MARKETING PSYCHOLOGY REPORT
SAM AND RICARDO own
a small paper products company. Their goal
is to develop a strong retail market for recycled paper products,
especially through Web site sales. It hasn't been working out as
"What's the problem?" asked Sam. "Our recycled
competitively priced, even with shipping costs. But there are so
many other green-focused paper companies out there, its hard to make
"But people are as concerned about the environment as ever,
maybe more so now," said Ricardo. "What can we do to sell more?"
Sam talked to a friend who knew about buyer psychology, since buying
first happens in the customer's mind.
Sam's friend looked at the marketing materials of Sam's company
and its competitors, then pointed out a positioning solution.
"Your e-mail marketing letter tells people about your recycled
products, but not why to buy them from you," said his friend.
"But we say its recycled paper and that it will save trees.
What else can we do?" asked Sam.
"Research shows that people are more likely to buy a
service from a company which they have something ideologically in
common with," said his friend. "In other words, they
want to know
that you think alike about critical issues, like the environment."
"You mean separate from our paper?" asked Sam.
"Right. If you like someone, you're more likely to pick them
over their competitors to do business with. And we tend to like
people who think like us."
Sam tried this out on Ricardo, who immediately understood the
idea. "That is so very true in Mexico," he said. "Why
think about it sooner!"
"So what do we do?" asked Sam.
"We become more than a paper company to them, we become people,"
Ricardo wrote a new e-mail letter that not only described their
products, but emphasized the company's beliefs and actions in
protecting the environment from polluters and clear-cutting timber
"This letter makes me proud of what we've done and what we're
trying to do," said Sam.
"It helps customers to see us as people like them, not
company selling recycled paper," said Ricardo.
The letter worked better than they hoped. Not only did people
order paper, they asked Sam and Ricardo about ways they could help
protect the environment in their areas. This led to a chatty
newsletter about green resources and ideas tried in other places.
Not only were Sam and Ricardo doing good work and selling paper, they
were building up a loyal customer base and creating word-of-mouth
advertising that would keep them growing for years.
you can narrowly define customer niches in which
members share common beliefs or viewpoints, look for ways to show
share some of those beliefs. Also look for ways to demonstrate
through your product or service.
For example, Ben & Jerry's Ice Cream is popular with
environmentalists not only because of its great taste and funky
product names, but because the company gave money to save the Amazon
rainforest, and now uses a new packaging technique which reduces toxic
water pollution. In short, people feel good about buying Ben &
Jerry's Ice Cream.
THE PSYCHOLOGY OF PRICING:
Pricing is tricky, and many books have been written about it
which are worth reviewing.
Here is one point to remember: Price has nothing to do with your
product, and everything
to do with the buyer's perception of your product. You can
prove it to yourself.
Imagine a beautiful, dark-green glazed vase. It has a discrete
price tag on it of $100. While a buyer's evaluation of the fairness
of that price has something to do with the features of the vase
of glazing, etc.), it is also influenced by extraneous factors.
Imagine the vase sitting on a low metal shelf in the Housewares
section of K-Mart, along with two dozen identical vases. Would a
shopper think the $100 price was fair? Not likely.
Now imagine the same vase on a glass shelf at eye-level
in the Home Decoration section of Macy's. Now how fair would it
seem? Maybe a little pricey, but the buyer would be willing to be
convinced of its worth.
Now imagine the same vase in the fine crystal section of Saks
sitting on a velvet cloth atop a stone pedestal and covered by a
Now how fair does the price seem? If its displayed like that in Saks,
it must be valuable,
so $100 may actually seem like a bargain! The vase didn't change,
just its display and environment.
The LESSON is, "Don't
ignore all of the factors extraneous to
your product or service which influence the buyer's perception of its
value. By changing those factors, sometimes at little cost, you
can make your
product seem cheaper or more valuable than it is currently priced."
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BLYTHE AND MURRAY have a furniture store in a good part of
purchased from the founder, who was retiring. In the last
they've seen business decline and few repeat customers.
are we doing wrong?" asked Murray. "It's the same
location, same employees, same stock, but sales are down
20%. What are we overlooking?"
"Something is sure a problem. Traffic has fallen off, too,"
"Do you think something is upsetting our customers?"
what?" asked Murray, sniffing the air. "It smells OK in
here, the lighting
is fine, and we've even got nice music playing.
Your idea about
the snacks was a good one, too."
ask a friend about this," said Blythe. "He's a
psychologist. He should know."
day Blythe talked to her friend, and came back to
Murray with a
serious look on her face. "He suggests that we might
have an employee
problem we don't know about," said Blythe.
they're the same employees that Ralph had," said Murray.
but they're not working for Ralph any longer. Let's do
what my friend
suggests and see."
take a test."
pulled out a single sheet of paper with ten questions
on it. "We've
got to answer these honestly," she said. "No
Then she handed the test to Murray and they began. This is
the test they
SERVICE QUIZ: (choice = points. Add up your points.)
1) Do you spend
time face-to-face with customers asking their
your business operations, products and services?
(This means more
than saying, "How's our service?" as they're
leaving!) Never = 0
Up to 5 customers/year = 1
Up to 15/year = 2
Over 15/year = 3
2) Do you ask
customers what new products or services they would like?
No = 0 Yes
3) Do employees
from your purchasing and product development
with customers to hear their opinions?
No = 0 Yes
= 1 Formal customer advisory panel = 2
4) Do you collect
survey data on customer satisfaction and share the
results with all
departments? (Remember, everybody ultimately works
for your customers!)
No = 0 Yes
5) Do the real
needs and satisfactions of your customers play an
important role in
your business plan and decisionmaking process? (If
always trumps customer service in your business, you
don't get a point!)
No = 0 Yes = 1
6) If a customer
has a legitimate problem or complaint, do you 'go
the extra mile' to
make him/her feel good about your company, or just
fix the problem?
(It's the difference between "Sorry the hem is
torn, just get
another and we'll exchange it." and "Sorry the hem is
torn, let me get
you another one, and here's a 20% off coupon for
inconvenience.") Fix the problem = 0 Do more = 1
7) Do all
employees dealing with the public receive extra
outstanding customer service? (Recognition is nice,
but its money that
counts!) No = 0 Yes = 1
8) Honestly, does
your sales staff think of customers as (a)
beings to be helped, or (b) cattle to process?
Cattle = 0 People
9) Do most
customers return to buy from you again or refer others to
you? No = 0 Yes = 1
10) Is it your
operational policy that customers are nearly always
right, even when
they aren't? No = 0 Yes = 1
how'd we do?" asked Murray.
added up the score and read the scoring rules. "It says
that if we score
below 6, we've got some real customer service
problems to solve
that will likely require an attitude overhaul and
retraining. 6 - 8 is fair to good customer service. 9 and
above makes us a
model for others."
we got what?" asked Murray.
And I'm not even sure our employees really think
customers are people."
need to start doing some of the steps the quiz suggests."
They began by
talking to customers that came into the store and those
in Ralph's card
file. Sure enough, the employees had slacked off
with the new,
looser management style of Bythe and Murray, which made
months of customer service retraining, monitoring, and
evaluations, the store is doing better than ever.
Blythe and Murray
have even set up a Web site. And the first thing
they told their
Web designer was, "This site had better be the
friendliest one on
the entire Web! We want our visitors to feel like
we care about them
when they visit our site."
Follow the Golden Rule - treat people like you want to be
treated. Do you
follow the Golden Rule? This quiz may have given you
a hint, but you
can't really know unless you regularly ask the most
for your business success - your customer.
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