Monthly Archives: July 2020

Psychology and Marketing

Understanding customer needs and motivation

Abraham Maslow's theory on the hierarchy of needs outlines distinct needs on 5 levels, falling into 2 categories. The first category is Basic and includes biological survival needs (such as food, heat and rest) and safety needs (security, freedom from fear, stability). The second category is Growth and includes affiliation (affection, love, a sense of belonging); esteem (self-respect, belief in oneself, esteem of others and reputation); and self-fulfillment (reaching one's potential). Maslow held that lower level needs must be satisfied before addressing higher level needs. And indeed this seems to make sense - I am not very concerned about what other people think of me or whether I'm reaching my full potential if I am starving, homeless or under threat to my life.

From a marketing perspective, it is useful to know which level of need my customers are most focused on. Once the basic needs are met (and in Western society, this applies to the vast majority of people) the next level of need is about love and affection and a sense of belonging.

David McClelland proposed a theory that we are motivated by one of three needs - achievement, power or affiliation.

McClelland's definition of affiliation needs corresponds with Maslow's definition so we can look at them as essentially the same. The principal characteristic of affiliation needs is that they are a psychological extension of physical security needs, i.e. now that I am physically safe, I want to feel emotionally and psychologically safe, I want to feel I belong.

People whose principal need is for power are motivated by a strong desire to feel in control. They manage threats to their safety and security (physical, mental and emotional) by trying to control their environment and activities, including exerting influence and control over others. This drive can make them tremendously attractive and charismatic as they have an air of confidence and invulnerability, seem to know what they are doing, can be very persuasive, and are willing to lead and to take risks. Like affiliation needs, power needs are also an extension of physical security needs. However, in this case, instead of seeking to feel secure by belonging, I seek my security by acquiring and using influence and control.

McClelland's final need is for achievement and this corresponds to Maslow's esteem needs. In a positive sense, a person driven to achieve is seeking to validate and prove his/her worth and value as a person, a co-worker, an employee, a parent, child, friend, or even enemy both to him or herself and to others by what s/he achieves. In a negative sense, my unmet needs for love, affection and security may send me on a life-long drive to conquer the world in order to win the emotional recognition and validation I crave. Alexander the Great is said to have wept when he had nothing left to conquer. He also said "There is nothing impossible to him who will try." He seized the throne of Macedonia at the age of 19, on the death of his father, and succeeded in no small part due to the fact that he had most of his siblings who could challenge him murdered and he ruled until he died at the age of 32. While it is true that he valued and wielded power, I think his drive to conquer and achieve was the dominant force in his life.

These definitions of needs allow us to segment and define potential markets. While housing is a basic need, anything other than basic shelter is meeting a higher level need. People who tend to stay in the same neighborhood throughout their lives are more likely to be influenced by affiliation needs. Those who trade up as their income and/or wealth increases are more likely to be meeting esteem needs.

In attempting to address any potential market, I need to know not only what these people want, but why they want it. What basic and what growth needs are there to be met and fulfilled? Does my customer know what s/he needs, as distinct from what he or she wants? If I can identify which level and type of need my product or service meets, can I also identify what need is motivating my customer?

The Ford F150 has been the top selling vehicle in the USA since 1974. If I want to sell to F150 owners, it would be helpful to know which of power, prestige or affiliation is most important to each and this will influence the offers I make.

Common mistakes in marketing include trying to sell a premium product as a prestige purchase to a customer whose principal motivation is safety and security. Or selling safety to an achievement/performance oriented customer.

Please comment below with examples you have come across of both inspired selling and complete mismatches.

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Numbers Do Not Lie

According to the popular saying there are "lies, damned lies and statistics". Nevertheless, the truth is that numbers do not lie. They can be misstated, misrepresented, and misunderstood but they cannot lie.

Misstatements are most often used to create the impression that the numbers indicate something other than what they actually say. 40% approval does not equal 60% disapproval. 52% of the votes cast is not the same as 52% of the electorate.

Misrepresentation is the active presentation of numbers to advance a false premise. Perhaps the most memorable instance in the recent past was the falsehood that leaving the EU would "save" Great Britain £350 million per week and that Boris Johnson would put that money into the NHS. The sad truth is that Brexit is probably costing the UK £350 million a week and Boris has, strangely enough, not increased the NHS budget by £350 million a week.

Similarly, a 1% increase in interest rates in mathematical terms would be (say) an increase from 10% to 10.1% when in fact the rate will increase from 10% to 11% (a 10% increase).

Misunderstandings are most common. In business, the difference between mark-up and margin. A 25% mark up equals a 20% margin. Profit can mean anything from gross profit (sales less cost of sales), to EBITDA (Earnings before interest, tax, depreciation and amortization), Net profit before tax (gross profit less expenses, excluding taxation), Net profit ( net profit less taxation), Retained earnings (profit after taxation less distributions). And within each of these are the paradises inhabited by chartered accountants and tax advisors.

Many countries require selling prices to include all relevant taxes to protect the consumer from predatory pricing although it boggles the mind that we still fall for the ad that promises we will "save" money by spending money.

One of my services is sourcing traffic for clients. I have some tried and tested reliable vendors to whom I can turn when the need arises. Once in a while, I will test out a new vendor on my own programs. With online traffic the first things to eliminate are bot clicks, followed by human click farms and I invest in systems to track and analyze the traffic I provide from source to destination.

Yesterday, I started a new campaign to test a vendor I have never used before and knew immediately I checked my dashboard that things were not ok. When I dig a little deeper, I see the system has flagged almost 29% of the traffic from that vendor as suspicious and when I dig a little deeper, I can see that 95% of the suspicious traffic is coming from bots and I even have the IP address and registered owners.

Naturally, I will be asking my vendor to deliver the contracted traffic in both quantity and quality. Naturally, I won't use that vendor again. Thankfully, I have chosen to pay for and install the highest level of tracking and monitoring available to ensure that I am able to fulfill my promises to my clients.

The auditor's motto is "Trust, and verify" It hasn't let me down yet.

If you need to track and analyze traffic to and through your site, your offers and communications, I recommend ClickMagick. This is what I use and I couldn't be happier. Click here for the free 1 hour tracking guide.

4 Simple Truths for Becoming Rich

4 Simple Truths for Becoming Rich - Money doesn’t grow on trees, true? Possibly

It costs money to make money, true? Probably

It’s easy to make money, true? Definitely

Truth the First

The trick to becoming rich isn’t in making money, it’s in holding onto it. According to Warren Buffet (a guy who has accumulated a fortune of $89 Billion — $1 Billion for every year of life — and who started with nothing), according to him, RULE #1 is DON’T LOSE MONEY. And RULE #2 is SEE RULE #1. So, the first truth is you can never become rich by losing money.


The exception to this rule is you can get rich by losing other people’s money, e.g. Tesla, Uber, WeWork etc.

Truth the Second

Finance obeys the laws of physics. Money is 100% a mental construct — it doesn’t have a physical component. But it follows natural law.

More out than in is an holistic way of looking at Warren Buffet’s rules above — it doesn’t matter how much income or profit I earn or generate if I expend more than that.

Truth the Third

Instant gratification is the most expensive luxury known to man.

It fuels the multi-trillion dollars per day stimulant and sedation industries, including the trade in legal and illegal drugs, alcohol, nicotine, fast food, sugar (candy and soft drinks).

It is the #1 killer every second of every minute of every day of every week and on and on….

Add up the numbers who die from diseases directly caused by the factors and behaviors above (heart disease, cancer, diabetes, and more) and it’s more than 1 in every 2.

Toss in those who die as collateral damage (gun-related and motoring deaths where drugs and/or alcohol are a factor, secondary smoke) and your touching 4 out of every 5 in the USA.

Learning to delay and defer satisfaction of your wants and desires has immediate and significant benefits — it makes you healthier and wealthier. Practice it for a week and you’ll be wiser as well.

Truth the Fourth

That’s a secret

There are many, many more rules but keeping these 4 will guarantee your success in any business.

Have you ever wondered why 90% of new businesses fail within 12 months of starting? Business statistics will tell you that it’s only 80%, but when you factor in the people who started and failed without even getting as far as registering as a business, it’s over 90%.

Online, it’s closer to 95%. Now, why is that? And more importantly, how do you avoid becoming one of the 95 who fails? Having to shut up shop, lick your wounds and spend the next few years trying to pay down the credit card debt you ran up at 30% interest so now you can hardly pay your weekly bills and your credit rating is shot?

In any business, it’s essential to know what the key metrics are. The prime metric is the excess of money in over money out. If it’s the other way around, you’re losing money and breaking Rule #1. And you wouldn’t believe the number of people in business who have no idea from day to day whether they’re making or losing money. And at the end of the day, week, month, or year when the accountant tots it all up and gives them the result, most have no idea where they actually made or lost money or which products, services, customers or employees contributed the most profit.

Now you’d imagine that it’s all easier to keep track of online. I mean, everything is online and at your fingertips, yeah? But just because it’s there doesn’t mean anyone is looking at it, or understands what it means, or knows how to turn it into actionable knowledge. We’re told knowledge is power and then we drown in data. We’re all suffering from information overload, being bombarded with tsunamis of detail day after day. But data isn’t knowledge. And knowledge isn’t power. Actionable information is useful knowledge and gives us power. Everything else is at best a distraction.

For a business, the most important knowledge to have is Sales. Sales are what turn your activity into a business. No sales = No business. Healthy sales and cash flow are more important than efficiency. A horrendously inefficient business with healthy sales and cashflow can survive indefinitely. An efficient business with poor sales and cash flow is doomed to fail.

Next, after-sales comes to the cost of sales. It’s astounding the number of people in business who do not know how to calculate their cost of sales. In online marketing, selling digital products, it’s tempting to think there is no cost. Sure, it’s easier to “see” the costs in selling physical products but there are costs attached to digital products as well. Costs like advertising, payment gateways, web hosting and platform charges, autoresponders, commissions payable, license fees, etc. Not to mention time.

Most people starting out online have very limited resources, few if any business assets, and are impatient to get going. This can lead to very poor decision making, and we’ve all been there. Paying $’00’s or $’000’s for invisible traffic that left no impression on our subscriber lists, recruiting new subscribers for the vendor whose product we’re promoting without capturing them for ourselves first. Falling for the lure of the latest “winner” only to end up sadder, poorer, and a little wiser.

Russel Brunson says there are 3 types of traffic. The traffic you control, the traffic you don’t control and traffic you own. And your only goal is to make all the traffic that comes your way your own.

Dan Kennedy says that the one who can pay the most to acquire the customer wins. That’s very bad news for new and aspiring internet marketers on tight budgets who can hardly afford to pay anything to acquire a customer. This is how and why most break Rule #1, and all the other rules.

But there’s hope….

If you’re ambitious and want to succeed, want to start and grow your own successful, profitable online business…

If you’re able to delay gratification and work with and within a budget that maximizes your chances of success and minimizes your risk of financial loss and failure…

If you’re willing to be guided and be taught, to learn the right way to go about it…

Then I recommend the Partnership to Success program. I joined in April 2019. At that stage, I had my domain name but no website, no strategy, no idea of where I wanted to go or how to get there. Now, I have a very clear idea of where I’m going, and how my online presence fits into that overall picture. I’m way behind the others who started around the same time as me.

But then, I’ve had other stuff going on (I’m working full time and doing a Ph.D. part-time) and I’ve been happy to work at my own pace. I’m so happy with the program that I’ve signed on for 5 more years and I know, if the past 12 months is anything to go by, they’re going to be fantastic.

Thanks for reading.

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Originally published at on July 1, 2020.