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Winning the Customer, Part VII


ROI by Frank J. Rich







By Frank J. Rich



The opportunity in our uniqueness is often the “fanaticism in orthodoxy.” We naturally look for others to relate to well before joining with them or their initiatives. We are more likely to trust a policeman’s urging to protect ourselves in taking cover, than a passerby that offers the same. In both polite and heated discussions over differing opinions, we are inclined to position the opposition in a poor light in comparison to ourselves. The tactic is even clearer today as the nation divides over the iconoclastic model of governing that our new president prefers. Effusive overstatements result—positioning the opposition as grossly negligent. It would appear, after the dust settles, that neither side is without sin. So it goes, when seeking advantage is the only goal.

We warn combatants in the game of commerce: “If one does not establish a position in the marketplace, the competition will willingly supply it.” Effective positioning is the sine qua non of market distinction. We have it either, by our own making, or another’s.

Presenting the enemy for comparison is no scrim or fog to obscure one’s own weaknesses. Rather, it is to establish a rivalry that more clearly distinguishes one from another. Achieving a preference for one’s brand is money in the bank. Whether by “who we are,” “what we sell,” “how we satisfy the customer’s wants, needs, and habits,” and “what we deliver,” positioning is the ne plus ultra of this market math, and creating a rival (for comparison) one of its very effective methodologies.

The discriminating mechanism in humans, largely the work of the prefrontal cortex, relies on two separate networks that inform value judgments (risk vs. reward), and cognitive control that provides a check on ultimate behavior. We may like to eat all of a tasty dessert, but choose not to when considering its potential effect on us.

Goods and service providers seek to create an “in-group,” what we might call customers. Customers find “themselves” in your products, services, or approach, and quickly form mutual bonds that build long-term relationships. Your products may appeal to them on several layers, such as design or peer excitement. They may also satisfy an important need. However, when there is seemingly little advantage to offer, it may be useful to create a physical enemy.

Many small businesses decry the advantages of “big box stores.” They have great inventory, variety, and attractive pricing. They also have poorly trained people, customer indifference, and an impersonal feel, as the turnstile at checkout is in stark contrast to a small business with similar products. The fact is that any small business can find an enemy to position for its disadvantages and easily compete by honing its own unique approach. When we join in liking a product, service, or provider, we form huge biases for those in the group and against outsiders. The enemy can be a belief system, such as “organic,” “sustainable” product, or a model that warms customers, such as a “no-questions-asked” money back guarantee. The purpose in this approach is not to spear the competition, but to associate certain models of likeness with customers while putting distance between you.

Apple Computer was first “the computer for the rest of us,” which created a strongly bigoted following (against giant Microsoft) among youthful, computer literate types. To prove that we can reinvent ourselves to satisfy the needs of customers, Apple refocused on unique, qualifying design and user-friendly products to outdistance the competition. They were qualifying you, the consumer. It led them to become the most valuable company in the world. It could happen to you.

February 17, 2017 |

Winning the Customer, Part VI


ROI by Frank J. Rich







By Frank J. Rich


When hungry, nothing satisfies more than to see food on the table. Americans are often referred to as the “McDonald’s Society” for our insistence on having our food when we want it, how we want it, and where we want it. We have been prepared (by design) to wear this habitual tracking wherever and for whatever we are shopping. This gratification response most easily and quickly overcomes the pain threshold in the buying process. (see Part Ill of Winning the Customer.)

Not coincidentally, efforts to excite “instant gratification” in us are rooted in science. Brain activity rises quickly when anticipating pleasure. When stimulated by a quick meal, or any form of quick delivery, the frontal cortex is very active waiting for the object of the stimulation. The mid-brain, or mesencephalon, ignites when we expect the thing we want to appear right away— the “instant gratification” we respond to best. Our desire for things, driven by want, need, or habit, leads us to consider the route to satisfying them. The process encourages anticipation, which in turn forms the imagery of receiving the “thing” in mind, including its delivery, unpacking, first sight, and exploration. When all take place in the moment, we give ourselves over to a purchase, the deal is “sealed.” This is the very process that prepares both the seller and buyer for a “good customer experience,” and relationship—the two most influential elements of a “retention revenue model.”

Clearly, so-called “brand companies” know the model well. Why else would attach a “2-day FREE delivery” to every “Prime” purchase? Their system design to first sign you up is a kind of loyalty program. Using fundamental behavioral technique, they engage the customer in a “value exchange” with the promise to “deliver” on the promise, to his satisfaction. Consider the model: “wide choices, near 100 percent inventory, quick and free delivery, and guaranteed satisfaction.” It is so simple and prodigious a model that most believe it is uniquely an creation. It is not! The early days of catalog mailings brought us the Horchow catalog, D.A.K. Innovations, Hammacher Schlemmer, Lands’ End, L.L. Bean, and countless others, that helped perfect the model and prove the elemental nuance that ensures success. Add store pick-up, where 40 percent of Home Depot’s online products are bought. Walmart, Lowe’s, Sears, etc., all make a trip to the store an easy way to get product faster; a system that provides benefits far beyond the pick-up of an ordered item. Few leave these stores with only the item they came for.

Why does this model work so well for sellers and buyers alike? Simply, we are problem solvers by nature. When confronted with a problem, the mind and body join on the path to solving it. When we present a want, need, or habit to a seller they do well to start the process of satisfying it, and quickly. Nothing works as well. Thus, the pain thresholds we are hoping to manage in the buying process are much better informed the moment we “believe” our needs are near at hand. Punto y final!

In your appeal to customers, use words like quick, instantly, free, new, in-stock, at your convenience, etc., etc.; keeping in mind the formula that excites buyers to action—choice, inventory, quick and free delivery, and satisfaction guaranteed. If you’re writing ads for others be sure to include a compelling (value) offer to encourage a visit to your website or store. This is where the magic begins. “Nothing happens until something moves.” (Albert Einstein)

February 10, 2017 |

Winning the Customer, Part V


ROI by Frank J. Rich







By Frank J. Rich



Little is better understood than the simple model of market demand by the buying public, its essential influence on trade, and the fundamental equation that joins buyer and seller. Scarcity may be first among the six pillars of market influence, ensuring that buyers will follow market shortages and attractions with the gyro and determination of a carrier pigeon. Another of its essential planks—urgency—has long been the market catalyst to greater sales. Though a well-worn tactic of advertisers, too many lack the behavioral nuances that make this philter work best. The result—buyers sense the false sense of urgency in many products and services, causing a kind of Peter and the Wolf syndrome that has the effect of encouraging them to exit the exchange.

Done well, imputing urgency to the advertising message can add twenty-five percent to sales when the message of concern it raises also includes both “how” and “where” to go to solve the problem. For instance:

Snow is on the way!

Don’t be caught without a good shovel and a bag of ice melt. The following stores have what you need, and some guarantee they will not run out,  even if they have to buy it from a competitor.”

No matter the level of urgency, poor results follow unless the details on how to solve the problem are included. Also, “solutions ads” engage buyers more fully, increasing the memory for ad details. The reason is simple. People dislike threatening news, so they naturally put it out of mind, preferring to believe it won’t affect them. We are not different from the ostrich in this way. When presented with the antidote, we are quick to relieve ourselves of the pain and uncertainty in the threat. When we can take action against the things that threaten us—“Act now or face the loss of product should you decide later,” we put the threat in the path of relief. When I have difficulty finding shelf foods I like to use, I buy them quickly when found, and often buy extra to relieve the panic in a short supply of them.

Consider the casual health offerings of Walmart and drug and convenience chains across the land. At a recent stop at a CVS store in NYC, I was greeted at the door by an employee, whose friendly invitation included an offer to direct me to the shelf location where whatever I needed was waiting for me. The interruption was a welcome efficiency at finding what I needed, without delay. The items I sought were exactly where she said they’d be, which made my stop quick and efficient.

Fundamental to a successful exchange between buyer and seller is the model of “interruption, engagement, informed value, and delivery on the promise.” When accomplished, price becomes a secondary consideration in favor of customer satisfaction in the relationship between people. The method of urgency in a seller’s appeal to buyers should not be the everyday use and abuse of persuasion, nor its “moral” counterpart, suasion. Rather, it is the dutiful addressing of issues facing the buying public for self-selection, and the further information that provides real solutions to urgent alerts. In the end, we do best when able to develop a relationship between people and a good experience for both.








February 3, 2017 |

The Answer


ROI by Frank J. Rich







By Frank J. Rich




Let’s all cheer for … the lottery? In a game of pitch and toss, each hurling is an all-in bet. Win and join the few that can rise above the first person singular and not lose their good judgment and good sense in the use of the windfall (the odds of bankruptcy grow astronomically among lottery winners). Lose and join the multitudes of haters who wish only the squandering of winnings by winners. We are seldom made truly of good wishes for the good fortune of others.

Last year’s Powerball (at this time) at over $1.5 billion, the largest in its history, raises an interesting question. According to the parade of presidential candidates, and most others, the nation faces unparalleled social and economic challenges. Too few citizens are prepared to compete in a complex workplace, pay taxes, afford a home of their own, and enjoy savings greater than $15,000. To revive a slow economy (even though better than most), consumption must increase. This depends mightily on wage growth and consumer confidence in the economy—now and in the future.

Politicians speak of so many ways to answer the call; each branding his model of blaming others and naming the fulfillment that obtains by their handiwork. Oddly, this dance is perhaps the most reliable activity in each—past and present. Missing are real solutions to slow economic growth, a more competitive educational model, equal opportunity, and a trustworthy electorate. Until now!

Let’s solve all of these problems with a simple, sweeping solution that turns into prodigious policy. Follow the math.

Let’s turn the lottery toward the people and not the government. Why? Because the government has already shown it lacks the imagination, the will, and the courage to act on behalf of its citizenry, and primarily for its benefit. If every household were a winner, each week the lottery would turn into an annuity that delivered needed funds for many.

* More would play, knowing that their money would bring back more each week. Invest $2, get back $10. Everyone would be a winner, every week. A $10 billion a week lottery would be common.

* Those that don’t need the extra cash might return it to the lottery commission for distribution to those who do.

* The distribution of wealth would occur without the assistance of government—the marketplace would take its course.

* Consumption would increase as income rose.

* Economic confidence would rise, encouraging risk-taking enterprise.

* The electorate nationwide would work harder to add programs that returned more money to citizens for discretionary funding.

* People would feel connected to an economic system that brings attention to the opportunity to grow and prosper by their own steam, aided in some part by an economic catalyst that has their best interests in mind.

Take 1.5 billion, that’s $1,500,000,000 and divide it by the number of households in America—roughly 100 million. Then send 10 percent of “households” a pro rata share of the total lottery ticket sales. Let’s assume that lottery sales would average $2.5 billion each week, since every household would be a winner over a 10 week period, and then again over the next 10 weeks. $2,500,000,000/100,000,000 = $25, or $125 over the course of a year. A $10 billion lottery would deliver a $600 windfall each year to households, a $600,000,000 shot in the arm for local economies across the nation. Over the course of 10 years a total of $6,000,000,000 (billion) would be delivered into the hands of citizens, a flat distribution to those who need it or not. Just as the Bush Tax Rebate evidenced, many that do not need it would decline it in favor of those that do.

Let’s add the interest earned from America’s retirement funds. Its accumulation over just 2 years would relieve the national debt, according to research. The point: there are creative ways to assist and encourage America to regain its economic footing—and free market systems lead the way. A life well counted is made not of what we get, but what we give.

January 27, 2017 |

Winning the Customer, Part IV


ROI by Frank J. Rich







By Frank J. Rich



The essential element in the exchange between buyer and seller is the person. If we accept each means to express his wants, needs, and habits, no less than to present his identity and to form common ground, then getting to know the one paves the road to an appreciation of the other. Clearly, we are more impassioned of his work after we learn that Beethoven turned deaf while growing his legacy compositions. We also learned that the impediment was less a disability than thought; music is made of vibrating sound waves, and is easily felt. A “C” just sounds different than any other chord, or music would be the repetitive drone of an airplane in flight. Few would enjoy the likeness if applied to us.

It is said that “people don’t care what you know until they know that you care.” Thus, relationship derives from knowing how to enjoy another. This, in turn, requires that we work at it. Another saying: “To have a friend requires that you be one first.” So, vulnerability becomes virtue in this context. Despite the distance and formality of passersby, we feel better when the world reaches out to touch us. Walk up to me with friendship in your eyes, smile, and gait, and I’m likely to respond in kind.

The suggestions are no less the take-away from studies to determine the effect of such vulnerability on the buyer and the seller’s stock price. Admitting mistakes, misunderstandings, learned aspects of product and service to customers, or shortcomings that once accepted can improve customer offerings, etc., were consistently viewed by customers as motivation to select those who admitted their faults over those who hid them. Surprised?

We all know that the dark wind that swept over world economies in 2007 affected business. Fair enough. So, what did the enterprising do? They marched on, investing in the idea that if they did now what the competition refused to do, they would build a future in which the competition could not. Brilliant! It’s a well-worn growth model, but a scary thought in an uncertain moment. That said, when isn’t the market an uncertain reality?

When we excuse our slim inventory, constrained returns policy, price inflexibility, and limited services, though a poor economy can impose such terms on us, we may be revealing an inability to fix the problems we face. The position is not enviable, and most customers will find another to satisfy their needs. Every shop—physical or virtual—desires one thing first: to gather customers to them. This is when the magic begins—when we get to show our special brand of products, service offerings, engagement methods, and retention services. It may be the only moment we have to convince the customer he has found the right place to satisfy his needs. Indeed, to find the identity he seeks in all that he does.

We are never so attractive as when we make it possible for another to contribute to the fullness of our lives, and for us to contribute to theirs. We need only be receptive to encourage this joining. It begins with us, and the rewards are spectacular.



January 20, 2017 |

Winning the Customer, Part III


ROI by Frank J. Rich







By Frank J. Rich



The measure of pain and pleasure may be hidden currency, but these twin pedals of the human psyche are significant players in just about everything we do. As pleasure subsides we are often moved to pain. Equally, we are “moved” to pleasure as pain fades. Though we might not be aware of pleasure in the absence of pain, the level of pain reveals its equal number as it rises and falls. For example, when the first contact lens insertion brings pain, it diminishes by comparison to the pain with the insertion of the second, if also painful. Indeed, pain often determines steps forward or the caution that keeps you in place. Even imagined pain is real enough to keep the spirited from launching over a bridge with only a thick rubber band as insurance against certain destruction.

Not surprisingly, pain is the underpinning of the buying experience. As science (psychographic research) reveals, buyers are categorized by an identity with three groups: the unconflicted (those that are driven to spend by need or convenience, or average spender, 61%), the spendthrift (those with a higher threshold of pain for buying things, 15%), and the tightwad (those that spend less than the average before pain sets in, 24%). Each is a buying animal unto himself, but has in common with the others a pain threshold that moderates his willingness to buy. Learning each buyer’s pain threshold is key to growing sales, especially in a competitive market.

How then do sellers approach each group, and what might they expect in return? The answer is simple in concept but requires the creative resources and the energy to keep at it. The rewards can be significant. Value models, product bundling, and making little things big to the buyer is the trifecta that makes money flow and conditions buyers for greater satisfaction. Importantly, this is not to suggest that sellers manipulate buyers. Make that mistake and you’ll turn potential customers into the “fourth kind,” those that tell everyone they know to stay away from you. It’s the customer of the “third kind” that you seek; the one that becomes an extension of your marketing efforts.

“Value models” restate the price of items, making them appear to be more available. An item costing $2,500, such as furniture today, when offered without payment for one year and no interest, makes new furniture an easy decision. Monthly payments, term discounts, and volume “breaks” all work to chase away the pain in buying. $199/month over three years for a $24,000 car is an extraordinary value, affordable, and easy to assume for most. It’s what has transformed the auto industry. More cars and much greater profits from each car are the results.

Bundling products only makes good sense. Discrete sales are “one-and-dones”; death to NFL football fans. I have a lighted pin oak tree on my property. It’s just beautiful; it makes the neighbors and my wife and I just feel good when we see it lighting up the neighborhood. Landscape lighting is so striking, so when the Volt Lighting Company saw me shopping for it they immediately interrupted my review of the selected product to present photos of what a complete garden or house looks like when graced by their amazing accent lights—and for a package price that saved me lots over single purchase items. It was pure magic. I bought them. Now, every evening I look out the windows of our home I feel good inside when taking in that beautiful pin oak tree in glorious white lights. If this were not the way to raise buyers’ pain threshold, why would the largest store in the world—,com—present you with complementary products just before checkout? Ever bought an LED flashlight you didn’t need because the checkout clerk at Home Depot told you that it was reduced for those who bought camping equipment?

Making “little things big” forms an attitude and understanding of the way we respond to words and the senses. When we use words such as only, merely, affordable, small, just, etc., we are giving the buyer the structure we talked about in Part ll of this series. They give the sense that your product is more affordable, that anyone can enjoy it, and that obstacles fade away. Studies show that the addition of diminutive adverbs, such as those above, increased the response rate in “tightwads” by 20 percent. Instead of 20 customers, you would have 25. In the sale of a $25,000 car with a 10 percent margin, that means a windfall of $12,500. Who would turn away a 20 percent spike in revenue and profit?

The examples above only scratch the surface. Creative minds and a little research will deliver many more ways to add sales and profit to your business, and delighted customers too. We are all looking for ourselves in everything we do. Help another find himself in your product, service, or unique approach to buying turns sellers into the much-coveted “assistant buyer.” Get into the game; you’ll be glad you did.



January 13, 2017 |

Winning the Customer, Part II


ROI by Frank J. Rich







By Frank J. Rich



Few would argue that children need structure. In fact, they thrive on it. Good modeling and easy directions grow security in a child’s development. Modern psychology has come full circle, shelving the idea that asking children to make their own choices is unhealthy and often dangerous to their development.

Not coincidentally, adults do well with much the same direction and structure. Buyers respond best to those who know them and their wants, needs, and buying inclinations. It makes sense; we are better able to serve them when we know who they are and what they want or need. Buyers are like all people; they want to feel included. They want to be named in some way, labeled, if you will. When identified with their preferences people respond as insiders, those who are more highly regarded and cared for.

When we join anything, as social creatures are wont to, we are more likely to participate or contribute to the group’s message when feeling included. Countless studies show that participation grows in those that believe they are an integral part of a group. In a recent study, when voters were told they were more politically active this group was 15 percent more likely to turn out to vote than the control group that was not labeled. The net: give your customers the compliment of the discernment they possess for having crossed your threshold, in whatever terms apply.

We reward consistent behavior. We hear often: “I would never do that, ” or “I would always do this.” People want to be “counted on” to be themselves. We make a promise, then work hard to keep it, or excuse it. When treated well in a restaurant we say: “We’ll be back!” It’s the sense of belonging we crave, and which is a vital gate to Maslow’s next level of hierarchal needs; namely, self-esteem. On our way to fulfillment, the highest level of need, we relish the recognition of our specialness by others. Rewards are what we seek … to feel better, to be better, in the eyes of meaningful others.

Windfalls are followed by generosity. Lucky streaks at the gaming table lead to egregious overspending, followed by rationalizations. Turning losing into gratification by claiming it’s all in fun is common in casinos. Rewards of most any kind encourage repetitive behavior.

Why then are so many businesses reluctant to discount more than 10 percent? The closer we get to “free” the more compelling is our urge to participate. Clever goods and services companies know this well. Free shipping, carte blanche returns, 2-fers, instant prizes, and others are examples of the ways that attract prospects to turn into customers. If the drinks were not free on first class flights, people would gladly pay for them. Once labeled as superior, we feel the need to live up to the label, and we do, repetitively.

I watched in amazement as a convention booth captain invited people to spin a wheel with a guarantee that they would win something. Though prizes were small in value, people lined up to spin the wheel for the “instant gratification” it held. The idea is simple: they needed to feel special, and winning always does that for us.

Make your customers winners, elite decision makers, repeat customers, and best customers, using all the things you can think of to bring them in and relate the needs of each to feel good about themselves. Walk into a jewelry store and ask the price of something in the case. More often than not, the clerk responds with: “You’ve got good taste.” Then the game is on as she moves you into categories that confirm your self-worth, even when it stretches your resources. We spend more at Christmas than at any time in the year. The reason: it makes us feel good about ourselves. The moment we anoint another as special is the moment they align with your desires for them, no matter the cost. Labels work!

January 6, 2017 |
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