Monday Memo

A Byte of Knowledge

Most salespeople make a huge mistake...

They talk too damn much.

Yammering on about their product trying to convince prospects to buy.

But here's the thing... one of the keys to persuasion isn't what YOU say... it's what you get your PROSPECT to say.

You see, when you ask your prospect a question, their brain automatically starts searching for the answer. 

And in doing so, they start selling themselves on your solution.

For example, instead of saying "Our product will save you 3 hours a day"...

Ask, "How much more could you get done if you had an extra 3 hours each day?"

See the difference?

With a question, they imagine the benefit for themselves. The idea originates in their mind, not yours. And that's much more persuasive.

So here's your homework...

Look at your current pitch. Identify every statement, every claim, every benefit you're trying to get across.

Now turn each one into a question.

Then watch as your prospects start closing themselves.

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Something to Ponder

Peter Thiel dropped another bomb recently...

He said, "My intuition would be it's going to be quite the opposite, where it seems much worse for the math people than the word people. And what people have told me is that they think within three to five years, the AI models will be able to solve all the US Math Olympiad problems. And that would shift things quite a bit."

Let that sink in. 

One of the sharpest minds in teach is saying that AI is about to turn the tables on the "math people" - the quants, the coders, the data junkies who've been running the show for decades.

Thiel explains, "Silicon Valley in the early 21st century, it's way too biased towards the math people." He even wonders if it's some kind of "French Revolution thing, or a Russian sort of Straussian secret cabal control thing."

Thiel thinks this math obsession is "deeply unstable."

And he's betting big that it's about to get flipped on its head. 

Cause once AI can solve the toughest math problems, what's left for the human calculators? 

Is math headed for the same fate as chess after the machines beat the grandmasters in '97?

Is this the "long overdue rebalancing of our society" that Thiel is predicting?

Time will tell.

(Original Source: Conversations with Tyler Podcast)

We Asked – AI Answered

Our Question: 

" Explain the 'IKEA effect'. How has IKEA leveraged this bias in their business model, and what lessons can other businesses learn from their success?"

ChatGPT's Answer:

The IKEA effect is a cognitive bias where people place higher value on products they partially create themselves. When consumers invest their time, effort, and creativity into assembling a product, they develop a stronger emotional attachment and perceive it as more valuable than a pre-assembled item.

IKEA has masterfully leveraged this bias in their business model:

◦ Flat-pack furniture: IKEA's signature offering requires customers to assemble the furniture themselves, creating a sense of ownership and pride in the final product.

◦ Customization options: IKEA allows customers to personalize their furniture by choosing different colors, finishes, and accessories, further enhancing the feeling of co-creation.

◦ In-store experience: IKEA stores are designed to encourage hands-on interaction with products, allowing customers to visualize how the furniture will look in their homes and fostering a deeper connection.

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The IKEA effect has several psychological underpinnings:

Effort Justification:

• Effort justification is a cognitive bias that occurs when people attribute higher value to an outcome they have invested significant effort in achieving. This bias is rooted in the theory of cognitive dissonance, which suggests that people strive to maintain consistency between their beliefs and actions.

• When customers invest time and effort into assembling a product, they experience cognitive dissonance if they don't perceive the final result as valuable. To resolve this dissonance, they unconsciously adjust their perception of the product's value to justify their effort.

Businesses can leverage effort justification by:

◦ Providing clear instructions and support to ensure the assembly process is challenging enough to require effort but not so difficult that it leads to frustration.

◦ Offering a sense of accomplishment upon completion, such as congratulatory messages or shareable social media badges.

Psychological Ownership:

• Psychological ownership refers to the feeling that something is "mine," even in the absence of legal ownership. When customers participate in the creation process, they develop a stronger sense of ownership over the final product.

This sense of ownership is driven by three main factors:

1. Control: Customers feel like they have control over the outcome of the product, as they have played a role in its creation.
2. Intimate knowledge: Through the assembly process, customers gain a deeper understanding of the product's components and inner workings.

Investment of the self: Customers invest their time, effort, and creativity into the product, leading to a stronger emotional attachment.

To foster psychological ownership, businesses can:

◦ Provide opportunities for customization and personalization, allowing customers to tailor the product to their preferences.

◦ Offer a range of difficulty levels or optional add-ons, giving customers control over the complexity of their creation experience.

◦ Encourage customers to share their creations on social media or within brand communities, reinforcing their sense of ownership and pride.

Self-Expression:

• Self-expression refers to the act of communicating one's identity, thoughts, and feelings through various means, such as choices, actions, and creations. Customizing and assembling products allows customers to express their individuality and creativity.

• When customers engage in self-expression through a product, they forge a stronger emotional connection with the brand, as the product becomes an extension of their identity.

• The desire for self-expression is particularly prominent among younger generations, who value authenticity and unique experiences.

To tap into the power of self-expression, businesses can:

◦ Offer a wide range of customization options, allowing customers to create a product that reflects their personal style and preferences.

◦ Collaborate with artists, designers, or influencers to create limited-edition or co-branded products that resonate with specific customer segments.

◦ Showcase customer creations in marketing campaigns, celebrating the creativity of the brand community.

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Thanks for reading the Monday Memo.

Until next time!

The AI Marketers

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