Finance 101: Needs, Wants, Sizzles, Steaks, and Gremlins
In finance and investments, emotion is a dangerous creature. It’s cute, furry, cuddly, but feed it after midnight, it turns into a Gremlin.
With emotion, we’ve tagged the one thing that salespeople use to lure you in. The same thing goes with advertisements. Ads pepper you with lots of images and sound designed to trigger that emotional part of your brain to “buy it”.
Yet what does buying means? Buying implies two things: you buy because you Need it, or you Want it. Needs are essential to daily living: food, electricity, water, etc. Wants are what people desire: the branded shoes, jewelry, electronic gadgets, and so on. What advertising does is to enhance what people wants, not needs.
Needs generally don’t need advertising, it sells by itself. You will only advertise a Need if you want people to emotionally relate to your brand.
If you want to sell, you’ll always have to tap people’s emotions. In sales, there’s a strategy called selling the sizzle, not the steak.
Say you want to sell an exercise machine. To do that, you need to focus on the positive result as a direct consequence of using the product. Buyers need to see themselves with big muscles or toned bodies and are “sizzled” by the image. With their emotions triggered, it would be easier for them to buy the steak (the exercise machine).
Nevertheless, you really can’t totally remove your emotions when buying. You can’t do that (unless you’re not human). Just try to acknowledge your emotions on your next purchase. Identify if it’s a need or a want. And if you’re about to buy something, ask yourself, were you convinced by the sizzle or the steak? This sort of thinking would at least improve your perspective on proper financial management, and tame that Gremlin of yours.