Earlier this week a letter arrived in the post addressed to one of the companies my wife used to run. You can see the single page to the right. Registry Australia provides a private ‘wrap’ service based on the official Australian Securities & Investments Commission (ASIC) business name registration service. At the time of writing the cost of registering your business name with the Australian Securities & Investments Commission (ASIC) is $37 for 1 year or $87 for 3 years. You can see from the right Registry Australia is more than twice the price. So what do you get for this extra charge? Well as far as I can tell - almost nothing. The product explanation page on Registry Australia’s website includes the following:
Register, renew and manage your ASIC registered business names quickly and easily through our hassle free business portal. With email and SMS service notifications.
Underneath this statement is a ‘What’s Included’ section listing the six ‘features’ of the service. The problem is these features don’t really offer much in the value of additional value to justify the price premium above ASIC. Here is the text from the website describing the Registry Australia service in more detail. The text has been reformatted to fit with the style of this article but the words are the same:
Management: Secure online management through the Registry Client Portal.
Convenience: Easy to use system for fast & reliable management of your business.
Registration: Period Register or renew business names for 1 or 3 years at a time.
Premium Support: First class Australian based phone and email support.
Notifications: Automated email and SMS notifications for renewals.
Trusted Security: of knowing you’re dealing with an ASIC Registered Agent.
When you examine the information above it is hard to understand how the service could actually compete with ASIC from a customer value proposition comparison. The Management, Convenience, Registration and Trusted Security elements claimed are either the same or inferior to ASIC’s service. You can deal with the ASIC portal just as securely online. This system cannot be faster or more reliable than the ASIC service because ultimately all the business names have to go into ASIC’s database to be officially registered any way. The period of registration for both services is exactly the same. The trusted agent status is hardly a benefit when you can deal with ASIC directly, with more confidence. This leaves Premium Support and Notifications as the basis for the price difference. But what would you need support for? The only apparent difference is with notifications. Registry Australia sends email notifications and ASIC only sends written ones. It seems Registry Australia has set itself up to be a middle man when none is really needed. Their service seems to increase costs without adding much in the way of real benefits. So it is very hard to see how Registry Australia’s service should have any clients at all when it is so much more expensive than the official government service. But customers are not rational. They are emotional. And this can be exploited.
Every one of us is hard wired with perceptual and cognitive short cuts handed down to us by evolution and honed by our upbringing. Most of the time these short cuts work pretty well. However they can be leveraged to unduly influence decision making. In this case it seems the notice is designed to take advantage of customers and manipulate them towards a poor purchase decision. The notice leverages confirmation bias, deference to authority, loss aversion, risk aversion and contrast.
Confirmation bias is tendency to look for and interpret observations in support of what we already believe. The notice above looks like a bill, not an advertisement. It is the writing at the bottom that confirms this:
This is not a renewal notice issued by ASIC. Registry Australia is a third party provider of business names. This is not a bill. You are not required to pay any money.
This disclaimer would not be needed if the notice did not look like a bill. But because it does look like a bill, many people would be inclined to pay it because that’s just what you have to do with bills. This format also acts to trigger a deference to authority. Not only does this look like a bill - it looks like a bill from ASIC (effectively part of the government). Government demands to pay are more compelling than other demands because the government must be obeyed. It is the law. Most of us do not want to break the law because we have been brought up to respect authority. This desire to conform and comply biases us to defer to authorities. However the notice goes beyond claiming authority status in an attempt to also trigger both loss aversion and risk aversion. It does this with these words:
The business name expired on … and is at risk of being cancelled if not renewed.
Loss aversion and risk aversion are two powerful cognitive biases prone to influence us emotionally rather than rationally. We tend to care more about keeping the things we already have than acquiring new things of equal value. The prospect of cancellation in the text signals the potential for loss. In this case it is highlighting a business name we already have could end up being taken away. Adding to this desire to avoid loss is our preference to reduce risks. Reducing risk is rational, but in dealing with risks many of us are prone to over estimate how great our exposure is and how serious the consequences are. When this happens we get emotional about risk. You may recall IBM’s successful marketing campaign built on the idea of over reacting to an unlikely risk:
No one ever got fired for buying IBM.
This statement implied you could lose your job purchasing a computer system from a different vendor. This statement prompts corporate decision makers to over estimate the risk associated with selecting a rival to IBM. The notice is pulling on similar psychological levers. This effect is compounded by the bold and italic format of the text ‘at risk of being cancelled’. Your subconscious picks up on the formatted phrase because it contrasts to the rest of the text. Highlighting like this can increase emotional cut through, especially if you don’t consciously pick up on it.
Marking out text like this is the visual equivalent of how hypnotists embed meta communication in their verbal scripts. This is like the ad below featuring basketball star LeBron James. James repeatedly says “I wouldn’t tell you to drink Sprite.” Actually his dialog is closer to “I wouldn’t tell you to… drink Sprite.” A variety of visual cues are played out in the ad to mark out LeBron’s command. Sometimes it is written. Other times it is the story LeBron tells. Most of the time he simply uses a very slight pause before he says “drink Sprite” to mark out these words as a subconscious command. The best part is near the end when LeBron says “… I still wouldn’t tell you to drink a cool, clean, refreshing lemon lime Sprite… I’d ask you - you wanna Sprite?”
Most of us are probably not very susceptible to LeBron’s attempts at hypnotic dialog. It’s potentially a different matter with the Registry Australia notice. Imagine going through a stack of bills from the mail in a hurry and not paying close attention. You could easily find yourself going ahead to pay the renewal notice before you really thought about it much. The worst part of this approach is you could receive a notice like this without ever visiting the Registry Australia website in the first place. Our experience is this company simply collects publicly available data from ASIC. Then they send the ‘renewal’ to prompt unwary business name owners to pay some months to a year later.
Leveraging perception and cognitive biases in this way is morally questionable. The notice does not say anything technically untrue. And it would be hard to prove a legal case of false advertising against the firm. But it does seem to try to get potential customers to pay in a somewhat underhanded way. Sadly this approach is not uncommon. Marketing is not supposed to be the system of activities designed to manipulate customers into making poor purchase decisions for benefit the marketing organisation. Ideally marketing is the system of activities designed to get the right product to right customer at the right time and place for the right price. So what should Registry Australia do instead?
They could start by investing in research to understand the pain points customers suffer when they have to deal with the incumbent. It is unlikely ASIC provides this service perfectly for all segments of the market. Some good primary research could yield insights about how to provide a superior service worth paying a premium for. After designing and delivering a better customer experience Registry Australia could justifiably get its marketers to promote these superior differences to ASIC. That would seem a lot better than trying to trick customers into responding to what looks like a bill for a service they may not recall having signed up for. If Registry Australia can’t deliver a genuinely better service than ASIC then maybe they are in the wrong business.
You probably guessed I don’t trust this company to provide any real value given my review of their marketing approach. They seem to be more likely to provide services closer to vaporware. You of course should make up your own mind as to whether or not Registry Australia give marketing a bad name. Or perhaps that should be…You of course should make up your own mind as to whether or not Registry Australia give marketing a bad name.
Robert Dew is a Founding Partner at CapFeather Global with more than 2o years of corporate consulting and university lecturing in Innovation, Customer Strategy and Customer Experience. His PhD related to improving creativity in strong corporate governance environments. Recently he got interested in hypnosis and after a handful of online courses, a Tony Robbins seminar, and reading more than thirty books, he has hypnotised himself into believing he knows something about persuasion.