April 2013

Why do customers buy what they buy?

Over a series of blogs I’m going to examine this topic in detail and work back to various theories of human motivation which can be linked to the purchase decision.

People buy because they have a want or need that they cannot quickly or easily solve on their own.

But why do they want?

Why do they need?

There have to be deeper answers than simply saying that people buy to fulfil a want or a need.

Let’s first look at why this is important to understand.

Why Understanding Purchase Motivation Is Important To Business Owners

There are three fundamental reasons why a customer focused entrepreneur must understand why customers buy:

1. When you understand why customers buy, you are crystal clear about the benefits, desired consequences and the ultimate goals that customers want. That means that you can design your product or service to deliver these benefits without being distracted by peripheral irrelevancies that come from over-engineering or over-specifying your customer solution.
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   Who hasn’t become frustrated with the complexities of the video/DVD recorder which won’t do what you want but will seemingly do many things you have no interest in?
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2. You can focus your marketing money and time towards the prospective customers hot buttons. This makes your marketing promotion and communication process efficient and effective.
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   Your customers understand what you provide and the right customers are attracted while the wrong customers (also known as time wasters) know that your product or service is not for them.
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3. By providing a tight match between the benefits your customers want, the benefits you promise in your sales process and the benefits your buyers receive, you create delighted, loyal customers who buy again and recommend you.

Joe Polish and his Genius Network Interviews have released the video of the interview with Joe Sugarman.

Joe is the author of the exceptional book Triggers.

In this interview the two Joe’s discuss the psychological triggers that can control the mind based on the book.

I should warn you that the video is audio only so there aren’t any exciting visuals to watch.

Sit back, with pen and paper at hand and start taking notes as Joe Sugarman reveals how sales and marketing people can ethically use these psychological triggers to increase sales

One of the best known models to help marketers and business owners to succeed with their marketing plans is the Marketing Mix.

Background To The P’s Of Marketing

Originally this was developed and became famous as the 4 P’s Of Marketing.

It’s been around for years and in the nineties I was taught an updated version for service marketing, the 7 P’s Of Marketing.

I wrote about these in a blog article that at its peak was being read several thousand times per month.

Marketing Mix: 4 P’s or 7 P’s of Marketing or Extended Even More?

I contrasted the 4 P’s and 7 P’s Of Marketing and criticised them for missing out some important issues.

Development Of A New P’s Of Marketing Model

I was helped by a few other marketing models I had seen.

As I thought about marketing, I became fascinated with how many words that are important begin with P.

Sometimes I had to get a little contrived. I finished up with the 27 P’s Of Marketing.

I wasn’t serious that it could be used as a model for building a marketing strategy, plan or campaign but it did raise some important issues.

I then started searching for other alternative versions of the Marketing Mix.

I was overwhelmed with what I found as different marketers tried to come up with their own original version.

Sometimes they would change a P, other times, add a P or two…

I’ve written summary blog articles.

The Different Marketing Mixes and Versions Of The P’s Of Marketing Model

3 P’s Of Marketing

4 P’s Of Marketing

5 P’s Of Marketing

6 P’s Of Marketing

7 P’s Of Marketing

8 P’s Of Marketing

9 P’s Of Marketing

10 P’s Of Marketing

11 P’s Of Marketing

12 P’s Of Marketing

14 P’s Of Marketing

15 P’s Of Marketing

Things didn’t stop at the 15 P’s Of marketing but I pick up the story again in the original article.

Marketing Mix: 4 P’s or 7 P’s of Marketing or Extended Even More?

In the last year we’ve seen various price promises from the leading supermarkets in the UK – Tesco, Asda and Sainsburys and price competition intensifies as national austerity restricts spending.

The idea is simple.

The supermarket agrees to reimburse the buyer for any difference in the price of his or her shopping that would have been achieved at one of the other big supermarkets.

How The Supermarket Price Promise Works And Why It’s Not As Good As You Think

There are various limits in place but let’s take a tin of Heinz baked beans as an example with the following made up prices.

In Asda – 50p

At Sainsburys – 54p

At Tesco – 55p

Asda shoppers don’t need the price promise.

Sainsburys would refund 4p to get back to the Asda price, Tesco would refund 5p.

But I doubt the supermarkets do it on individual line items without offsetting savings where they are the cheapest.

Then we have the issue that about 40% of purchases are made from special offers.

If Branston Baked Beans are on special offer, 4 cans for a £1, in Tesco, the number of customers buying Heinz Baked Beans will drop sharply.

Some have a strong enough product preference to pay the price premium but others don’t.

The Tesco customer buys the Branston baked beans and no longer has an effective price promise.

In fact, if those packs of four cans of Branston beans were available for sale at Sainsbury and Asda for £1.50, there is a favourable price difference of 50p to offset against higher price discrepancies.

Exact Like For Like Purchases Are Not The Best Like For Like Comparison

With so many products on special promotion, the best buy shopping basket from each supermarket will be very different.

A customer can buy the same generic items at all three supermarkets with the price promise and still not qualify for any kind of price refund.

These price promises give you a false sense of reassurance that you’re getting a good deal.

In fact there is much more marketing style than cost saving substance.

It is clever marketing and while it may not be a scam, it is based on tricking customers.

Can The Price Promise Backfire?

I went to Tesco on Saturday and when I paid, I received a Tesco Price Promise receipt that told me I’d saved £0.44 (on a spend of about £50).

Bearing in mind that I bought a number of special promotions including 25% off six bottles of wine, to be told that I’d only saved 44p is really quite alarming.

Some items I bought must have been much more expensive at Tesco than at the other supermarkets.