What factors help a customer to buy?
There are a wide variety of things that influence a purchase decision – budget, timing and personal psychology to name a few; but there is one fundamental factor that brings all these influences together – value.
Value is a subjective perception created through a blend of need, price and the belief that one product is better than another. Good value is seen as a high quality solution which meets all of a customer’s needs at a reasonable price.
Here’s how need, price and belief play into a perception of value:
I see a pair of hiking boots on offer and I recognise the brand; but the fact that I don’t go hiking means that I won’t value them highly.
Some marketing works to convince the consumer that they have a need. For example, if I’d read an article explaining how hiking boots improved posture, helped stimulate blood flow and were good for your feet, then by the time I saw the boots I may have developed a “need” for them.
Grooming potential customers this way is an excellent way of enhancing the perceived value for your product or service and can help you break into new markets.
Set your price point as high as you can; this helps to enhance the perceived value of your product.
A big mistake is to slash prices. This can work, particularly when it comes to more exclusive discounts, but offering a huge discount lowers the perceived value of the product. Who is going to pay “full price” for a sofa at DFS when most of the year they are offering 50% off?
The price point will often lead customers to believe one product is better than another. However, people will not be willing to pay a higher price if they do not believe in the product; the two factors work in tandem.
Belief is about your brand, your marketing and their knowledge of the product range. It is what 80% of your marketing budget helps to create. And it is the one area over which you have the most control.
So how do you go about creating this belief in your product or service?
There is no single method, but there is a core concept: “Tell me and I’ll forget, show me and I’ll remember, involve me and I will understand.”
People may forget the specifics but they will be primed to receive your brand, and priming can be important in establishing credibility.
For example, you conduct a PR campaign where you write thought-provoking articles relating to your product or service. In the article you describe the problem (establish a need), drop some hints as to a solution (brand priming) and get it featured in an established trade magazine (credibility).
Visual memory is more powerful for most people than verbal memory, particularly when “show me” still involves some verbal explanation – “show and tell”. Exhibitions and trade shows are great for this.
“Involving” your prospect creates an experience that uses all three types of memory/learning: verbal, visual and kinesthetic (touching and using) to create an almost unbreakable belief in your product. If you are there to tell the prospect the benefits, you can create a need. At the same time you show how the product or service meets those needs visually. Then, the final step, you let the prospect try with the product, get them involved in using it and create an experience.
Creating a complete and immersive experience of your product or service increases recall, generates belief in the product and, in the end, turns prospective customers into brand ambassadors. You aren’t as likely to share the fact that you saw some new product, but you will want to tell people what you just tried out - experiences are made to be shared.
Copyright © 2014 Richard Edwards, director of event and customer experience specialist Quatreus.
What do Baader, McIlhenny, International SOS, Hoganas, Tetra, Bobcat, Gallagher, Seas Getter, Hamamatsu, Arnold and Richter, Petzl, Lantal, Tandberg, WET, De La Rye, Belfor, Ulvac, Gartner and EOS have in common?
They are all companies you have probably never heard of. They have global market shares of over 50% in their sectors and have been around for a long time.
These are the “hidden champions” or “supernichists” according to Hermann Simon, author of Hidden Champions of the Twenty-First Century: The Success Strategies of Unknown World Market Leaders.
These businesses have embedded themselves in the value chain of their clients; and they are the undisputed market leaders in their niche. They focus on narrow, small markets and become the best in that market.
Their strategy is to dominate market niches by transforming general markets in which they are a nobody into market niches where they are somebody.
They are mostly family businesses. They are often based in rural communities. They have a long term perspective. They have CEOs that have been there for over 25 years. The CEO is most likely to be the owner. They are customer-focused and they look after their staff extremely well. They invest in training and innovation. They are ambitious but they stick to what they do best. Above all, they deliver superior quality.
All of the companies have an international focus. They focus on China, Russia, India. They know that Japan is a source of innovation (“What happens in Tokyo today happens in the rest of the world tomorrow”). All their managers speak at least three languages, and increasingly their people reflect the diversity of their client base.
Approximately 70% of these hidden champions only sell directly and maintain intensive, lasting relationships with their customers and suppliers. They have five times more contact with regular contacts then “normal” businesses.
They spend double the average spend on R&D. Because they involve staff in vision, values and strategy, innovation is easier. And of course they involve their customers in the innovation process. The main focus is on ongoing improvement versus breakthrough innovations.
The typical “hidden champion” is a one-product, one-market company with limited organisational complexity. The top management is very lean and leaders tend to be promoted from within. They have high-performance cultures and are intolerant of shirkers. Shirkers get fired. If you stay, you stay for a long time. The average length of service is 37 years — which allows the organisation to retain knowledge and expertise.
The message is simple — you can do it too. Hidden champions teach us that instead of managing only one great thing brilliantly, good management means doing many small things better than the competitors. The sum of many small advantages ultimately leads to success. Genius is not required.
The Scottish Independence vote was a once in a lifetime opportunity. It was a triumph of democracy and 97% of Scotland’s citizens are now on the electoral roll. This means that there are two real winners from the referendum, the people who organise the jury service (97% of people are now eligible for jury duty) and marketers.
Not only do we have almost all of Scotland’s population’s data available to access on the electoral roll, but we also get to examine a marketing case study like no other.
The referendum was an example of two very different styles of marketing. The Yes campaign, headed up by Alex Salmond, was all about emotion. The Better Together campaign, headed by Alistair Darling, was all about rational considerations.
Despite the victory for the Better Together campaign, it’s not a clear that they ran the better campaign. The reality is that both campaigns were lacklustre in some ways.
The Yes campaign made a basic marketing mistake. It was all spin and no substance. You might think that’s a bit unfair, but when your campaign is basically the marketing equivalent of trying to re-create the “They cannae take our freedom” speech from Braveheart and you get accused of lying about things, then it’s a sign that on some level you have failed. In the end, their campaign lacked solid foundations and cost them victory.
Emotional appeals aren’t everything. You need facts and figures.
The Better Together campaign was about the rational. Alistair Darling quizzed Alex Salmond about the economy, what currency we would use, what the impact on jobs would be. This is important, of course, but it’s boring. There wasn’t any emotional appeal. It was a total snoozefest. This failure meant that polls started to show leads for the Yes campaign and caused Better Together to panic.
No matter what YouGov says, quantitative surveys aren’t all they are cracked up to be. Dan Hodges put it best during the referendum when he pointed out that the poll which showed the Yes campaign had its first lead was the result of just 13 people saying they would be voting yes. If you’d asked them on a different day, got them in a different mood, or asked others, the results could have changed drastically and the entire narrative of the campaign would have been very different.
With surveys, you need to back up the data. Look at search trends and combine this with some qualitative analysis from interviews and focus groups to get a much stronger idea of what your results mean.
The turnout for Scotland in the 2010 General Election was almost 64%. For the Independence Referendum it was almost 90%. What’s more, 97% of Scottish citizens registered to vote. In marketing speak, 97% of Scotland entered the sales funnel and 85% of them responded. I’d kill for those sorts of stats.
So, what’s the difference between the referendum and the general election? The referendum was seen as important — it would have a tangible effect on people’s lives.
That’s why you need to find out what matters to your target audience and use it as a hook to solve their pains.
Copyright © 2014 Steve Haynes, SEO and site optimisation consultant for inbound marketing agency, Tomorrow People.
Business advertising spend in the UK hit a new high of almost £14bn in 2013 and is set to increase to £14.8bn this year. But are businesses getting their money’s worth?
Personally, I doubt it. And the reason is that most businesses will miss out on one essential ingredient: experience.
Experiential marketing helps consumers contextualise the narrative behind your product and service.
Let’s take perfume as an example. Perfumes are, functionally speaking, a mixture of ingredients that produce a pleasant smell.
But people don’t wear perfume for the constituent parts; they buy it for the experience, they buy it in the hopes that they will feel attractive and desirable, and they buy it to give them a sense of confidence.
How is this experience achieved? By creating a holistic experience of the product.
It starts with advertising. Perfume ads usually feature a model sauntering around looking sexy; there is usually a husky voice saying abstract words like “adored” or “eternal”; and there is either lots of colour, for fun adventurous brands (think Joop!), or black and white, for brands that focus on being sexy and powerful (such as CK).
Next comes the in-store experience. The bright lights of each perfume shelf, the imagery displayed nearby — all are designed to continue the experience.
The bottle is also key — it takes the experience from store to home. Some are rough and jagged, others are sleek and curved.
And every time the customer uses the product, they experience that vision.
You might say: “But my business is in accounting software, not perfume.”
But you can still apply the same thinking. Experiential marketing relies on bringing together five distinct dimensions into one holistic experience:
Feeling. What will it feel like to use your product or service?
Sensing. How do customers physically sense your product?
Thinking. The experience still needs to take into account the rational, logical value of your product or service. How obvious can you make the benefits of your product? Can you illustrate its potential with a demo?
Acting. What behaviours will your product help to facilitate? Changes in behaviour can be highly motivational and empowering, such as Nike’s classic Just do it tagline.
Relating. How does your product or service link the customer to others, or even to a projection of their future self?
As the Chinese proverb goes: “Tell me and I'll forget; show me and I may remember; involve me and I'll understand.”
Copyright © 2014 Richard Edwards, director of event and customer experience specialist Quatreus.
Many small business owners feel uncomfortable about marketing. Some positively hate it.
A new client of ours — the head of a very successful consultancy — has shied away from marketing for years because to him, it feels intrinsically wrong. In his eyes, markeing is putting on an act, pretending to be something you’re not. Like many people, he thinks there’s a dishonesty at the heart of marketing that doesn’t sit easily with the way he feels about himself or his business.
He’s not the only one. Pretending to be something you’re not is never a good feeling.
We all have a short fuse when it comes to being marketed at by pushy marketers — cold callers, spammy emails, incessant amazing never-to-be-repeated deals (until tomorrow, that is, when you get them again). And that means we don’t want to be that pushy person ourselves
We say look at marketing differently. When you approach marketing from the standpoint of ‘how can we help our customers better?’ rather than ‘how can we sell more stuff?’ it becomes easier. And, it works more effectively. It’s easy to switch off from a marketing message, it’s not so easy to switch off from something that genuinely answers a question that’s been really bugging you.
Right now, it would be impossible for me not to click on something that showed me how to get my 16-year-old son to revise.
You’ll stop seeing it as pushing, lying, or manipulation if you don’t push, lie or manipulate. Create marketing content that is genuinely helpful and you take the pressure off yourself.
Of course feel-good marketing is only possible if what you’re selling makes a difference. But that doesn’t mean you have to be Greenpeace, it just means you genuinely want to improve your customers’ lives.
Do good to feel good. That’s feel-good marketing.
It was while enjoying a series of single malt whiskies, in the Three Crowns Pub, that I was reminded of a marketing lesson that too many businesses are missing in this new digital world.
On finishing our drinks, I asked my brother if he wanted another round. After agreeing to have “one more for the road”, I duly went to the bar and ordered another couple of doubles of Glenlivet. The price I was charged would have made the bottle of Glenlivet just over £100. Yet it is widely available to buy by the bottle for around £30.
Why spend so much extra? I could have easily bought a bottle of Glenlivet in my local supermarket and sat at home with my brother. The drink would have been of equal quality.
The point is that the value was not in what this pub supplied — the drink. There are other pubs that sell the same brand, and there are also many other ways I could have purchased the whisky, many of which would have been more cost-effective.
Rather, the value was in how the pub delivered the product. In supplying pleasant surroundings, a comfortable place to sit, a good atmosphere, a log fire and showing the football, the pub created an experience that was bigger than just the quality whisky. The totality of the experience made the cost of the product acceptable at that moment in time.
Moreover, although this particular pub’s main product is beverages, the landlord had thought about other items a customer may want during their visit. Snacks including crisps, nuts and bowls of chips were available. There was also a quiz machine to play. OK, this is pretty standard inventory for a pub, so why the big deal?
The digital economy has seen the increasing commoditisation of products and services — whether you are a business-to-business company, or a business supplying consumers. We are all now working in the experience economy. Of course, products and services have to be delivered to a high standard in order to compete. However, today that is just the price of entry into any particular market.
The value for the customer is no longer in what you do. Your clients will, more than likely, have a multitude of options, of which you will be just one. The value is in how you deliver the product or service. It is the experience that will differentiate your business. It is also the experience that is more likely to be talked about, shared and which will generate referrals.
Moreover, what you deliver is likely to be the same as a number of other suppliers. This being the case, this is not where the value lies in your business. The most precious resource today is people’s attention. So the value in your business is more likely to exist in data and the customers you supply.
In other words, the real worth of your business is in the engagement and trust you have with your client base. The more you can deepen this, the more valuable your business becomes. Being able to provide added value to “the experience” enables an organisation to earn more money while creating more engagement and value for the customer.
Understanding your customers’ challenges and the contexts in which these occur, will enable you to create new offerings and obtain a greater share of a customer’s wallet. It means being truly customer centric and understanding what else a customer may require when they engage with your business. In other words, what is the equivalent of your crisps and nuts?
When jazz musicians Melvin “Sy” Oliver and James “Trummy” Young wrote the song ‘T’ain’t What You Do (It’s The Way That You Do It) in the 1930s, little did they know they would be providing the perfect comment on marketing in the digital economy.
Ultimately, what you do allows you to exist, how you do it enables you to compete and differentiate. Too many companies focus all their energies on what they do, rather than how they do it and for whom.
Now that is sorted, I am off for a well-deserved single malt! Three Crowns anyone?