I learned a lot of sales and marketing techniques throughout my career. I want to share one with you today that I see a lot in everyday situations … It’s called FUD.
What is FUD?
FUD is an acronym for: Fear, Uncertainty, and Doubt.
Like most sales tactics, FUD was designed to help potential customers. But, when it’s abused or applied in the wrong setting, FUD can be used to take advantage of people — which is what I’m talking about in this post.
Creating FUD Works Like This
Let’s say you’re in sales, and a customer is planning to buy something from a competitor (instead of buying it from you). You could subtly drop a few comments or questions to try and disrupt their thinking. This could possibly scare them out of buying the product from your competitor.
FUD statements are designed to change peoples *feelings* about spending money.
For example, you could say things like:
- “Are you 100% sure that’s the right decision?… What if you’re making a big mistake?”
- “Have you checked all the competitor reviews? Are you sure they are the best provider?”
- “Did you fully read the T&C’s to make sure everything is legit? It would be a shame if you overlooked something.”
When people hear comments like this, their emotions start to flare up. Fear. Uncertainty. Doubt… They start to question themselves and the decisions they’re about to make.
This was the dirty and ugly part of sales that I never liked. You can see how this can easily be abused as a strategy to lie or spread disinformation! Even if the original intent is genuine (like influencing a customer into buying something that is 100% the right thing for them), sparking people’s emotions like this is dangerous and can lead to impulse decision-making.
FUD Is Everywhere
After learning about the FUD factor in sales, I started to see it everywhere in regular life. Watching the news, getting my car serviced, or even ordering a meal at a restaurant… The world is full of statements that entice fear, uncertainty and doubt.
Examples of FUD
- While checking out online, you read: “80% of people who bought X, also bought Y… Do you want to add Y to your order?” (This sparks FOMO and makes you want to buy the other thing, because everyone else seems to have done it.)
- A coworker says, “Are you sure it’s a good time to invest in the stock market? Robert Kiyosaki says there’s a huge crash coming!”
- A headline pops up in your Twitter feed: “Investors are flocking to Bitcoin as crypto trading frenzy continues.”
- Your mortgage broker tells you: “Rates like this will not last much longer – lock it in while you still can!”
- A letter in the mail says: “Your benefits are about to expire! We don’t want you to lose your premium status.” (This statement makes you feel loss aversion.)
All of these statements are scare tactics. They put fear, uncertainty and doubt in your mind.
So, how do you tell the difference between a FUD tactic and real advice that’s actually a good thing for you?
How to Identify a FUD Tactic
When you hear or read something that challenges a decision you’re about to make, try these things:
1. Question the source
Does the person, company, or news outlet have an ulterior motive behind their statements? Or do they have your best interest in mind?
Obviously you don’t want to be overly skeptical about everything in life… But, taking a quick moment to question *why* someone is saying something can give you clarity.
2. Ask for the facts
“Oh, the stock market is going to crash? That’s interesting… Please tell me 4-5 data-backed reasons on how you came to that conclusion.”
Before accepting anything as a “fact,” it’s always good to probe a little more. Asking just a few basic questions should quickly identify whether it’s something you should put more thought into or whether it’s just FUD.
3. Emotions vs logic
Remember, FUD is specifically designed to change your *feelings* about things. And as we all know, making decisions based solely on emotions usually doesn’t work out too well (especially financial decisions!).
Before taking any advice, try to filter out the emotions. Fear, uncertainty and doubt can be overcome by research, common sense, fact-checking, and confidence!
There’s More FUD Now Than Ever
It’s been an irregularly rough few years for almost every human on the planet. We’re all very touchy and sensitive about the things we hear and read. Our health, wealth, jobs, homes, politics, and even our toilet paper situation was out of control for a while there!
We have emotions on top of emotions, which makes us extra-susceptible to FUD.
Don’t fall for it. Keep a mature and optimistic mindset. Try to avoid drastic or radical decisions without clearly thinking through your options. Keep thinking long-term and avoid the drama. Just ‘cause everyone else is doing it doesn’t mean you need to get involved.
Have a great weekend, all, and ignore the noisy FUD out there!
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I don’t seem to mind when companies do it but despise when individuals do it.
For example, I really want to get flexible and learn better mobility. I started following this expert on Facebook and finally decided to take the leap and do a free consultation call with him.
Bottom line, he told me if I signed up (before the call ended), the program would only cost $5000. If I didn’t, the program would cost $8000. To be honest, the manipulation worked. He got me to PayPal him $5000. However, after thinking about it for 24 hours, I decided to pursue a full refund. After several back and forth emails, I finally got my refund. He clearly reminded me though that it would be $8000 if I signed up in the future. Because of this, he will never get any of my money. I HATE manipulation!!!!
Another example just happened to me recently and I’d like your take on it. I follow a lady whose had much success healing all of her health problems thru a particular diet. I’m on her email list. Just this week, she decided to increase the price of her “program” (15+ videos).
The current price is $343. On Oct 22, it goes up to $555. On Oct 29, it goes up to $777. On Nov 5th, it goes up to $1000. Then on Nov 13th, the program will no longer be around til next year??
This seems slimey to me. First of all, you can’t tell me the same information on those videos is worth now $600 more in a few weeks!!!
Now again, this slimy tactic does work because I’ve always wanted to get a select few videos and those individually will be going up as well.
Sadly, this just reflects a person’s morality.
I also hate how everyone tries to overprice everything. Just because you can get more money doesn’t mean you should.
Hey Angie, I’ve got a good deal for you… But you need to act NOW… As of today, 1 share of VTI is $230. I suggest people buy as many as they can with their savings because the price is almost certainly going to go higher and higher and higher over the coming decades. :)
Kidding aside, I agree with you. There’s a tasteful way to give people incentives and many people choose the opposite. Glad you got your money back from the paypal guy.
As for the video program, I have no clue about the costs involved. I’d focus on the value it’s going to provide your life and whether you think it’s personally worth it for the price. :)
I made a lot of purchase decisions at work. I didn’t mind competitors bad mouthing each others offerings. I just tried to get to the facts, sometimes they were right and that information was very useful to avoid an inferior or overpriced product. Of course in a work setting you aren’t exposed to FOMO or greed or FUD as much because it isn’t your money and you aren’t buying things for yourself. But maybe because of my work experience I was pretty impervious to FUD and just relentlessly dug for facts instead of opinions. But that’s typical for engineers.
I’m sure you’ve witnessed the whole bag of sales tactics. Glad you were able to cut through the crap :)
Great post on FOMO/FUD and thanks for giving examples of how a lot of headlines/media exploit human emotions to get them to do irrational financial decisions!
I feel like one of the best litmus tests for me when I want to do a financial transaction is to ask myself: “How am I feeling right now?”
If I have feelings of FOMO or anger or I feel like “I *HAVE* to do this trade or else…” – I walk away nowadays. And if I go back in retrospect, it’s almost 100% of the time that walking away is the best decision.
That’s an awesome question to ask yourself. I also like “If I was the only person in this world, would I still buy this?”… It catches me when I want to purchase something just cause everyone else has it or I think it will look cool :)