The Customer’s Buying Process – Systemic Marketing™ Part III

Tire Sale

Tire Sale Sign

There tend to be two schools of marketing. The creative and the scientific.

Imagination and mathematics.

Right brain, left brain.

At least, it looks that way on the surface.

Marketing Yin & Yang

Some highly effective marketing uses evocative imagery.

“Melts in your mouth,”
“Cleans like a white tornado,”
or “Where’s the beef?”

Some is a bit less exciting.

“click here to learn more,”
“save 13 cents on your next purchase,”
“Dear Fellow nature lover.”

But truly effective marketing uses both. First the math. Then the imagination. First the who, and what. Then the how and why. And that makes sense, doesn’t it?

A marketer identifies the target market, measures responses, and calculates ROI. Then he provides the creative team with very specific direction: “Here’s what we know about the prospect, what we believe to be her motivation, and the offer we’re going to present.

The creative folks, the copywriters and art directors, focus on that customer profile. They detail our prospect’s life. They account for her time, her activities, and her choices. They find correlations in her other purchases.

And then they create “We are Farmers, dum te dum dum dum dum dum,” or “What it feels like to chew 5 gum.”

But it always starts with detailing, and measuring the buying process.

Tread Wears, “Blowout Worry” Accumulates

Eventually, the tread wears down on every tire, and every automobile requires replacement tires.

In most cases the wear happens gradually.

An early stage buyer notes that wear is accumulating on her tires. She’ll file that observation away into her subconscious as something that will need attention sometime in the future.

Her subconscious will, through reticular activation, allow tire ads to pass the mental filter which helps her to tune out the thousands of advertising impressions she’s subjected to each day.

What Runs Through The Shopper’s Mind?

At minimum (“Humm. Tires are showing slight signs of wear.”) she knows she can put off the purchase decision. Not feeling any pressure to buy, but aware that it will eventually become necessary, those lower price offerings from Mr. Tire Store Owner will appear more attractive and better hold her attention.

As the tread continues wearing, she’ll think less about price, and worry more about safety. As you might expect, the closer she gets to “OK… I’m scared to drive any farther on these tires,” the less price acts as the primary motivator.

Then there are those cases in which the tire catastrophically fails. When that happens, she will make a purchase. Probably today.

Purchase Trigger

It may be growing worry. It may be performance failure. It may be because she’s leaving in a week to drive across three states on her family’s vacation. It may be that she came across an unexpected tire sale. It may be an unexpected salary bonus. But something will happen that causes the owner of that car to decide it’s time for new tires.

We call that event a purchase trigger.

A trigger is a change in perception on the part of the shopper.  Its the realization that the actual discomfort of NOT owning has become greater than the perceived discomfort in making the purchase.

Triggers happen to different shoppers at different times, but all shoppers experience similar triggers.

That’s the fact which allows us to design customer acquisition programs.

Once we determine a strong appeal to an early stage shopper (say… reduced price), that appeal will be equally attractive to a different early stage shopper next month. Yet another completely different early stage shoper will be attracted with that same appeal the month after that.

Likewise, the appeal which works to attract this month’s late stage shoppers (perhaps safety, or guilt about safety) will work with other late stage shoppers later this year.

And when our primary appeal meets with a prospect’s strongly felt need, it acts as a trigger, moving that prospect to the next step, perhaps all the way to completing the purchase.

What Steps does the Shopper Take?

The specific shopping steps will be slightly different for every business. Some purchases are made on a whim. Others require research and the approval of a committee. Some buyers initiate purchase orders. Others simply pay cash.

Our tire shopping prospect likely goes through nine separate steps to buy tires.

Tire Customer Buying Steps

Tire Customer Buying Steps

The Sales Process is Always Similar, but Never the Same

So far, we’ve described the buying process, which begins with the shopper feeling a need.  Is the selling process the same?

Usually, its not.

The selling process begins when the seller identifies the buyer as a new prospect, and attempts to get her to engage.

And other than advertising, the seller has no control over communication with the prospect until she identifies herself.

In our tire purchase example the buyer has already taken five independent steps before the  seller knows she exists.

But detailing the customer’s steps between the first interaction with the seller, and the completion of the purchase, are what allow us to standardize the process.  It’s what allows us to set our marketing on  “Cruise Control,” when we’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about detailing your customer’s shopping process? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

 

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Will Advertising Sell What People Don’t Want?

Originally Published December 11, 2007

While browsing the web, I came across an article titled, “Why is My Restaurant Not Full Every Monday Night?” (Google search if you’re all that curious. The article doesn’t answer the question, which is why I’m not linking it).

But it does pose a valid question. Why isn’t your restaurant full on Mondays?

Its a common desire in retail to advertise the things which aren’t selling, and let those which will sell easily sell themselves. This is frequently bad strategy. Very bad.

It may well be part of the reason Wal-Mart thrived while K-Mart worked its way through bankruptcy. Of course, their respective advertising policies may only be a reflection of their inventory management. Then again, this all may be only a coincidence.

And for the record, our story is completely fictitious.

Assume that we have one Wal-Mart store and one K-Mart store, each stocked with various sizes of golf shirts in four colors: red, blue, green, and yellow. We’ll further assume that each store stocks ten in each color.

For some reason, the yellow shirts are in hot demand.

Each store sells out of yellow golf shirts.

K-Mart, in the traditional Henry Ford fashion * notes that they still have 30 shirts in stock. No problem.

Wal-Mart however, takes note that they are completely out of yellow golf shirts, and promptly puts ten more in inventory.

Humm. People will buy what they want, when its available to them. The won’t necessarily buy what’s being advertised. So, while K-Mart is advertising golf shirts in various colors, Wal-Mart advertises that they have yellow golf shirts, and they have them in stock. (Again, this story is of my own invention. It has only a passing relationship to any reality).

Can advertising sell them things they don’t want?

The bitter experience of K-Mart would indicate that people will purchase only what appeals to them, rather than what’s being advertised.

But our question wasn’t about golf shirts, was it? The question was “Why is My Restaurant Not Full Every Monday Night?”

The reason is simple.

Its not lack of advertising. (Rookie media salespeople will assure you that it is. They are wrong. It has nothing to do with advertising.)

It is because people customarily don’t go out to dinner on Monday evening.

They just don’t want to.

They tend to go out to dinner on Friday nites, on Saturday, even on Sunday. By the time Monday rolls around, they’re feeling as if they should stop being so extravagant.

On Mondays they plan to eat at home.

Is there a Monday appeal?

Is there a way to attract a relational customer to your restaurant on a Monday? Sadly, if Monday isn’t Valentine’s Day, Mother’s Day, or a spouse’s birthday, there is not. You could maybe get a transactional customer into your restaurant on a Monday if you offered a discount, but transactional customers tend to stay home on Mondays too.

OK, make it a BIG discount. That will insure two things:

1. bad turnout, and
2. no profit from those rare few who do show up. 

Humm. Advertising a restaurant is very much like duck hunting. You shoot when there are ducks to shoot at.

So what can you do about those Monday nights in your restaurant?

You can cut back on your staffing on Monday and hold your costs to a minimum. Then advertise your great Friday night specials, or your Saturday dinners, or even your Sunday brunch.

Wait for them to be inclined to dine away from home, then remind them to pick you. Cater to what your customers want – and do so on their timetable, and you’ll start boosting attendance as you fish for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about allocating and scheduling your advertising dollars? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.


* Henry Ford is rumored to have said about the available colors of his Model T automobile, “You can have any color you want, as long as that color is black.


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Focus on Customer Value to Survive the Coming Shake Out

Out of Business Sign

Out of Business sign

There’s a shake out coming.

Historians will call this a period of consolidation, in which businesses are eliminated, or acquired through competition.  They will have had the benefit of time.

You and I will remember this as a time of small businesses going out of business.

If your company presently competes with 9 others, and there’s only enough business for six, three will close their doors, or sell out to a competitor.

Of the six remaining, two will barely keep the doors open, three will settle into a comfortable status quo, and one will thrive.

That one will understand how to deliver customer value.

Customers who grew up in times of plenty, loose credit, and purchases on a whim have mentally shifted to a time of considered purchases. They seem to be asking “Do we need it? What must we give up to get it? How good will it be?”

Changing consumer attitudes

Sales are off.  However, goods and services are still being purchased.  Automobiles break down regardless of the economy. Kids still outgrow shoes. Appliances still need repair.

But now every purchase gets considerably more deliberation.

This does not mean you need the lowest price. I promise, price is one of the less important factors in a buying decision.

Hundai Accent

Hundai Accent

Need proof? The Hyundai Accent, at $10,705, has the lowest MSRP in the country.  Do you drive one?  You don’t?  Humm.  There must be reasons other than price on which you based your purchase.

In fact, a 2010 J.D. Power study indicated that only 38 percent of buyers chose their car due to price, while 52 percent said their choice was due to the way they were treated on the lot.

And those 38 percent who focused on price?  You can understand why they said it was important.  When a shopper can’t see any difference between our offerings and those of our competitors it only makes sense to buy the less expensive of apparent equals.  Plus, out of all the factors which influence her decision, price is the easiest to understand.

But don’t believe she’s looking for cheap.  She’s not.  She’s looking for value. Simply stated, value is what the customer gets for what she pays.

Let’s illustrate with a couple of examples from the Great Depression.

Blue Plate Special

Blue Plate Special

Blue Plate Special

Running a neighborhood diner is an exercise in timing. Run out of banana cream pie before people stop asking for it, and you lose sales.  Prepare too many, and they spoil.  Few things are as depressing to an owner as calculating lost profitability awhile watching six slices go bad. During the depression, before refrigeration became cheap, the “use by” dates were much more critical.

And cooking up all of those things which might spoil if we don’t use them will only create more servings of foot to join those unsold pie slices. Unless…  Unless…

Unless we can increase demand for that particular dish.

Here’s an idea: let’s offer a good sized portion of wholesome food at a reduced price.  Customers won’t cares that the offer is for our own benefit. Most won’t care what we select for the entree, as long as its a genuine value to folks aware of every penny they’re spending.

The blue plate special was a strong value-based strategy which worked well 80 years ago. Could it work again today? I suspect, yes.

The Two Pants Suit

Men's Suit

Men’s Suit

This one is pure genius. A jacket and trousers (and sometimes vest) don’t make a suit of clothes. Making them all from the same fabric does. Wearing mismatched fabrics only draws attention to the fact that the wearer doesn’t have a suit.

The useful lifetime of a suit of clothes is usually limited by the trousers. They wear out, or are otherwise damaged, far before the jacket shows normal signs of wear.

The solution? Make a second pair of pants from the same fabric, and double the useful life of the garment investment.

Will people pay more for that extra fabric and tailoring? Yes. Yes, they will. Ask them to pay 20 to 30 percent more for twice the usage, and see how quickly they line up to buy.

And that’s why we stress value, rather than price.  Sometimes to be considered value, one does reduce price. Other times real value requires paying more.

Shoppers want:

1. More

2. Higher Quality

3. For a Longer Time

4. A Reduced Price

Pick one. Better yet, pick two. Survive the shake out by making your choices those which your competitors do not, can not, or will not offer.

Price always comes last. Location, brand familiarity, and business reputation can all be more important than minor price differences – an in a competitive selling situation, those differences will tend to be minor.

And a bit of imagination can certainly help to showcase what’s important to a shopper.

Five Guys Bounteous French fries

Five Guys Fries

Five Guys Fries

Is there a more competitive niche of the restaurant business than burgers and fries? And yet, one of the hottest players in this industry is Five Guys, who’s French fry servings are legendary.

They put your fries in a large styrofoam cup, filled to overflowing. The cup goes in a paper bag, and they pour in more fries, until the already generous serving size has more than doubled.

It’s value.  Is it inexpensive? No, the average ticket for a burger, fries, and beverage at Five Guys is about $11 – roughly double that of McDonalds. Customers not only pay it, they brag about the place to their friends.

KFC’s Containers

KFC Reusable Containers

KFC Reusable Containers

While other fast food restaurants package their meals in disposable paper or styrofoam containers, Kentucky Fried Chicken is now sending side dishes home in Tupperware® or Gladware® styled re-usable containers.

Serve from them. Re-seal leftovers in them. Wash them. Use them for other leftover items.

They probably cost KFC a few pennies more. The company gets points for customer value, and bonus points for being environmentally conscious.

Gallery Furniture

Gallery Furniture

Gallery Furniture Delivers

If a customer lives within 100 miles of Houston’s Gallery Furniture, they can expect same day delivery and set up by store employees.

Buy it today, have it in your home tonight.

They even call 30 minutes ahead to let you know when they’ll arrive.

Sometimes value has nothing to do with price.

Rexel Electric Becomes Destination

Rexel store

Rexel store

When my friend and colleague Mike Dandridge took over the Rexel electrical wholesale store in Midland, Texas, he installed a Senseo® Coffee Brewer and a cross section of gourmet coffees. Dandridge baked chocolate chip cookies throughout the day in a convection oven.

He piped comedy albums into the background music system, installed plantscapes throughout the store and Christmas lights around the counter. Dandridge placed Mr. Potato Head and Etch A Sketch, along with other toys at the counter.

And, of course, he focused on excellent customer service.  Over the next three years Rexel sales more than quadrupled.

Did Rexel try to undercut Lowes or Home Depot on the price of electrical supplies?  No.  They understood the value in the shopping experience.

Exceptional value, as perceived by shoppers, is rare, which is what makes these such great examples.

We assume the differences in our offerings are significant to our shoppers. We assume the “value added” we stack on top of our products and services are appreciated by shoppers. All too often, we’re wrong. What happens when the “extras” we draw their attention to aren’t even on their radar?

If they want bells, don’t give them whistles

Value is the price she expects, compared to the price she pays. Stack on more and more things she doesn’t care about and wouldn’t pay for, and instead of adding value, we merely clutter the dialog with irrelevancies.  We risk becoming irrelevant if we don’t understand to what our shopper pays attention.

Do we know what she values? How sure are we that we know?

survey clipboard

Survey

I’d suggest we ask.

List the attributes you suspect are important, and ask your customer to rank them from most to least important.   She can’t rank those attributes equally, and you can put  this information to immediate use.

Ask her about delivery and set up, documentation, portion size. Ask about entertainment, speed of service, problem resolution, free refills, courtesy of staff. Maybe even ask about price.

But limit the choices to five or six in order to get her to complete the survey. How many customers need to complete it to be useful?  It doesn’t take that many, actually. We only need a basic understanding, not statistical predictability.

25 to 40 completed surveys will provide a solid insight into what shoppers consider important. Knowing which bait works best is important when you’re fishing for customers.

Your Guide,

Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about articulating your value, and making sure your customers appreciate it? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

 

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Pattern Recognition and the People Meter.

Rush Limbaugh

Rush Limbaugh

Pattern recognition is quite likely a survival mechanism.  As human beings, we naturally look for cause/effect relationships in the things which surround us. “Ogg teased the mastodon. It snatched him up with its trunk and crushed him. I don’t want to die. Therefore, I’m never going to tease a mastodon. At least, not up close.”

Of course, sometimes we make mistakes.  Though we try to assign one, not every effect has an obvious cause. “Ogg ate the frazzlesnatch berries after dark, and got a tummyache. I don’t want a tummyache. Therefore, I’m never going to eat the frazzlesnatch berries after dark.” This particular effect (the tummyache) seems silly now that germ theory provides an easily testable alternate cause (germs).

We have a deeply rooted need to understand, which produces an equally powerful “want” to believe. We look so hard for reasons that we accept hazy evidence, questionable schemes, and even false reports. We want to believe we have the answers. We just can’t help it.

Back to germ theory.

Pasteur uncovers germs. Creates vaccine for rabies, and for anthrax. Invents a method to prevent milk from making people sick. Do people immediately abandon the “don’t eat frazzleberries after dark” theory? Don’t count on it.

As each of us gains experience with the world, the frazzleberry ideas, combined with the mastodon ideas, and other ideas, become intertwined into our belief systems. And sometimes, accepting the evidence of germs means, not only abandoning the frazzleberry theory, but also calling into question dozens, maybe hundreds of other observations and conclusions.

This is painful. First, because thinking is hard. Second, because admitting that we’re wrong is harder.

So, other doctors in the early 1860s snorted at “Nutty Louey’s” germ ideas, refused to wash their hands, and spread disease from patient to patient. And when finally confronted with overwhelming evidence? Cognitive dissonance kicks in.

And yes, this does have advertising applications.

Obliquely, we’re discussing belief systems.

But in reality, we’re talking about testable evidence.

We can easily test for germs. We can’t so easily test for the existence of UFOs, the Tri-Lateral Commission, or the exact date of the Rapture.

Every day we’re presented with change. And each of those days, we try to make sense of those changes.

Here’s one change. According to a report from the Arbitron ratings service, Rush Limbaugh’s ratings have dropped 33 percent since October. Sean Hannity’s are down 28 percent in that same period.

Premiere Radio, which distributes both shows, has said the ratings slippage doesn’t worry them, since Limbaugh and Hannity are still the two biggest talk shows in America. Don’t believe them. About the worry part, I mean. Do believe that even with the ratings reduction Limbaugh and Hannity are still numbers one and two.

Progressive leaning pundits suggest the new ratings numbers are public backlash against right-wing opposition to anything Obama. Conservative Pundits talk about short-term ratings bounces being temporary, and point out that Limbaugh is still Number One.

They are all mistaken.  You and I, Dear Reader, will discuss the real reason those ratings have changed.

Those listeners never existed.

Since its inception in the late 1960s, Arbitron has tabulated written diaries in which survey participants recorded the stations and programs they watched or listened to. Since its inception, the listening diary has been flawed. It was designed to record TV viewing in the days before remote controls.

Let me describe the process.  A person got up off the couch and actually walked to the TV to change the channel between ABC, CBS, and NBC. Leaving the open diary on top of the set was simple.

Step one: Actively consider program choices.
Step two: Pick one from the three available networks.
Step three: Write choice in viewing diary.

Rinse and repeat half an hour later.1

But, for as long as there have been winners and losers in the ratings battles, there have been questions about the validity of the diary methodology – ranging from Bolton Research‘s Study of Arbitron Ratings in the early 1980s to Arbitron’s own Non Participant studies.

I remember watching one of Ted Bolton’s presentations in which he played videotapes of diary keepers saying such things as “I usually listen to the rock station, but I felt guilty about supporting them so I listened to the Christian station all week.” Another interviewee said, “I filled out the diary for the whole week the day I got it, ‘cause I had already decided who I’d be listening to.”

We’ve long suspected that people are concerned about what we think of them. Even anonymous people. Now, with PPM data, we have evidence.

Portable People Meter

Portable People Meter

For the last couple of years, Arbitron has been phasing out the paper diary, replacing it with the Portable People Meter. Instead of asking people to describe their behavior, Arbitron is measuring their actual radio listening.

The first national PPM results were measured in September, 2010, and released in October. (Humm. October. Beginning of new methodology).

What is this new data telling us? Diary keepers over-report familiar stations, heritage stations, and those which have simply used the same call letters longer.

We used to believe the average listener listened to 3.2 stations per week. Now, the evidence is that they listen to double that number.

Based on diary keeping we used to believe people listened more (and more intently) in the morning. Now, we know listening is pretty much the same in each major daypart.

And formats? Not surprisingly, the stations which do best are the mass appeal stations. Quite surprisingly, light rock and adult contemporary stations have significantly more men listening than previously thought. (It’s harder to claim you’re a major sports radio fan when the meter catches you listening to Céline Dionne).

Other winning formats are oldies, news, and country.

The biggest losers under PPM measurement? Smooth jazz, some Spanish-language stations, and talk radio in general.  Limbaugh and Hannity listeners, specifically.

Now what?

Now, we adjust.

Electronic measurement has no bias. As Irwin Ephron has stated so well, “There is no “Truth” in audience measurement. There is only validity, bias, sample-size, economics and judgment.

Science ultimately affects opinion, and advertising dollars always flow to where the listeners are.

I don’t expect Harley dealerships to start advertising on the “lite” stations, but I predict you will soon notice more car dealers advertising on the soft rockers.  And Rush Limbaugh’s advertising rates will decrease as station owners, disappointed that the audience they believed listened to their radio stations is only two-thirds as big, begin a slow shift away from conservative talk.

What about you? Will your advertising choices be affected by the new PPM information? Perhaps they should be, if you’re going to successfully fish for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKay

Chuck McKay

Your Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Questions about interpreting the new ratings data may be directed to ChuckMcKay@FishingforCustomers.com.  Or call Chuck at 304-208-7654.


1 Then there’s the whole issue of keeping an accurate diary when one listens in the car. Did we ever really believe a rush hour commuter kept a diary open, and pulled to the side of the road to write down each time she punched the station button?

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How Does One Educate a Customer? Part 1 of 3

Newspaper

A Daily Newspaper

Everyone needs our product,” said Bob. “All we need to do is to tell them about it.

Bob’s enthusiasm is contagious. He’s convinced that America’s tap water isn’t safe to drink because of the presence of pollutants. The water filter he sells removes minerals, microorganisms, toxic metals, and organic chemicals.

If sales is truly a transfer of confidence from the seller to the buyer, Bob is going to sell a lot of water filters. Assuming, of course, he can get his message to enough people.

He thinks advertising problems in the water supply is an excellent way to attract potential customers to his business.

He’s wrong.

Bob has two problems. Each will affect his marketing strategy. Can you identify them?

First, he offers a solution to people who don’t recognize that they have a problem. They will naturally be skeptical.

Second, as small as his industry is, he has competitors. That means if he chooses to educate potential customers about the need for water filtration, they may well buy filters from some other company.

Bob is not alone with this “Teach them why they need it” vs “Ask them to choose mine” dilemma.

  • A manufacturer can’t sell his brand of coffee to people who don’t drink coffee. First, those people must choose coffee as their beverage. Only then can the manufacturer persuade them to choose his brand instead of another.
  • The provider of high-speed Internet can’t sell connections to households without computers. First, the family must choose to purchase a computer. Secondly they must elect to be connected to the Internet. Only then can the provider convince that family to select his service over that of a competitor.
  • And Bob can’t sell his brand of water filters to consumers who find the quality of their tap water to be quite acceptable.

    Why Shouldn’t Bob’s ads explain and educate?

    Because even the most effective marketing message can only advance the decision making process by a single step at a time, and there are too many steps between “Have you ever wondered what’s in your drinking water?” and “Will you buy my filter today?”

    Convincing people they have a problem is tough enough. Persuasion becomes even more difficult when they know you benefit from the sale.

    You have a problem that you’re not aware of. Really, you do. And I’m here to help. Just buy my product…

    Selling to an existing need may eliminate the credibility issue, but it doesn’t eliminate those additional steps.

    Consider the local automobile dealer who no longer needs to convince people cars are superior to horses or bicycles. He still has three decisions standing between each prospect and each sale.

    1. First, the prospect must decide she needs a car.
    2. Then she needs to select a brand.
    3. Finally she has to choose a dealership.

    Advertising can advance the process by only a single decision at a time. Which of those choices should the dealer’s advertising try to influence?

    Sometimes competitors join forces to inform.

    Cooperation can be a smart move when increasing the size of the market benefits all of those who serve that market, even those who compete directly with each other.

  • The Cattlemen’s Beef Board pools the individual members marketing dollars in the “Beef. It’s what’s for dinner” campaign.
  • The Las Vegas Convention and Visitor’s Authority promotes all hospitality providers in the city with their promise of “What happens in Vegas stays in Vegas.”
  • The Florida Citrus Commission helps to create demand for all Florida growers with, “Florida orange juice. Healthy, pure and simple.”
  • You may see this cooperation on a local level when the county veterinary association pools dollars to encourage pet vaccinations, or a group of chiropractors each contribute to an educational campaign explaining the benefits of chiropractic treatment.

    Short term, with enough concentrated advertising, programs such as this can create a bump in the sales curve. Unfortunately, most co-operative advertising programs don’t have the resources long term to significantly grow the number of buyers.

    Which is the smarter strategy?

    Convincing people who don’t already feel the need is hugely expensive. More expensive than most small companies can afford. Educating customers is not a cost effective advertising strategy for most small business.

    Instead, consider addressing “pre-educated” potential customers – those people who already understand the issue. They will be searching for solutions. They will consider yours.

    The car dealer should concentrate on drivers who are already inclined to buy the brand he represents and invite those people to his dealership.

    The Internet service provider should address his ads to people actively seeking connectivity, and explain the advantages of his service.

    And Bob needs to stop trying to tell everyone about his product. He needs to find people who share his concern for unfiltered tap water. He needs to target those customers with every advertising dollar he invests, and persuade them to purchase their filters from him.

    Bob needs to seek out those folks who are already looking for him, but don’t know it yet.  Choosing bait for the fish which are biting is efficient fishing for customers.
    __________

    Part Two of this series will look at the effect brands have on each other when advertising.

    In Part Three we’ll consider a multimedia solution for growing the size of the market (and our individual share of it), as well as an exception to the conclusion you just read.
    __________

    Your Guide,
    Chuck McKay

    Marketing consultant Chuck McKay

    Chuck McKay

    Your Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

    Questions about the cost trade-off between educating customers vs targeting those ready to buy may be directed to ChuckMcKay@FishingforCustomers.com. Or call Chuck at 304-208-7654.

     

    ___________

    This article is one of three on this subject:

    Part 1: How Does One Educate a Customer

    Part 2: How to Steal Your Competitor’s Customers

    Part 3: Zen and the Art of Persuasion

    ___________

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    Are You Testing Advertising, or Simply Your Offer?

    Somewhere in America a rookie cable TV sales representative is talking to the owner of a men’s clothing store. The rookie could have been working in newspaper, or outdoor, or radio. The retailer could have sold sewing notions, or computers, or farm supplies. The the specifics could be variable. The outcome won’t change much.

    The story begins.

    Our rookie is explaining to the owner why his ads are such a bargain. The owner says, “Young fella, you’re making a pretty good case for some cheap ads. I’ll tell you what. I’ve got three hundred dollars left in my budget. See that rack of suits back there? You sell those. We’ll test just how effective those cheap ads of yours are. Do a good job for me on this sale, and I’ll consider advertising with you again.

    The rookie takes note of the rack of pea green suits, and thrilled to have cracked this account, says “Yes, Sir! We’ll get right on it.” He calls his production department to schedule a video shoot at the store, and writes up the order.

    Unfortunately, it will be his only order. The pea green suits will not sell.

    A slightly more experienced media rep would from this point on avoid the client. The more experienced rep has already learned that these kinds of ads only work sometimes, and those times seem unpredictable.

    Our rookie, however, is a little less experienced and a lot more conscientious. He will stop at the store to check on the progress of the sale. The owner tells him nothing is happening. Nobody is buying the suits. In fact, nobody has even mentioned seeing the ads.

    Back at the station . . .

    The rookie tells his sales manager that he’s worried about the new account. If they don’t make something happen, the store owner isn’t likely to advertise again. The sales manager tells the rookie to order a “blind bonus” – ads that the client will never be charged for. The client won’t be charged because the announcements will be added to the schedule without hiss knowledge, in an effort to increase the impact of the advertising, and cover up any shortcomings in the original plan.

    Not surprisingly, the extra ads don’t drive any additional traffic.

    When the sale is over, the ads have run, and its time to reconcile the books, our young media rep will apologize to the store owner. The rookie will collect the three hundred dollar payment. He will decide to never again try to sell this advertiser anything.

    Worse yet, this conscientious young media representative has now started doubting that advertising works. He’s previously seen it work well. Sometimes. Now it seems that sometimes it doesn’t work at all. And he can’t see any way to predict which.

    Did advertising fail the test?

    Yes? No? Not sure?

    Consider that rack of pea green suits. The regular customers of the store did not purchase them. Why? Are they the wrong color? Wrong size? Wrong fabric? Wrong style? Wrong price? Some combination of wrongness? It is a safe conclusion that something is wrong. The store still has so many of them in stock that those suits have become the entire focus of an advertising schedule.

    Unable to sell these suits to his regular customers, the store owner now expects the rookie to magically create new customers. New customers who like unacceptable merchandise.

    I submit that this exercise is not a test of advertising at all, but rather a test of whether it’s possible to sell goods no one wants. “Won’t you please buy one of these previously-rejected suits, despite their wrongness?” No matter how many times people see this ad the outcome is the same.

    Oh, and it’s also a test of the rookie’s willingness to accept responsibility.

    It always comes down to the offer.

    Not that long ago the owner of a local business wanted me to create ads which said, “Mention you heard this ad and get a free key chain from Acme Widgets.” I agreed that any medium not able to deliver the message should not be included in his advertising budget.

    Then I pointed out that a much more fair test would be “Mention you heard this ad and receive a free $100 bill.” He sputtered something about the stupidest thing he’d ever heard and slammed down the phone.

    I’m assuming he and I won’t be working together.

    So, the first decision must always be what we are to test.

    Let me save you some time. It all comes down to the offer.

    And why would you waste your money testing such lame offers as free key chains or racks of pea green suits, anyway?
    __________

    Want to learn how to make every ad deliver a positive ROI? I highly recommend the Advertising Performance Seminar next week in Denver, presented by the Wizard of Ads Partners. For only $99, you’ll come away with more knowledge of effective advertising messages and positive customer experiences than many of the media sales reps calling on your company.

    __________

    Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about testing your advertising may be directed to ChuckMcKay@ChuckMcKayOnLine.com.

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    Violated Expectations. Marketing lessons from the Dallas Cowboys.

    The Dallas Cowboys haven’t had that bad of a season. Five wins, four losses. Slightly better than average. Unfortunately, the die hard fans are devastated. Care to speculate why?

    Probably because their expectations for the 2008 season included the Super Bowl.

    HBO’s “Hard Knox” may have started some of the hype, featuring the team in four episodes. ESPN picked up on the extra attention given the Cowboys, and focused their considerable airtime (and commentary) on Dallas.

    Then, of course, there were all of the bloggers, themselves die hard fans, who enthusiastically trumpeted the inevitable triumph.

    Had the fans not been led to expect more, this season wouldn’t be all that bad.

    Is there a marketing lesson in the 2008 Dallas Cowboys?

    Why, yes. Yes, there is.

    It has to do with your customers expectations, when compared to their experiences. Outside what they’ve learned from your ads, many potential customers have no idea of what to expect from your company.

    And then they have an actual experience with your company, and you live or die by whether your advertising is contradicted by your customer’s reality.

    Advertise “fast friendly service,” but deliver an experience in which your customer stands in line for a turn with a discourteous employee, and every dollar you’ve spent on advertising is wasted – at least with that particular customer.

    In much the same way that violated expectations have led Cowboys fans believe this season to be awful, your customer’s violated expectations may convince her that you deliver bad service.

    Worse, that you deliver bad service, slowly.

    Violated expectations make people talk. Good and bad.

    I wrote about those effects in Love and Indifference, Part 1:

    “When you thrill shoppers with their purchases and the way they are treated, they are likely to become customer evangelists. They’ll be out preaching the gospel of your company and winning converts to whatever the degree of their persuasiveness. 

    But the extremely displeased group turn into vigilante customers. In their minds they’ve been wronged. You could just as well have “Wanted, Dead or Alive” posters up with your name on ’em, ’cause they’re out to get’cha. Tell twenty more? Count on it.”

    But what if your customer’s experience is only slightly off?

    What if you don’t deliver great service, but you don’t do a bad job, either?

    If the customer expects “a gourmet meal exquisitely prepared using only select ingredients,” and gets a meal that’s reasonably good, she may attribute superior qualities to the food.

    That’s exactly what Antonio Rangel, associate professor of economics at the California Institute of Technology demonstrated in a recent wine tasting. Rangel altered the prices on the bottles, and found:

    The volunteers consistently gave higher ratings to the more “expensive” wines. Brain scans also showed greater neural activity in the pleasure center when they were sampling those “pricey” wines, indicating that the increased pleasure they reported was a real effect in the brain.” 

    Without any major disconnects between expectation and experience, there’s a good chance that people will accept what they’ve been led to expect. Which leads us to a simple formula for advertising success:

    1. Use your ads to create an expectation of the experience your customer will have when she does business with you. 

    2. Then, ensure that her experience delivers on those expectations.

    3. And though we haven’t yet discussed it, hold something back from your advertising. Use it to “WOW” your customers, and make their experience better than expected.

    We’ll give that idea some consideration next time.

    In conclusion, the most effective advertising reinforces what people already believe. The most successful businesses do nothing to contradict those beliefs.

    __________

    Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about delivering on your customers expectations may be directed to ChuckMcKay@ChuckMcKayOnLine.com.

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    Can You Use Cognitive Dissonance to Create More Successful Advertising

    A couple of decades ago I sat on the invisible side of a two-way mirror and studied the members of a focus group as they watched some television ads my company was testing.

    One of my company’s most vocal supporters watched an ad that positioned our product as quite similar to our major competitor’s product. He immediately lambasted our competitor.

    Did you catch that? He saw a test ad in which our product claimed the same marketing position as our major competitor, and immediately assumed that the ad had been produced by that competitor, and promoted the competing product.

    Was he easily confused? I think the answer is much more interesting: he suffered an episode of cognitive dissonance.

    Cognitive dissonance is a psychological term.

    The term was coined in 1957 by social scientist Leon Feistinger to describe the uncomfortable tension which results from a person having two conflicting thoughts at the same time. Feistinger theorized that when the mind is presented with evidence which contradicts strongly held beliefs, the mind acquires or invents new information in order to justify the belief.

    Our supporter in the focus group was presented with evidence that one company (ours – his favorite) was claiming attributes of a company he actively disliked. His reaction? It must be the OTHER company making these claims. To admit otherwise would be to admit that his favorite product had THOSE characteristics.

    Selective observation is another manifestation of cognitive dissonance. We see this in each of the Presidential debates. Viewers accept those statements which reinforce their current beliefs (justification), and ignore those which contradict (denial). You can accurately gauge the politics of each network commentator by noting which of the candidates the commentator proclaims to be the winner.

    How does cognitive dissonance affect advertising?

    In general, people tend to be optimistic. They believe themselves to be virtuous, to be intelligent, to be successful. And pointing out the difference between people’s self images and the reality of their current situations can be a valid advertising strategy. The resulting cognitive dissonance can create an incomplete feeling in the customer who doesn’t own whatever the advertiser is selling.

    Does it work on everyone? Of course not. But, it can work on enough customers to be a valid strategy.

  • John thinks of himself as successful, but he drives a 5-year-old car. Mr. Car Dealer reminds John that the new precision driving machine only appeals to those with discerning tastes, and that being seen in a performance car will telegraph to the world that John is someone to be reckoned with.
  •  

  • Jim loves his wife. Mr. Jeweler suggests that if he really loved her, Jim would show it with jewelry as precious as she is. Mr. Jeweler suggests that two months salary is the appropriate amount to consider spending to tell her he’d marry her all over again.
  •  

  • Jake is a young professional, at the beginning of his career. Jake has been advised to look successful in order to appear to management to be ready for promotion. Jake’s friends drink one of the mass advertised domestic beers. Jake has been affected by the advertising of an import positioned as higher quality.
  • Most advertising delivers images of what people say they want. Most advertising emotionally connects the those images things the advertisers sell. Cognitive dissonance adds the elements of guilt, regret, anxiety, or dereliction.

    Am I recommending the application of cognitive dissonance in your advertising?

    Maybe. Do you sell a premium product or service? For some premium products it’s a valid strategy. For most, it’s not.

    The stronger your position, the more likely you are to be noticed by high-probability prospects. It simultaneously eliminates the low-probability prospects. The stronger the dissonance, the better this strategy will work, if implemented properly. Taken too far the customer can be made to feel like a failure, and won’t buy at all.

    Of course, there are consequences to no image, too. Serious consequences.

    What’s your image? How strong is that image? The stronger your image, the better the bait, when you’re fishing for customers.

    Your Guide,
    Chuck McKay

    Marketing consultant Chuck McKay

    Chuck McKay.

    Your Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

    Questions about creating your professional image may be directed to ChuckMcKay@FishingforCustomers.com. Or call Chuck at 304-208-7654.

     

    If you know someone who would find this article useful, please share it.

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    Cherish Your Existing Customers – Surviving the Recession – Part 2 of 7

    How many times have we read that it costs 5 to 7 times as much to acquire a customer as it does to retain one? And yet, knowing that existing relationships are more profitable, we spend the majority of our planning and budget on new customer acquisition.

    Unless you’re a brand new company, quit it. Until you’ve optimized profitability of your existing relationships, you’re wasting resources.

    What are you doing to make your customers feel appreciated? Don’t have time? WRONG! Appreciating people adds directly to your bottom line for three excellent reasons:

    1.Your best customers buy more often
    2.Their average purchase is two-thirds greater
    3.They refer others in greater number 


    I love the Ritz Carlton’s formula.

    They offer a warm and sincere greeting, using the guest’s name when possible. They pride themselves on anticipating the needs of each guest. They offer a fond farewell at the end of each guest’s stay.

    Do you treat every customer as if they were your best customer? Maybe it’s time. Some of these basics should be automatic. Respect your customer’s time. Keep your promises. Keep your customer in the information loop. Deliver the same day your customer purchases. Show genuine interest in your customer’s satisfaction and success.

    Look for additional customer touch points. Send “thank you” messages. Send birthday cards. Ask your customers about their dealings with your company, and ask their advice. Its flattering to be asked. Gather, analyze, and act on their feedback. Not only will your customers feel as if you consider their opinions valuable, you’ll also improve your service.

    You plan to remember special dates for your friends and loved ones, don’t you? Birthday card for Grandma has to be mailed by Friday? Call your brother on his birthday? What are we going to do for the folk’s anniversary?

    Do you know your customer’s birthdays? Hummm. Well, you do know the anniversary of their first purchase, don’t you? Why not? Send a “You’ve been our customer for a year, and we appreciate you” card. Drop a hand-written post card to your best customers telling them of the new inventory you’ve just received. If you think about it, there are dozens of reasons to contact your customers.

    Back to anticipating your customer’s needs:

    Do you sell products in a predictable order? Does your homeowner customer typically purchase a lawnmower, then a chainsaw, then a brush cutter? Send information about the next probable purchase to customers who haven’t even asked about it, yet.

    Is it likely that your customer needs accessories when she makes a specific purchase? If she’s just bought a laptop computer, does she need a docking station for her desk? Does she need an MP3 player to store her downloaded songs? Would she appreciate a kit of cables, blank recordable media, and rechargeable batteries?

    Can you introduce your customer to your service manager, and schedule her first preventive maintenance appointment?

    As your customers own and use your products, they’ll learn of other needs they haven’t even suspected, yet. Help your customers to buy more from you by helping them to anticipate.

    And when you screw up?

    Proactively taking care of a customer’s problem can actually improve your relationship. Customers expect you to care. They prefer you to competently fix their problem, now.

    One of the best customer service formulas is “Whomever takes the call owns the problem.” In other words, the employee who is dealing with the customer is not allowed to pass that customer off to another employee. Of course, that also means you have to delegate authority to your employees to accompany the additional responsibility.

    Owning the problem means making it personal. Not “We’re sorry,” but rather “I’m sorry. I will fix this for you..”

    What are your customers worth?

    Don’t know? Here’s a tool from Harvard Business School to help you with your calculations.

    Last thought (for today):

    No more excuses. Buy a box of “Thank you” cards, and start sending them today.

    __________

    Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about helping your business thrive during an economic recession may be directed to ChuckMcKay@ChuckMcKayOnLine.com.

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    Basics of Retail Marketing from a Nine-Year-Old

    Nine-year-old Lindsey, who’s visiting her grandmother and me, obviously has the entrepreneurial gene.

    She decided on Wednesday to open the classic American neighborhood business, the lemonade stand. I suspect there are a few retail marketing lessons every business person could take from her example.

    Optimism.

    Have you ever met a nine-year-old who didn’t believe anything was possible? When told “that won’t work,” her response is automatically, “well, what if we did this?

    I’m not recommending that anyone take on the Don Quixote role, but there’s something to be said for enthusiasm and attitude.

    Location.

    Although the ambient temperature hovered in the mid-90s, Lindsey chose to park her table in the direct sunshine next to the street, rather in the shaded (and much harder to see) front porch.

    People must know you exist if they are to buy from you. If they can’t see you, you’re too easily ignored.

    Pricing

    Her question wasn’t “How much can I charge to make maximum profit,” but rather “how little can I charge so that everyone will want to buy?” She settled on twenty-five cents per eight ounce cup.

    Advertising.

    Lindsey posted signs a block in every direction. She also was quite vocal. Not a pedestrian nor the driver of any automobile on Collis Avenue missed the message that she had “ice cold lemonade for sale.”

    Upselling.

    As each customer finished a cup of lemonade, Lindsey first confirmed that they were satisfied. “It was good, wasn’t it?” When her customer affirmed that it was, indeed, good, she pointed out that a single eight ounce cup probably hadn’t completely quenched the customer’s thirst. She poured another and held it out to each customer.

    Most bought a second cup.

    Location, Reprised

    Discovering that a crowd had gathered half a block away at a yard sale, Lindsey re-located her table to the yard sale, and offered cups of her lemonade to the hostess, and to the yard sale customers as well.

    Summary: In a single afternoon, Lindsey grossed thirty-three dollars. And at twenty-five cents each, creating that many customers from scratch seems to me to be a rather impressive success.  Paying attention to retail marketing basics is always worthwhile when you’re fishing for customers.

    Your Guide,
    Chuck McKay

    Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

    Got questions about retail marketing fundimentals? Drop Chuck a note atChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

     

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