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Winning the Customer, Part III

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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—www.amazon,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 |

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