So if asked you to bet $100, you'd want the 50% chance of winning $300 against a 50% chance of losing $100.

    @Eric: Good point on the disconnect on the level of understanding of technology. I guess this is why every salesman is told to put themselves in the "customer's shoes."

    @Marc: Good point about ATT. You're right; this is something specific to Apple and I'm sure every cell phone store still operates on the point & listen mentality.

  • Hey Matt, thanks for reminding me of cognitive endowment. If you think about it, the entire Apple experience uses the idea - from a 30 second sample in iTunes to the entire Apple store experience.

    Still, I don't necessarily look at this as damning for Palm. After all, if you had walked into an AT&T shop rather than an Apple Store, I wonder if the comparison would have held. Sprint's not in a position to own the distribution, and the only reason why Apple enjoys that advantage is because, well, they're Apple.

    Thanks for sharing this and making me think today. Too few days go by w/o me doing that.


  • Giving someone a demo unit to take home to play with definitely increases the possibility of a sale - this is a great tactic.

    I like the fact that the technology explains itself, as it should.

    Any explanation between people will be difficult unless they are at the same exact level of understanding and explaining of technology.

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