Friday, May 10, 2013

Seducing the Customer

Creating a perceived value of a product that is more than the cost of production is ultimately the main way to drive profits on a given product. A consumer's perceived value of a product/service directly affects the price they are willing to pay for a product or service. In general, customer's have no idea of the real cost to produce a product or of the cost to provide a service.

This is where innovative marketing strategies come into play. The trick is to develop creative marketing campaigns that seduce the customer into believing the value of the product is more than it is actually worth.

When developing these strategies companies should try to produce commercials and advertising that are relevant to its target market as well as relevant to the company. I find it obnoxious that there are so many ads on TV today that have nothing to do with the product or the company. It is not an effective way to get someone interested in the product. Advertising should be about showing the functionality of the product or service in a way that makes the customer see value in purchasing the product.

Yes, your irrelevant over the top commercial may be memorable, but if it does not create an increase in perceived value you are wasting your money. And my time.

Tuesday, February 26, 2013

Cold Calling

Cold calling can seem daunting if you have never done it before. The very idea of cold calling makes many people have anxiety. But, to have an effective marketing strategy you must reach as many potential clients as possible.

Cold calling does not necessarily mean that you will be sitting behind a desk making random phone calls in hopes to schedule meetings. From my experience the most effective form of cold calling is done in person face to face. Now if the thought of calling random people on the phone seems intimidating to you, the idea of visiting them face to face probably seems like a terrifying ordeal. I get this, but as with everything in life, the more you do it the easier it gets.

Face to face cold calling has benefits that sitting behind a desk hiding behind your phone doesn't. It is much harder to say no to someone or be rude to them if they are right in front of your face. With phone calls people can simply say "NO" and hang up on you. With emails it is way too easy to just not respond. When you are face to face with people they HAVE to acknowledge you.

The first step of any successful marketing approach is to get yourself and your services acknowledged by potential clients. People are generally nice to people when they are face to face (even if it is fake). Face to face cold calling may be more time consuming, but it can be a lot more effective.

If you visit someone enough they may even do business with you just so you stop coming by so often.

Saturday, October 6, 2012

Expecting Something?

Building expectations is essential when it comes to building the reputation of a brand or product. In a time when information can travel more quickly and reach more people than ever before (thank you Mr.Internet) even people who have never tried a product or service can have a general idea of what to expect from the experience. One of marketing's main functions is to provide information that will heighten someones anticipated real pleasure.

What customers think and feel about a brand is a key aspect in the success of any business. A good brand image can portray a certain quality that may be unmatched by a knock off brand. A good brand image is an intangible aspect that is a crucial in successful operations of any business. Take Coca Cola for instance...the red can is recognized world wide, even in the poorest corners of the world. You cannot beat that kind of recognition and you cannot place a monetary value on the benefit Coca Cola receives by its brand image.

The question is do expectations created by marketing really change the experience the customer has with the product? I believe in most cases it does (not including really bad experience or a really good experience). If someone is expecting a product to be good they are more likely to view the product as being good. After all who would purchase a product or a service that they have poor expectations for. If the customer has poor expectations of a product they are likely to forgo buying that product (who buys a product that they are expecting to be bad?)

We are all trapped within our own perspectives, which can partially blind us to the truth. These perspectives cause us to expect certain outcomes based on past experience. This is one reason that building a good brand image is so important.

By building a good brand image marketers build consumer expectations that change the way customers perceive their experiences. Getting customers to perceive their experience or future experience as a positive one is a recipe for success in any business.

Thursday, September 13, 2012

The Power of Suggestion

Every human being is susceptible to clever marketing messages and the enticing images that marketers put out when they are trying to build a customer base. All one has to do is turn on the t.v to see the food industry flooding our consciousness with  tasty looking food items. And people want to know why Americans are so fat!

Will power only goes so far and the power of suggestion is a lot stronger than most people think. Hell, most people probably don't realize that they buy things they don't want or need because it has been cleverly suggested to them by marketers or friends.

The trick is to make people feel like THEY are really the ones making decisions about what they are buying. In reality they had less to do with what was purchased than they would like to think. People fall prey to the power of suggestion everyday in every aspect of their lives. This is why people come home with expensive merchandise they do not really want. The power of suggestion is what makes a salesman succeed. The power of suggestion is why people say a few certain words to someone with the intentions of planting a seed in someones mind and watching it grow until the person is doing what they wanted them to do while believing it is their idea and what they want to do!

In reality, most people are far less in control of their decisions than they would like to think. Lack of control makes people mad and scared. When one becomes conscious of the power of suggestion they will see how much the media and society influence people's decisions. Becoming aware of this will allow YOU to begin taking control over your decisions without being so heavily influenced by the media or friends.

Monday, September 10, 2012

First Impression is the Last Impression

When it comes to meeting someone new or seeing something for the first time, first impressions are everything. The same is true when a new product is launched into the market. The first impression that the consumer gets about the product is very important. First impressions of a new product get imprinted into the consumer's head.

Consumers attribute the quality and value of the product largely around how the product is introduced. Consumers will likely base future decisions of the product or brand based around how they perceived its first impression. Thus, a product that has a good first impression will likely create a loyal customer following.

First impressions are one of the reasons that companies place a new product at a premium price. This premium price signals quality to the customer. Customers are willing to spend more for a product they see as quality.

Once a customer buys a product at a particular price the customer (and other customers) become more accustomed to that price. If a customer who buys a product at a particular price is satisfied with their purchase, other customers will see this as a signal that the product is worth its asking price. The trick to this is making sure that your customers see value in your product at the selling price.

Once a price has been established in a customer's mind, it not only shapes what a customer would be willing to pay for the product in the future, but it also shapes what they would be willing to pay for similar products in the future.

Now all of this does not mean that a customer will only accept the first price given. A customer will accept a range of different prices, but they will always compare new prices with the original price (that's why many people perceive one product being over priced and one product being under priced). With this comparison the customer may see a new price and think to themselves "Wow! This product is now this price? It used to be much more than that...I can't pass it up now...I HAVE to buy it".

Just ANOTHER way we as consumers are easily predictable...and why marketers can easily manipulate our decision making without us even knowing it.

Thus, we as customers should pay particular attention to the FIRST decision we make in a particular situation. Though it may seem like a simple decision with minimal amount of consequences when we make it, it will DIRECTLY impact future decisions. This first simple decision thus turns into a series of decisions that build upon the first decision resulting in long term consequences.

Tuesday, August 14, 2012

Relativity is not only for Einsteins!

Relativity may sound like a daunting idea when you first think of it. Memories of your highschool physics class may come to mind leaving you in a state of utter confusion. However, when one begins to look at relativity in a business sense it is much easier to understand. Unlike Einstein's theory of relativity that deals with velocity, spacetime, and the speed of light the average person understands how relativity works when making a purchase decision...even if they are not aware that they understand this relativity.

Relativity helps customers make purchase decisions when they are looking to buy a product. Marketers often place emphasis on relativity. They know that making relative judgments is part of the decision making process of customers.

Say a customer is faced with these three choices:
1. A fully equipped Ford truck (has all possible accessories)
2. A Ford truck that is not fully equipped (is lacking some possible accessories)
3. A Dodge truck (can be either fully equipped or not)

The decision the customer is most likely to make is to purchase the fully equipped Ford truck. Why you ask? Because the customer had something relative to compare it to. Though trucks may not be the best example, the principle is the same regardless of the product. Since a customer has something relative to compare the product to they see the product that is not lacking anything as being the best choice.

Relativity is the reason that businesses tend to overprice some products, but not necessarily others. If you've been to a nice restaurant and noticed that one bottle of wine is 600$ and the closest bottle of wine to it is only 62$ you are not alone. Who would ever spend 600$ on a bottle of wine that is likely not much different from the 62$ bottle you ask? Not many people in their right mind, and the restaurant does not intend people to. They have set this bottle at a ridiculous 600$ because they are trying to get you to purchase the 62$ bottle of wine (which may or may not be worth the price). They know that you will see both prices of the bottles and make a relative comparison. After knowing that you could pay 600$ for a bottle of wine at this restaurant, the 62$ bottle all of a sudden seems a lot more realistic in your eyes so you decide to get that one instead. Marketers generally place the item they want to sell somewhere in the middle of the price range. The 600$ bottle of wine is just too much money, but the 12$ bottle then begins to sound like Boones Farm. And damnit I didn't come to this restaurant to drink bad wine. Thus, you end up with the 62$ bottle of wine on your table without even realizing that you have been cleverly manipulated into doing exactly what they wanted you to do.

You can also see relativity occur in the business world in a different light. You may be at a store about to purchase a 25$ belt when a friendly shopper tells you that the SAME belt is only 15$ at another store that is 15 minutes away. You think to yourself "Hell yea I'm going to save me 10 bucks", and you put down the belt and  happily drive 15 minutes to do so. But what happens when it is not a 25$ belt you are buying? What if you are buying a 600$ suit and a shopper comes up to you and tells you that the same suit is being sold for 590$ at a store 15 minutes away? You would likely not waste 15 minutes driving to another store to save 10$ on a 600$ suit. But why not? People tend to do this because of relativity. Saving 10$ on a 25$ purchase seems like a great deal, but saving 10$ on a 600$ purchase doesn't seem that important. The thing is though 10$ is 10$ and your bank account will not recognize what you saved 10$ on.

All of this is the problem with relativity. We tend to make our purchase decisions in relative ways by comparing them to available alternatives. If people are aware that they are making the decisions from relative comparisons will they be more likely to change their decisions? Maybe, but the fact of the matter is that relative comparisons is how we as human beings make decisions.So, though we may be aware that we are being manipulated by marketers it does not mean it will change the decisions we make.

Wednesday, August 8, 2012

How Does a Customer Attribute Value?

A customer determines value by comparing one thing to another. There is more than one type of comparison a customer can make in any given instance. Customers may value something more highly when they make one kind of comparison than when they make a different kind of comparison. Making a comparison is key for a customer to determine the attributed value the customer gives to a product.

When faced with side by side comparisons people begin to place importance on attributes that do not really matter when it comes to the real value of a product. Often these attributes would not play a role in customer decision making, but faced with side by side comparisons these attributes suddenly seem important to the customer. Thus a customer may end up purchasing a product based on attributes they deem "better" even if they didn't know what the additional benefits offer. Often it is highly likely that before the customer was confronted with side by side comparisons most of these benefits did not matter and would not have played a role in the end purchase of the product.

You may notice that retailers put out large displays of similar products so that people will begin to compare the attributes of these products. People will begin to consider the possible attributes rather than considering whether the product is really better than the similar product. Likewise they will consider these possible attributes when comparing them to the similar product that they ALREADY own. Most of the attributes don't vary drastically, but from a customer who is intent on buying a new product all that is seen is that this product has this attribute and the other product does not have this attribute.

People focus on the attributes that the marketer put in front of them without considering whether this product is really that much better than the one they already own. Thus, if a marketer can place a certain emphasis on attributes that seem important (even though they may not be) they will more likely than not entice the customer into buying a produce even if they may not need or want it.

More often than not a customer will spend more money on attributes that really don't matter (they may not even know the benefits of these attributes). But hey, at least he will be able to brag to his neighbor that his camera has a better flash output than theirs!