Pillar 5 Lead Conversion And How To Increase The Number Of Orders You Receive

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

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.

A friend emailed me yesterday about the issues involved with promoting your business by trying to increase the fear, uncertainty and doubt in the minds of your prospective customers.

“Frightening the horses” was the phrase he used.

So it is it a good idea about…

Selling On Fear Uncertainty & Doubt

Using FUD (fear, uncertainty and doubt) has to be carefully handled as it can push potential clients away as easily as it can pull them towards you.

I think this is where ethics comes into marketing and selling.

Selling on FUD is fine if:

• You have genuine doubts on what is going on.

• You’re trying your best to prepare people for bad times but with their best interests at heart.

An Example Where Selling On Hope Rather Than Fear Was Wrong

Look at the property bubble a few years ago and how some people were pushing property purchases in Spain. 

Prices were high but would they go higher or were they about to crash?

Most property developers were pushing a line that went “buy now before prices go higher”.

That’s selling on the hope of better things – you can make a capital gain from your investment in Spanish property although there is also the fear that, if you delay your purchase, it will cost you more.

What if a professional financial adviser came out with a contrary view “7 reasons why you need to delay your purchase of your dream Spanish villa until after the property crash”.

This adviser has recognised the property price bubble and is taking the stance that property prices are going to fall. (He was right).

Fear Vs Hope – Standard Wisdom or An Alternative View

There are two ways to thinking about presenting your case:

• Joining in the conversation going on in the prospects minds – things are tough, it’s time to make difficult decisions, but you need help to look at the financial issues involved in these times of uncertainty.

• Being a contrarian. This has the advantage that your message will stand out from the crowd and attract more attention although many will reject the basic premise – green shoots are starting to appear after many years of troubles. Your competitors are weak and opportunities are about to appear that you can take advantage of if you’re properly prepared.

I was writing this morning about how some people are motivated by moving away from problems while others are motivated to move towards solutions. (What Should I Do Before Starting A Business)

Similarly, some people will respond to messages of fear, others will respond to messages of hope.

Both are open to manipulation by the unscrupulous but both are legitimate if the thoughts behind them are based on the best interests of the client. 

What Are Your Thoughts About Selling On Fear, Uncertainty & Doubt?

Do you think sales and marketing promotions should emphasise the positive rather than the negative?

People are vulnerable when they are hungry, angry, lonely and tired (Marketing To Emotional Weaknesses)

Selling & Marketing Hope can also be very manipulative.

There is an ethical issue involved with marketing since you are looking to persuade someone to do something that they didn’t intend to do. Is all marketing manipulative or are their lines that should not be crossed?

Or it it a case of caveat emptor, buying beware?

My own view is that the best marketing is persuasive but it moves people towards taking action that it is in their own best interests.

I want to tell you about a training program that caught my eye recently, Effortless Influence from Daniel Levis.

Effortless Influence – affiliate link
[continue reading…]

In the rush to sell products and services, too many businesses make the mistake of creating marketing materials without first focusing on what customers want.

I like customer value thinking and the idea that we buy based on a hierarchy of product attributes, expected consequences and desired goals. These concepts pass between rational and emotional justifications and between the conscious and unconscious minds.

That makes answering the question “What do customers want?” complicated but if you want to different your business and make your marketing more successful, it is worth spending the time thinking through what customers want and carrying out research to find out what customers think they want.

People buy items not for what they are but what they do and what they say about themselves (to themselves and to others).

What Customers Want

In the article I intend to bring together various insights into what customers want and what motivates them to buy including references back to the motivation theories developed for employees and how that relates to buying decisions.

Beware The Concept Of The Average Customer

First I want to break the idea that you should find out what customers want on average and set out to provide that.

There’s no such thing as an average customer but instead segments of typical customers, some of whom are more typical than others.

This is most vividly demonstrated by the example of people and how we are split into two genders, male and female. The average person with one testicle and one ovary doesn’t exist.

It reminds me of the joke about the statistician who had one foot in a bucket of freezing water and the other foot in a bucket filled with very hot water and said “On average I’m fine.”

Creating Customer Personas To Reveal What Customers Want

In face to face selling, we have the option to continually adapt our message to what the other person says which is a powerful advantage although it does open the door for manipulation and deceit by the unethical.

In marketing, we usually lack the ability to adapt the message based on responses on a one-to-one basis but we can create personas or avatars based on typical customers and how they think, feel and act.

What Customers Want According To Rich Schefren

One of my Internet marketing mentors, Rich Schefren, recently sent out an email which included a list of 25 human needs and desires. Hopefully he won’t mind that I’ve shared them with you.

1) Add More Fun To Their Life
2) Avoid Criticism or Embarrassment
3) Escape Physical Pain
4) Be A Good Parent
5) Be More Efficient
6) Be Healthier
7) Be Fashionable
8) Be Independent
9) Satisfy a curiosity
10) Be More Popular
11) Be Proud Of Their Possessions
12) Be Recognized As An Authority
13) Satisfy Their Ego
14) Escape Shame
15) Express A Personality or Creativity
16) Fulfill a Fantasy of an Adventure
17) Gain Confidence
18) Gain Knowledge
19) Save Time or Money
20) Work Less
21) One-Up Others
22) Overcome Obstacles
23) Protect Oneself And Family
24) Relieve Boredom
25) Renew Vigor And Energy

Rich doesn’t claim that the list is everything that customers want but it is a good starting point.

The exercise he suggested was to take each item and to look for connections with your product or service so that you can see how you help customers satisfy a deeper need.

What Customers Want – The 37 Livingston Emotional Benefits

Another or my Internet marketing mentors, Glenn Livingston, introduced me to the work of his wife, Sharon Livingston and the 37 Livingston Emotional Benefits.

1. Feeling Loved
2. Feeling Attractive
3. Sense of Adventure
4. Feeling Financially Secure
5. Sense of Accomplishment
6. Feeling Caring or Nurturing
7. Being Altruistic
8. Being Assertive
9. Feeling Brave or Courageous
10. Feeling Creative
11. Excitement or Liveliness
12. Feeling Fair, Just, or Ethical
13. Feeling Luxurious or Pampered
14. Feeling Healthy
15. Feeling Athletic
16. Feeling Flexible or Adaptable
17. Feeling Free
18. Being a Good Friend
19. Enjoying Humor
20. Feels like a Good Teacher
21. Being In Control
22. Feeling Independent
23. Being Insightful
25. Feeling Wise or Intelligent
26. Taking a Leadership Role
27. Peaceful – Relaxed – Calm
28. Having a Sense of Power
29. Being Productive
30. Feeling Respected
31. Feeling Spiritual
32. Feeling Sexy
33. Feeling Romantic
34. Feeling Safe
35. Sense of Belonging
36. Feeling Trustworthy
37. Feeling Unique

What Customers Want – To Be Continued

This looks like it will be a very long article, so I want to take my time putting it together provided there is enough interest shown in the topic.

If you’d like to know more about what customers want, leave me a comment and share your ideas and thoughts.

I love Amazon and it’s very useful to look at the Amazon strategy in relation to my Six Step Profit Formula.

Summary Of The Six Step Profit Formula

The six steps in the profit formula are:

1. Find a starving crowd.
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2. Create an irresistible promise.
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3. Get your irresistible promise in front of the eyes and ears of your starving crowd often.
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4. Deliver on your promise with a great customer experience.
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5. Sell them a second course and then a second meal.
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6. Encourage word of mouth referrals.

How The Six Step Profit Formula Is Used In the Amazon Strategy

Step 1 – Amazon Strategy & The Starving Crowd

Amazon first started as an online book store.

The business model was new but what was sold was well established.

People love buying and reading books. As a book addict what stopped me buying more books was that my knowledge was limited to what I saw on the bookshelves on the big book stores in the UK like Waterstones. If I saw something I liked the look of, I bought it.

Step 2 – Amazon Strategy & Their Irresistible Promise

While physical stores are limited in the books they can stock on the shelves, Amazon could list every book that was published and quickly became the “biggest book store in the world”.

One quick search by title, subject or author would bring up a list of books and you’d realise that there were many more books that you could read. This is the long tail that Chris Anderson wrote about which makes selling low volume, niche products profitable when sold worldwide.

Even better, other customers of Amazon have provided reviews of the books, praising some and criticising others. This gives you confidence to try a book you haven’t had the chance to skim.

Amazon has since extended their range from books to CDs, DVDs, games, electrical equipment… in fact you can get almost anything through Amazon these days that isn’t perishable.

Step 3 – Amazon Strategy & Presenting The Promise To The Starving Crowd

According to Alexa, Amazon.com is the 15th most popular website in the world and that is just their American store. I buy from Amazon.co.uk which itself is the 127th most popular website and many other countries have their own local websites.

Amazon are one of the businesses – like Wikipedia – that dominate Internet search listings.

I usually recommend that businesses also use outreach marketing tactics but unlike many of the dotcom that crashed and burnt, Amazon didn’t waste money trying to promote the brand name. It let its customers do it for them as we’ll see in step 6.

Recently Amazon has been more active promoting the Kindle on TV and in print advertising but with the Kindle, it’s creating a market for people to read ebooks.

Step 4 – Amazon Strategy & Delivering On The Promise

I buy very regularly from Amazon and their service is excellent.

It is very easy to buy and the One Click feature makes it very fast if you don’t have to change payment cards and delivery addresses.

Products arrive when expected – or they email me to tell me there is a problem – and in good condition. If there is a problem, then Amazon put it right quickly.

The confidence in Amazon’s service helps to create word of mouth recommendations.

Technology and the development of the Internet have made Amazon’s strategy possible but it is clever business design which has powered the success.

Step 5 – Amazon Strategy To Encourage You To Buy Again

As you buy, Amazon suggests other items to buy with little bundles and extras.

It also lists books, CDs, DVDs etc that will be released soon and encourages you to pre-order with the assurance of the price promise that makes sure you get a good price.

After you’ve bought, you receive email recommendations based on your purchases. This works well if you’ve made personal purchases, not so well if you buy presents for others.

Step 6 – Amazon Strategy and Word Of Mouth Recommendations

Amazon do what they do so well that it creates plenty of word of mouth recommendations. The entire Amazon system is easy, quick, simple and very convenient with very competitive prices.

Amazon were amongst the first businesses to realise the power of affiliate marketing and thousands of websites contain links and Amazon logos which help to build the brand.

The success of Amazon as an Internet pioneer also means that it has received great PR. Amazon is the example for an e-commerce store.

What Are Your Views On The Amazon Strategy?

Recent figures show that Amazon continues to grow very quickly.

What do you think of Amazon’s strategy?

What do you think the key success factors are?

A survey by Vodafone has found that one in three businesses would take their trade to a competitor if the supplier didn’t respond within two hours of sending an email.

More details

It shows how much of a time pressurised society we live in although I suspect that the true statistics will vary enormously depending on the product or service.

More alarming is that 85% of those people surveyed admitted that they had made enquiries and never received a reply and 10% said that happened regularly.

This echoes some previous research I saw when companies who advertised in a magazine were tested to see what happened when enquiries were made. The results were shocking – about 40% never heard any more from the company.

Is it time that you took a good hard look at your business and what really happens rather than what should happen?

I’ve mentioned the concept before, but there are Moments of Truth when the customer comes into contact with the business. A great business focused on customer service and delight makes sure that all these contacts are intentional – what you want to happen, actually happens.

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[6Steps]

How do you motivate a prospective customer to buy?

It’s a big question and I have been disappointed in how little academic research there has been done to look at what motivates someone to buy something.

Allan Mackintosh of performance coaching firm TeamBuilders International has written an article that is included in the November 2007 issue of Better Business Focus that looks at this very issue. [continue reading…]