Trust me.

Four factors that help con artists succeed are also effective in marketing.

A recent Wall Street Journal article identified four factors that make otherwise intelligent people susceptible to swindles by con artists like Carlo Ponzi and Bernard Madoff.

In the unlikely event that you are an aspiring scammer, please stop reading now. We don't want to give you tools to gull the unwary.

But if you promise to use these four powerful levers of persuasion only for good, read on. Because we definitely do want to give you tools to build your brands. And these behavioral triggers can be as effective in law-abiding marketing endeavors as they are in nefarious schemes.

Situation. Ponzi and Madoff both used situational selling – especially modeling behavior – in their cons. They sold to groups, and created a sense of urgency within the groups to get in on the supposed sure thing. In Ponzi's case it was recent Italian immigrants, in Madoff's it was very affluent, primarily Jewish, members of up-market country clubs. Despite the difference between the two socio-economic groups, the swindlers' basic techniques were the same

  • Present the "opportunity" to other members of an affinity group. This creates a social pressure to accept the offer, since people tend to want to accommodate – and tend to trust – their friends and acquaintances. Carlo Ponzi was an Italian immigrant who bilked his fellow Italian immigrants. Bernard Madoff was a wealthy, socially prominent Jew who bilked his fellow wealthy, socially prominent Jews.
  • Use the group dynamic to make the marks feel they would be left out if other group members took advantage of the offer and prospered while they (the marks) were left behind.

The social pressure and modeling behavior that made Ponzi's and Madoff's "opportunities" hard to resist can be used effectively by marketers:

  • Parties and peer-to-peer selling generate $2.4 billion in annual sales for Mary Kay Cosmetics, $1.9 billion for Tupperware and $3.5 billion for Herbalife.
  • Jagermeister was launched in the United States by teams of attractive Jagerettes visiting bars and to entice highly hormonal young men to try the herbal liqueur. The Jagerettes made it a test of manhood to actually down the apparently vile-tasting stuff.
  • Social media, while not effective as advertising vehicles, are extremely powerful when used for peer-to-peer communications with the brand as an overt peer in the conversation. The most powerful recent example: brand Obama.

Cognition. The rational mind has amazing power. Perhaps because that power is carefully conserved and seldom used. The willing suspension of disbelief which is necessary for the success of plays, films, reality TV and some cable newscasts is also an essential component of swindles.
As we discussed in an earlier article, "Is Neuromarketing Making You Crazy? the instinctive inner brain and the emotional middle brain make many more decisions than the rational outer brain.

Ponzi, Madoff and other pyramid scammers rely on their dupes willingly shutting down rational cognition and ignoring the often-proven maxim: "If it sounds too good to be true, it is." There are two key tools they use to get the victims-to-be to switch their decision-making function from the cerebrum to the cerebellum or limbic system:

  • Identify and promise to fulfill a deeply felt need. In Ponzi's case, poor immigrants wanted to climb up from the lowest rung of the socio-economic ladder and escape the tenements of Boston (and later cities throughout New England and the Middle Atlantic states) to a better life. In Madoff's scam wealthy marks wanted to assure a stable, comfortable income from their investments.

  • Offer proof of performance. The inner brain is impulsive but suspicious. The whole structure of a pyramid scheme is designed to lull those suspicions, as early "investors" are paid with either their own money or the money of people drawn into the scam later.

Both principles work in the less-predatory arena of marketing as well. In fact, they're the basis of some of some very strong success stories:

  • From the dawn of the television era to the present, adolescent and early-twenties males have bought grooming products to become attractive to – and successful with – women. In the 50s Wildroot promised "You'll have a tough time keeping all the girls away" if you used their product. Today Axe Vice makes much more titillating claims. Young men will always ignore massive implausibility in the hope that a grooming aid might make them irresistible.

  • Hair goop and body sprays aren't alone in using a strongly held desire to overcome rational disbelief if the prospect wants the benefit badly enough. Thousands of other brands, from the Home Depot to Extendz, overcome rational skepticism by persuading prospects to believe that their yearnings are actually attainable. Home Depot's "You can do it, We can help" tantalizes the pathologically unhandy BrainPosse principal.
  • Proof of performance used to be the mechanism inside all consumer package goods commercials. A thrilled housewife would hold up two towels and gleefully proclaimed that the one washed in Tide was noticeably whiter, or a survey would confirm that one group had fewer cavities. That same principle is at work today in beer commercials' calorie counts, thousands of ads and commercials featuring testimonials from real users and user-generated content on both social networks and the websites of smart (and brave) companies.

Personality. The Journal article dealt with the personality of the dupe, but personality is a two-edged sword in this case. The personality of the swindler is also important.

  • The ideal personality for scam victims is optimistic and nice. Someone who hopes for the best and doesn't want to disappoint anyone – not even a shill trying to sell them something. Interestingly, the longer a sucker spends with the shill, the more likely she or he is to buy. Not necessarily because the pitch has become more persuasive over the intervening time, but because the sucker doesn't want to disappoint the shill who has spend so much time pitching the proposal.
  • The preferred personality for a swindler is charismatic and similar to that of the victim. Madoff was a generous philanthropist, extremely well-connected in financial circles. His victims actively sought out his acquaintance. Some joined very expensive clubs simply to meet him and gain the opportunity of "investing" with him. Ponzi was a flamboyant, oversized personality. As is often the case with socially disadvantaged groups (and recent Italian immigrants were definitely socially disadvantaged in the early years of the 20th century), group members loved seeing one of their own make it big – and flaunt it. And Ponzi certainly did that. His mansion had air conditioning and a heated swimming pool, almost unimaginable luxuries at the time.

    Personality is critically important in brand marketing. Whether it's the personality of the perceived user, the personality created for the product of the personality of the target audience, personality can facilitate a sale – or kill it on the spot.

    The personality of the perceived users of the product tells potential purchasers if the product is right or wrong for them. It seems as if no one is in the market for a new car right now, but if they were, very few people would consider a Buick. Not because it's a bad vehicle. On the contrary, it's recent quality reports have been quite good. But Buick doesn't make it into the consideration set because it's seen as an octogenarian's car. And even as our society grays, no one wants to be though of as an octogenarian. On the other side of the equation, people line up to pay twice as much for Apple products as for other brands with similar capabilities because Apple products make the user part of an elite sub-segment of society.

Products also have intrinsic personalities. Quick, name a battery brand. You said Energizer, right? The Energizer Bunny personifies both the brand and its benefit. It just keeps on working. Quick, simple, memorable and effective. Wish we'd thought of it. How 'bout the Coke polar bears? Or the Geico Gecko? They give the product character and powerful memorability. And, of course, a likable personality.

Target audiences also have very distinct personalities. One of the most powerful beer campaigns ever was based on targeting the reparative personality type, the personality of the heavy beer drinkers who chug 80% of the suds sold in this country. The "Miller Time" campaign leveraged the reparative personality type's feeling that they're the muscle that builds the country and are under appreciated. The campaign was a paean to their labor and contribution. It resonated so powerfully with the group that it took Miller High Life from outside the heavy beer drinkers' consideration set to a strong number two in the market behind Bud.

  • Emotion. Ponzi's and Madoff's schemes' success was due in no small part to the strength of the emotions they engendered in their target marks:
  • Excitement. Having one's financial wishes fulfilled is pretty exciting stuff. To the poor immigrants upon whom Ponzi preyed, the prospect of escaping from a constant struggle for financial survival and achieving a measure of security and prosperity was very exciting indeed. To Madoff's wealthy "clientele" a generous (but not suspiciously excessive) and steady return on their capital provided a supposedly carefree stream of income for life. Pretty exciting stuff.
  • Fear. Both swindlers' dupes were afraid of missing out on an opportunity. They saw associates getting the apparent benefits and didn't want to be excluded from the seeming bonanza.
  • Pride. The folks who forked over their money to Ponzi and Madoff thought they were pretty smart. Certainly a lot smarter than the silly people who were missing out on the chance to secure their financial futures. They were proud of what they were doing.
    When the BrainPosse principals were neophyte apprentices, we were taught that making an emotional connection between consumers and a brand was much more effective than merely persuading folks that the brand offers a rational benefit. True then, true now. Amor vincit omnia has worked since the days of the Roman empire. Love conquers all. Even tepid affection isn't bad. In fact, negative emotions can be powerful motivators, too. Emotions are certainly effective in marketing.

The bond between a biker and his Harley can only be described as love. And despite their current slowdown as the recession grinds on, Harley has benefited tremendously from the passion and intensity of that bond. Plus they get some free advertising when their customers get Harley logo tattoos.
Loathing is almost as good as love. In 2008 election spots the Obama team always referred to their opponent as the Bush-McCain government. Tying McCain to Bush's dismal public approval was a very effective tool.
Home alarm system commercials are based on fear. The spots always feature an intruder setting off the alarm and being foiled by the system's loud bell. Usually when just a woman and child are at home.
Emotions happen in the middle brain, and tend to overrule the rational musing of the outer brain. If we can make folks love our brands – or dislike the competition – we can sway purchase behavior.

Tools of persuasion aren't good or bad in and of themselves. They're like a speeding car. It can whisk robbers away from a bank holdup or take a woman to a hospital to give birth. The good or bad depends upon the use to which they're put. The tools that swindlers use to ruin their dupes' lives are the same ones we use to sell useful products or to get people to contribute to the United Way.


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