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Last month, we began the discussion of the fifth question, “What do you need to do/say to get your customers to act?” We outlined how ultimately emotion is the primary driving force behind whether or not a customer buys. We also talked about a few ways to pique a prospect’s interest in order to help convert them from prospects into customers, such as an “ethical bribe.” This month, we’ll continue our discussion on the fifth question, and outline a few more strategies to help you turn shoppers into buyers.
I will warn you, this type of activity elicits a different emotion from people. It gets them started on the “value hunt.” The value hunt is a strange, counter-intuitive behavior that is a direct result of offering too much value. In essence, the more you offer, the less people will want to pay. That said, increasing consumption can be a good way to initiate consumption.
Just be careful not to use it too much (otherwise you become the pizza industry, which has effectively trained consumers never to buy unless it’s on special). These strategies are also a bit more familiar to most marketers:
Buy One-Get One (BOGO): At least once a year, Payless Shoes will buy advertising in bulk and inundate us with their BOGO promotion. Theirs doesn’t really work the way a BOGO is supposed to (where you buy one and get one for free), instead they have a buy one get one 50 percent off. Still, during these sales, it’s usually best to avoid the mall – it’s like the above mentioned frenzy created by the t-shirt hurling mascot, only with a lot more estrogen and stiletto heels – very dangerous indeed.
Volume Discount: Think of the last time you were in a grocery store. I can all but guarantee you saw a sign that said “three for $5.99,” or some other amount. Volume discounts are a great way to blow through excess inventory, particularly when that inventory is perishable and nearing the sell-by date.
Up-Size Your Offer: Let us all take a moment to thank the great Ronald Mac and the Golden Arch crew for the concept of “supersizing.” Here’s the genius in this type of offer, where it may only add $.59 to your order, the fixed costs have already been covered in your original un-supersized order. Now all they have to do is add $.01 worth of French fries and $.01 of fountain syrup… and you have added $.57 of pure profit to the bottom line. And when you figure that 30 to 40 percent of their customers will take them up on such a minimal increase in their ticket size… that adds up quickly.
Frequent Buyer Reward: It doesn’t matter if we’re talking frequent flier miles or collecting Subway stamps working toward your free sub, offering a buyer’s reward is a good idea. Sure, you’ll give away some free stuff (and you’d better… when you play in this game, customers expect to cash in their rewards), but you can easily build in the cost of redemption into the price of the other sales.
But never forget, if you have a reward system, you have incentivized customers to keep coming back to you. Customers will experience cognitive dissonance if they have a Subway card that’s nearly full and they end up eating at Blimpie. When you introduce a program like this, it’s almost like you’ve contractually obligated your customers to use only you.
One of the obvious exceptions to that rule are those who have to use your product anyway… for example, airlines found that most business travelers belonged to multiple frequent flier programs (because they bought based on itinerary availability and price, rather than which airline would give them miles).
This type of offer helps customers feel like they can get out if it’s an entirely unfamiliar experience or if they don’t end up liking it; basically, it’s a pain avoidance mechanism.
You don’t have to look far to see this phenomenon in action. In fact, scarcity will cause people to buy at prices often exponentially higher than a product is originally sold for; just think of the Beanie-Baby craze, Cabbage-Patch Kids, or Tickle-Me Elmo. At first glance, none of these products would cue you to think, “This is going to start a craze.” But two giant factors in the success, albeit short, of these brands were limited distribution and limited production.
Limited Distribution: The fewer and more exclusive the outlets, the better the scarcity model plays out. For instance, if you want someone to buy, it’s best that they don’t find your product at an interstate truck stop. Also, make sure your product isn’t omnipresent (available at your local grocery store, drug store, convenient store, and gas station).
Limited Production: It just stands to reason that if there are only 500 of an item, those 500 are worth more than if there are 5,000,000,000,000 of something. This is a popular way for artists to sell their products. Prints like Andy Warhol put out, due to the limited edition (and the fact he’s dead and, as a result, can’t make more) increases the value of the product.
Limited Availability: It’s one thing to have 500 of something, and have it only available from your website. It’s another matter entirely when you only have 500 of something, it’s only available from your website, and there are only 14 left.
The allure is obvious: you get the emotional benefit from purchasing a product now, without the emotional distress associated with paying for that product now. Emotionally, it’s a win-win.
Bounce-Back Offer: This one is popular with amusement parks (Disneyland and the likes). You’ve spent your money to come once, now you can come back any time in the next week for half price. Again, it’s like the up-sizing strategy, the customer has already covered your fixed costs with the first purchase. Now the incremental purchase is all profit. Not to mention that once they are there, they will likely play the carnival games, eat the over-priced food and add even more to the bottom line.
Frequent Buyer Program: We already covered this one, but it’s a simple way to keep people coming back. You can do this for practically any type of business.
Education: Tell customers what to do… Never forget the shampoo giant that doubled sales by adding the three little words: “rinse and repeat.” Education can not only increase consumption, but if it delivers the desired results, consumers won’t search for alternatives… because you’re the one who taught them how to do it.
Post-Purchase Advertising: Always follow a purchase with a “thank you” and an offer. In box/in-bag advertising is simple to do and, unlike other advertising, you know they’ll see it.
Last month, we began the discussion of the fifth question, “What do you need to do/say to get your customers to act?” We outlined how ultimately emotion is the primary driving force behind whether or not a customer buys. We also talked about a few ways to pique a prospect’s interest in order to help convert them from prospects into customers, such as an “ethical bribe.” This month, we’ll continue our discussion on the fifth question, and outline a few more strategies to help you turn shoppers into buyers.
Increase Consumption
In the event you don’t want to use an ethical bribe, the next alternative is to find a way to increase consumption by increasing perceived value.I will warn you, this type of activity elicits a different emotion from people. It gets them started on the “value hunt.” The value hunt is a strange, counter-intuitive behavior that is a direct result of offering too much value. In essence, the more you offer, the less people will want to pay. That said, increasing consumption can be a good way to initiate consumption.
Just be careful not to use it too much (otherwise you become the pizza industry, which has effectively trained consumers never to buy unless it’s on special). These strategies are also a bit more familiar to most marketers:
Buy One-Get One (BOGO): At least once a year, Payless Shoes will buy advertising in bulk and inundate us with their BOGO promotion. Theirs doesn’t really work the way a BOGO is supposed to (where you buy one and get one for free), instead they have a buy one get one 50 percent off. Still, during these sales, it’s usually best to avoid the mall – it’s like the above mentioned frenzy created by the t-shirt hurling mascot, only with a lot more estrogen and stiletto heels – very dangerous indeed.
Volume Discount: Think of the last time you were in a grocery store. I can all but guarantee you saw a sign that said “three for $5.99,” or some other amount. Volume discounts are a great way to blow through excess inventory, particularly when that inventory is perishable and nearing the sell-by date.
Up-Size Your Offer: Let us all take a moment to thank the great Ronald Mac and the Golden Arch crew for the concept of “supersizing.” Here’s the genius in this type of offer, where it may only add $.59 to your order, the fixed costs have already been covered in your original un-supersized order. Now all they have to do is add $.01 worth of French fries and $.01 of fountain syrup… and you have added $.57 of pure profit to the bottom line. And when you figure that 30 to 40 percent of their customers will take them up on such a minimal increase in their ticket size… that adds up quickly.
Frequent Buyer Reward: It doesn’t matter if we’re talking frequent flier miles or collecting Subway stamps working toward your free sub, offering a buyer’s reward is a good idea. Sure, you’ll give away some free stuff (and you’d better… when you play in this game, customers expect to cash in their rewards), but you can easily build in the cost of redemption into the price of the other sales.
But never forget, if you have a reward system, you have incentivized customers to keep coming back to you. Customers will experience cognitive dissonance if they have a Subway card that’s nearly full and they end up eating at Blimpie. When you introduce a program like this, it’s almost like you’ve contractually obligated your customers to use only you.
One of the obvious exceptions to that rule are those who have to use your product anyway… for example, airlines found that most business travelers belonged to multiple frequent flier programs (because they bought based on itinerary availability and price, rather than which airline would give them miles).
Risk-Reversal
One of the best ways to get people to try your product is to offer a free trial or money-back guarantee. These two methods put the responsibility for a customer’s satisfaction solely on your shoulders. The customer doesn’t risk anything. If he is not completely satisfied, all he has to do is return it for a full refund, or before the end of the trial period and his card won’t be charged.This type of offer helps customers feel like they can get out if it’s an entirely unfamiliar experience or if they don’t end up liking it; basically, it’s a pain avoidance mechanism.
Limit Availability
We’re odd beings. We want what others can’t have (in fact, we often want what we ourselves can’t have). As a result, scarcity is an amazing motivator. The perceived emotional benefit that comes as a result of being the only one, or one of only a few, to have a product is an extremely compelling reason to buy.You don’t have to look far to see this phenomenon in action. In fact, scarcity will cause people to buy at prices often exponentially higher than a product is originally sold for; just think of the Beanie-Baby craze, Cabbage-Patch Kids, or Tickle-Me Elmo. At first glance, none of these products would cue you to think, “This is going to start a craze.” But two giant factors in the success, albeit short, of these brands were limited distribution and limited production.
Limited Distribution: The fewer and more exclusive the outlets, the better the scarcity model plays out. For instance, if you want someone to buy, it’s best that they don’t find your product at an interstate truck stop. Also, make sure your product isn’t omnipresent (available at your local grocery store, drug store, convenient store, and gas station).
Limited Production: It just stands to reason that if there are only 500 of an item, those 500 are worth more than if there are 5,000,000,000,000 of something. This is a popular way for artists to sell their products. Prints like Andy Warhol put out, due to the limited edition (and the fact he’s dead and, as a result, can’t make more) increases the value of the product.
Limited Availability: It’s one thing to have 500 of something, and have it only available from your website. It’s another matter entirely when you only have 500 of something, it’s only available from your website, and there are only 14 left.
Creative Financing
Again, this is the staple of practically every furniture store and car lot; however, you’re starting to see it creep into other places too. In fact, during a recent trip to a Super Wal-Mart, I saw that I could save $20 and make no payments on any purchase over $250 (food, electronics, whatever) for 120 days if I opened a Wal-Mart card. Creative financing can now extend to groceries.The allure is obvious: you get the emotional benefit from purchasing a product now, without the emotional distress associated with paying for that product now. Emotionally, it’s a win-win.
Get Them to Act Again
Once you get a customer to act, it’s important that you keep them engaged. Remember, consumption breeds more consumption. As a result, once you have the wheels in motion… don’t stop. Here are a few suggestions to keep customers coming back for more.Bounce-Back Offer: This one is popular with amusement parks (Disneyland and the likes). You’ve spent your money to come once, now you can come back any time in the next week for half price. Again, it’s like the up-sizing strategy, the customer has already covered your fixed costs with the first purchase. Now the incremental purchase is all profit. Not to mention that once they are there, they will likely play the carnival games, eat the over-priced food and add even more to the bottom line.
Frequent Buyer Program: We already covered this one, but it’s a simple way to keep people coming back. You can do this for practically any type of business.
Education: Tell customers what to do… Never forget the shampoo giant that doubled sales by adding the three little words: “rinse and repeat.” Education can not only increase consumption, but if it delivers the desired results, consumers won’t search for alternatives… because you’re the one who taught them how to do it.
Post-Purchase Advertising: Always follow a purchase with a “thank you” and an offer. In box/in-bag advertising is simple to do and, unlike other advertising, you know they’ll see it.