Entering the piazza, we saw that we had the choice of four restaurants: one that was very busy, two that were moderately busy, and one that had just one couple sitting at a table in the back.

Which do you think we picked?

Here was our thought process:

We couldn’t bring ourselves to consider the nearly empty restaurant. If it were any good, more than two people would have been eating there. We scratched that one.

Then there were the two that were half-filled. One had plastic chairs. That one was out. The other one was cute — a contender.

So it was between that one and the crowded restaurant.

They both had attractive table settings. They had similar menus and pricing. There was no significant difference between the two except that one was crowded and the other wasn’t.

In the less-crowded restaurant, the waiters would be less rushed, the kitchen less pressured. That being the case, we figured we would probably get better service.

But we also assumed that the crowded restaurant must have been crowded for a reason. There was now only one table left. We grabbed it and felt lucky to be there.

How did we decide?

On the face of it, you might say we made a logical decision. But I don’t think that’s what we did. Our logic, such as it was, was more a rationalization of deep-seated impulses. Neurobiologists say that such impulses were implanted in the human brain millions of years ago.

If you want to be a master marketer, you must become an expert at understanding those impulses. Because when it comes to decision making, they are just as important as logic. Maybe more important.

In his classic work Influence: The Psychology of Persuasion, Robert Cialdini showed how successful marketers play on these impulses to persuade prospects to buy.

When K and I made our decision, it involved some rational thought. But that rational thought supported what we knew, deep down inside, we already wanted to do.

Cialdini would say that our decision was based on a combination of “urgency” and conforming to “social proof.”

And that’s what I want to talk about today: why you need to include adequate urgency and social proof in your advertising efforts.

When we mention that Early to Rise has 400,000+ subscribers… or when McDonald’s says they serve 52 million people around the world every day — that’s social proof.

Urgency you’ve seen during one-day sales or when a supermarket offers a specially priced item “as long as supplies last.”

I have written about these concepts before. And I have coached a hundred writers about them. But I find that in many of the promotions I review, they are inadequately presented or absent entirely.

What’s more disturbing to me, I have noticed that I sometimes neglect them myself when I write sales copy.

I’m taking the time to discuss them again today because I am guessing that you, too, may give social proof and urgency short shrift. If you do, your copy is not as strong as it could be. And I’m hoping to convince you to make it a habit to emphasize them in your marketing.

I’m also hoping that by writing this essay something will click in my calcified brain and I’ll remember to employ them in all the marketing campaigns I work on in the future. That will be good for my clients… and it will beef up my consulting fees.

When K and walked into that plaza, we had only one piece of prior knowledge about those four restaurants. K had read that one of them was excellent. And so that was the one we meant to go to.

But guess what?

That was the restaurant that was nearly empty. Seeing it so — surrounded by three restaurants that were doing good business — gave us serious doubts.

The review K read had said the food was excellent but the pricing was a bit high. So why didn’t they have more customers — people like us who were willing to pay a little more for good food?

Since there was no one there but two people at a back table, we were scared to try it. Perhaps the management had changed since the review was written. Perhaps someone had died of ptomaine poisoning the night before. Who knew?

We had reliable evidence (the review) that the restaurant was good. But we ignored it because our instincts made us fearful.

Cialdini would have said that was the effect of social proof — in this case, the negative social proof of its being nearly empty.

In his chapter on social proof, Cialdini says:

“The principle of social proof states that one means we use to determine what is correct is to find out what other people think is correct. The principle applies especially to the way we decide what constitutes correct behavior. We view behavior as more correct in a given situation to the degree that we see others performing it. Whether the question is what to do with an empty popcorn box in a movie theater, how fast to drive on a certain stretch of highway, or how to eat chicken at a dinner party, the actions of those around us will be important in defining the answer.”

Cialdini cites a psychological study in which children with an extreme fear of dogs were cured of their phobia by watching a video of other children playing happily with dogs. After watching the video for just four days, for just 20 minutes each day, 67 percent of the children were able to interact comfortably with dogs. And the results didn’t dissipate over time.

As examples of social proof in action, Cialdini also mentions canned laughter on TV sitcoms and the incessant naming of donors during public radio pledge drives.

Now consider how social proof might play out in an advertising campaign.

You are selling a product that happens to be very good. When you create the promotion for it, you say that it is good and you talk about its benefits for your prospects. But you provide no social proof.

Reading your promotion, the prospect is initially intrigued. But because there’s a lack of social proof to back up your promises and claims, he doubts what you’re telling him. He begins to read everything you have written as potential fluff. He wants to believe you (as all prospect do) but his inner brain (the part of the brain that controls emotional intelligence) is skeptical.

What does he conclude?

My guess: that you have given him no proof of your promises and claims because you have none. And if you have none, that must mean the product is unsatisfactory. So he decides not to buy from you. He has plenty of other similar offers to choose from.

Back to our restaurant experience…

We had eliminated the one restaurant that already had us sold because of a lack of social proof.

Now there were three to choose from. We eliminated the first one because of the plastic chairs. This, too, I would argue, was a decision based on emotional not rational intelligence. It’s been our experience that a restaurateur who thinks a plastic chair is adequate is likely to be one who thinks mediocre food is adequate.

So then it was down to two: one half-filled and the other nearly full.

Both could have had great food. We could have asked people dining there what they thought of it — thus gathering social proof ourselves. But the restaurant that was nearly full was filling up fast. There were a half dozen other couples milling around. If we took too long to make our decision, we wouldn’t have the option of choosing the busiest one. So we opted for that and took the one remaining table.

What, then, was behind our final choice?

It was “scarcity” — one of the factors that creates a feeling of urgency. The fact that there was only one table left made us worry that we would miss out. So we yielded not to logic but to an instinct we had that scarcity equals value.

Again, from Cialdini:

“The idea of potential loss plays a larger role in human decision making. In fact, people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value. For instance, homeowners told how much money they could lose from inadequate insulation are more likely to insulate their homes than those told how much money they could save.

“Collectors of everything from baseball cards to antiques are keenly aware of the influence of the scarcity principle in determining the worth of an item. As a rule, if it is rare or becoming rare, it is more valuable.”

To illustrate the impact of scarcity, Cialdini cites a study in which the owner of a beef-importing business uses one of three prepared sales pitches with his regular customers, wholesale buyers for supermarkets: (1) his standard sales pitch; (2) his standard sales pitch with a bit of information about an upcoming shortage of imported beef in the next few months; or (3) both of the above, as well as an aside that this information about the shortage was not well-known.

The buyers given the second version of the sales pitch bought twice as much as those given the standard spiel. And the third group bought six times as much.

After ordering our meal, we asked our waitress why our first-choice restaurant was empty. (It was now completely empty.) We expected to have our suspicions confirmed — that since that glowing review was published, something had changed. But that is not what she told us.

She said, “I don’t know. But that’s the way it goes here. One night we are very busy and the next night it is someplace else.”

“What do you think accounts for it?” I asked.

“The one that gets the earliest customers usually is the one that fills up,” she said.

So there it was.

Our first choice probably had the best food, but it was now empty because everybody but one couple had come to the same conclusion we had. Like us, they probably made a decision based first on a lack of social proof and second on a feeling of urgency created by scarcity.

If I were the proprietor of any of those four competing restaurants I’d make sure that my place was always full by doing three things.

• First I would rope off all of the back tables and leave them unset.
• Then I’d let my regular customers know that if they came by early in the evening, they could eat for half price.
• And then, as the tables started to fill up, I’d gradually open up more by moving back the rope.

By taking advantage of the principles of social proof and scarcity, I would ensure that my restaurant would attract a continuous stream of customers.

As expert marketers we have an obligation to do the same with our advertisements.

We must, of course, make sure that every promise and claim we make is backed up with factual proof — the results of scientific studies, statistics, that sort of thing.

But we must provide social proof as well. That would include endorsements by trusted authorities and testimonials from satisfied users.

And don’t forget urgency. Urgency can be created in many ways in an ad — but the strongest way is based on scarcity. You must let the prospect know that if he wants the product you are offering at the price you are offering, he must act now.

So there you have it: two extremely important advertising principles. Make yourself a promise that you will pay them heed. I am making that promise to myself as I write this.

[Ed. Note: Social proof, urgency, and scarcity are key psychological motivators that every marketer must understand. But you can't fake them in your advertising. They must be real or they won't be believed. And they won't work if you don't "back them up" with:

• Quality products desired by the market
• A way to build your customer list
• Procedures for testing products, marketing channels, and advertising messages
• Good copy that stirs buyer emotions

And the list goes on...

The ETR Perfect Home Business Quick-Start Kit covers all those bases and much more. It’s basically a start-up guide for would-be online entrepreneurs who are not sure what their first step should be. And it works for businesspeople who are struggling because they made the wrong moves early on. Whether you have an idea for a business... have no idea other than you know you want to work for yourself... or are hoping to jumpstart your career... check it out.]
This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.

2 your online success, Dirk

Related posts:

1. How to Write Well: The Big Idea and Clarity
2. The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
3. Know your “star customer” to boost your online success in 2010

So you finally got around to starting your website or blog, and you’re on your way to Web stardom. Hopefully, you’ve included some great content that your visitors will find valuable and want to keep coming back for. If you’re smart, you’ve also tried to include content that will attract new visitors. Now, how do you measure the results of all your hard work?

Answer: with Web analytics software. Web analytics software allows you to view information about your website visitors and the way they use your website. With Web analytics, you can find out:

How many visitors your website gets
How people find your website
Which of your online marketing efforts has been the most effective
Which visitors signed up for your newsletter or bought something
Which pages on your website get the most traffic
Where your visitors are located
What your visitors use your search box for
And much, much more.

Once you have all this data, you can use it to create new content, come up with new product ideas, refocus your marketing campaign, and target new customers. The more you know about who is (and isn’t) using your site and how they are using it, the better you can communicate with them. And more communication is your ticket to more sales.

Most of the Web analytics solutions available today will provide you with similar types of information about your visitors and website usage. Some purveyors are Google, Omniture, and Coremetrics. At ETR, we use Google Analytics (google.com/analytics) because it’s powerful, easy, and free.

You don’t have to download a thing. (You go online to get your stats.) And setup can take less than 10 minutes if you’re fairly comfortable with managing your website. If you’re not, your webmaster can help you with an install in no time at all (and it will be worth it!).

Once you’ve completed setup, you’ll be able to go online and get up-to-date statistics about your website anytime. Additionally, you can save time by setting up reports that are automatically e-mailed to you as often as you’d like. Here’s what a sample report from one of our sites.

Regardless of the Web analytics solution you choose, get something going today. Tracking website usage is critical to measuring results, understanding your website visitors, and growing your business.

[Ed. Note: Rick Maggio is ETR's newest Search Engine Marketing Specialist. The Internet is full of useful tools that can save you time... and make you money. But sometimes they can seem more complicated than they are. Setting up an Internet business doesn't have to be difficult or time-consuming. Learn more about how easy it can be here.]

By Rick Maggio

This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health and secrets to success. For a complimentary subscription, visit http://www.earlytorise.com.

2 your learning success, Dirk

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3. How to build a targeted ezine base for free

Finding a reliable source of side income is practically a “must do” these days. Of course, you may be daunted by the idea of setting up a business, creating a product line, finding a pool of customers, and marketing your product.

The fact is, you can get by with the bare minimum. (I’ll give you a simple way to come up with blockbuster product ideas in a minute.) And in about 5 minutes, you could have access to an army of salespeople eager to work for you.

I’m talking about selling a digital product on ClickBank. Here’s how to get started.

You can write an e-book or develop another type of digital product (software, tutorials, an e-mail newsletter, or video instruction, for example), post it on ClickBank, and generate residual income for months, years… even a lifetime. (Or as long as ClickBank stays in business!)

In 2001, I developed a digital product that is still generating residual income on ClickBank. I receive a royalty check from ClickBank for this product every month. (And that’s not the only digital marketplace I use.)

With ClickBank, you have access to more than 100,000 affiliates who can sell your product for you. And the best part is IT’S EASY!

If you develop a product that resonates with the market – i.e., people buy it – there’s a good chance ClickBank affiliates will be attracted to it and start selling it to their own subscribers, members, and website visitors.

How do affiliates find your product so they can start selling it? You don’t have to worry about that. ClickBank affiliates are a savvy bunch. The most successful ones are constantly scouring ClickBank for the best and most profitable products.

But that’s not all…

You can “jumpstart” the process by advertising your product in ClickBank, hundreds of other digital marketplaces, or on Google, Yahoo! and MSN (to name a few places).

You see… popular (bestselling) products also “move up in the rankings” on ClickBank.

It should be no surprise that the ClickBank program has one of the lowest attrition rates in the affiliate business. The entrepreneurs who sign up as ClickBank affiliates tend to stick with it. I think the main reason for this is because ClickBank pays their affiliate commissions accurately and on time.

Here’s what a typical ClickBank affiliate payout looks like:

Product – Yahoo Cash 4 Idiots
Sale Price - $77
Affiliate Commission – $40.69 plus 60% commission ($40.20) on back-end product

Another reason the ClickBank affiliate program enjoys such a low attrition rate is because it’s so damn easy to make money with it.

So why not consider developing an e-book or digital product to generate residual income on ClickBank?

The best way to research and/or develop a saleable product is to STEAL IT!

Well… not exactly steal it… but COPY one of the products that’s already being sold successfully on ClickBank. I’m not talking about word for word plagiarism. I’m talking about copying the “Big Idea” of the product and putting your own spin on it.

Search all the ClickBank categories and study the most successful digital products. Order a few of those products, too. This is the best way to save time and start making money, because you won’t have to reinvent the wheel. You can also hang out on the ClickBank blog. You’ll learn about the best strategies and products right from the horses’ mouths (ClickBank staff and Super Affiliates).

As for determining what kind of commission to offer affiliates… again, copy success. What are other publishers and writers offering them to sell similar products? Maybe you could offer more. Or maybe less.

When you work with ClickBank, you’ll be in control of your product and retain a lion’s share of the profits. You can earn residual payments for weeks, months, or years down the road – just by submitting one e-book to the ClickBank Marketplace.

And just imagine what would happen if you submit two e-books – or more!

It’s easy to get started. Simply create an e-book based on your area of expertise. (You may want to do a bit of research first, to discover the types of products people want to buy.) To get a good sense of what’s selling on ClickBank, check out its marketplace – where ClickBank offers all the products it has for sale. You can identify the most popular products by sorting your searches by category. (ClickBank also allows you to sort the results based on other criteria – for instance, the number of affiliates who made money on a particular product in the last 30 days.) 

Once you’ve got a digital product to sell, simply visit ClickBank and click “Sell Online.” The instructions for getting started are easy to follow.

By Marc Charles

[Ed. Note: As “King of Business Opportunities” Marc Charles points out, starting a side business doesn’t have to be expensive or even time-consuming. If becoming a digital entrepreneur doesn’t appeal to you, no problem – Marc seeks out easy-to-start side businesses with high profit potential each week in the Liberty Street League.

This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health and secrets to success. For a complimentary subscription, visit http://www.earlytorise.com.

2 your learning success, Dirk

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1. Making Money Selling Other People’s Products
2. How to Use Two Tier Affiliate Programs to Your Advantage
3. The Different Types Of Affiliate Marketing

I have talked about the 80/20 rule in online businesses in this blog before. And we can say the rule applies to almost every aspect of it.

Today I want to focus on your customers. In most cases approximately 20 percent of your customers are creating about 80 percent of your profits.

So it would be very important for the ongoing success of your company or business modell that you concentrate on your best customers. This is where “controlling” comes into the game. In order to focus on your best customers who proved that they value your products, you better know who they are.

It is not enough to kind of have a feeling „Mr X“ and „Mrs. Y“ bought a lot of your products. You have to have the exact numbers to strenghten your future chances. Then you will be able to make individual efforts to offer more products to them. Their doors were open and their purse out , chances are both are not closed for you yet.

So your first action in order to increase your sales in 2010 could be knowing your best customers better and then:

1) offer those your products more frequently

2) offer those the higher prices products as you allready developed a good relationship of trust

3) talk to them in a more personal way, as you have a history with them

4) send them good advice or great stuff you picked up on your way for free to strengthen your customer path.

Doing this and knowing your existing best customers better will certainly bring you a reward

 a) personally in the relation with them

and

b) moneywise in your purse.

Getting new customers is allways good, nourishing your “star customers” is even more important.

2 your learning success, Dirk

Related posts:

1. What Is the Tipping Point for Online Success?
2. Achieve your goals in 2010 with MindMapping
3. Online business – developing products on a “vision” or pre-testing?

This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health and secrets to success. For a complimentary subscription, visit http://www.earlytorise.com.

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1. The 6 Stages of Growing an Internet Business
2. Online business – developing products on a “vision” or pre-testing?
3. Turn Your Hobby Into a Business