43 replies to this topic

[Black_Knight]

While competing on pricing has sometimes been said to be the weakest form of competition (since it can lead to price wars that harm your own profits as much as the competitors'), pricing is always an essential part of marketing.

I have written in the past about ways to alter the way that prospective customers will view your pricing, or rather, their perception of value for money. In this I showed that presenting goods (and your company) as quality rather than economy, is a method to seem lower-priced than expected.

However, a new study highlighted by Wharton, has shown that most people automatically assume that they are being gouged on prices any time they shop.

Read the full report at: http://knowledge.wha...4&articleid=622

The article makes for grim yet essential reading, and I think underlines my claims elsewhere previously that we all need to think a lot harder about value for money, and how we help our customers see it.

[markymark]

This is not really my field, to be honest, but I think companies in general need to be aware of what they are actually selling.

Saying, for example, 'we have the cheapest coffee mugs' on the web is not going to persuade me to buy, even if the designs are nice and the pictures clear. However, a site that said, 'Our coffee mugs are designed to keep your coffee hot for longer.' and then a quote like this :

'As a busy SEO who gets caught up in what he's doing, I often find that by the time I get to drink my coffee, it's already cold...these Acme coffee mugs really do keep the coffee hotter....so when I do find time to have a sip, the coffee is still nice and warm. '.

That would get my business every time.

The point is this: it is the features and how they are presented that sell products. Price is a secondary consideration to buying something that does exactly what you want it to do.

Companies need to clearly differentiate themselves from their competitors and sell these differences rather than the products themselves. It is these differences that make up perceived value for money, not the cost.

[glyn]

Agreed, but - for online marketing - the reality of getting your page content ranked, unless through a ppc route would be....


coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee,

:twisted:

[markymark]

Very helpful post that. Thanks. :roll:

[bragadocchio]

Thanks Ammon,

That was interesting. I hadn't been looking at the stuff coming from Wharton, but I will be. I have a friend in the MBA program there. Maybe I can get an advance copy of that white paper.

I don't know that I trust a test group comprised of 1,100 college students, even with the 3,500 phone surveys in Florida used to substantiate the findings.

But, the conclusion isn't unreasonable: Give thought to how you present value. (and try to do it without starting a price war.)

[SEO Guy]

Good Point, Marky Mark

I believe that people want to be sold to. They need/want to buy products, but the large majority of people want to be convinced that they are making the right decision. They want to be wooed.

I know that when I am on the verge of a large purchase, I do the research and compare product differences. However, if I go the store and the salesman just assumes that he doesn't have to sell me, I'm disappointed. I want to know that I am making the right decision.

We need to persuade and reinforce the needs and desires of our clients, and speak to the need in a language they understand.

[Farhan]

Yeah very true Markymark.

It's not the product but the features that people buy. You have to make those features fit their needs.

In your example of coffee mugs, you knew your target market very well. And that's the crux of the game. When you know who you are talking, it's a lot easier, which is however not the case all the time.

[Farhan]

Agreed, but - for online marketing - the reality of getting your page content ranked, unless through a ppc route would be....


coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, 

:twisted:

That much of caffeine is injurious to health :roll:

[cre8pc]

The point is this: it is the features and how they are presented that sell products. Price is a secondary consideration to buying something that does exactly what you want it to do.

Heh heh, which brings me one of my favorite usability stories! Sit back and listen now...

There was a usability study on web sites that sold shoes via online catalog shopping. Each site was tested for click thrus, sales, and other factors. Only one site seemed to be selling far more shoes than the others, particularly a certain expensive hiking boot that the others offered as well.

When they studied the UI (user interface) and spoke to users it became apparent that what was selling that shoe was the pictures! Turns out people who hike know what they want. The catalog pictures highlighted the tread, workmanship, etc. and the description backed up the picture with details hiking boot shoppers seek.

How did they know to provide this specific info? The web site owner got a shoe salesman to advise them on their catalog! This is how they knew what shoppers are looking for.

It's more than price. It's knowing the product really well and sharing that knowledge.

Amazon tapped into that theory with it's reader reviews of books. Download sites that allow user feedback, pro or con, is another one. I always read what users say about a freeware/shareware download before I try it.

Kim - in her rocking chair, telling stories

[Black_Knight]

It's more than price. It's knowing the product really well and sharing that knowledge.

Amazon tapped into that theory with it's reader reviews of books. Download sites that allow user feedback, pro or con, is another one. I always read what users say about a freeware/shareware download before I try it.

I fully agree Kim, which is why I became so interested in Epinions.com and later went to work with dooyoo for a year. Peer review is a powerful thing. I think it strengthens our ability to associate ourselves with the idea of owning and using a product in ways that average sales copy rarely attains.

I particularly like the quality of the consumer reviews on dooyoo, and I often study user opinions on sites owned by my clients, or their rivals. We all need to be aware of sites like these, because it could just as easily be one of us that gets reviewed, as happened with AIM-pro or to a less positive end withSearch Engineers. :shock:

Most importantly, these sites provide a huge insight into both usability issues and personal tastes of surfers, that you can target to very specific groups (all without paying for extensive market research). Many of these users write reviews of products, services or websites that go into thousands of words, and never once mention the price in most cases.

[Aaron]

Yeah very true Markymark. 

It's not the product but the features that people buy. You have to make those features fit their needs.

I contend that it's not the features that make people buy, it's the company telling the buy how they will benefit from the product/service.


"Our product can do this this and oh yeah, this too."

or

"Our product saves you time!"

Knowing that something will save me time I will read further to understand HOW it can do that, not because it has bells and whistles (features) telling me what it does.

I want the company to identify a need or problem I have and then present information on how to solve it.

Just my thoughts.

Aaron

[bragadocchio]

I'm not that sure that your point is all that different from what is being made, Aaron. But it could be and I may be misunderstanding what you're saying.

If you could paraphrase it for me, I might get it (I can be dense sometimes -- but I've found that if you don't ask, you never learn.)

Here's what I think that you're saying in the context of this thread:

The "features" that compel people to buy -- aren't those the aspects of a service or product that fulfill a need? If we can get people to focus upon the need and its solution, the price becomes less of a consideration.

Thanks.

[Aaron]

Here's what I think that you're saying in the context of this thread:

The "features" that compel people to buy --  aren't those the aspects of a service or product that fulfill a need?  If we can get people to focus upon the need and its solution, the price becomes less of a consideration.

Thanks.

You got it!

I was simply responding to the comment on features versus being sold on a solution to a problem.

I find in our industry (web development and SEO services) we can't tell a client or potential client about the features, we need to hit them where it counts - either in the pocket book or solving a problem.

Example...

Optimizing your site for the Search Engines give your business more opprotunity to rank well because it.. blah.. blah blah...

or...

Learn how propoer web site development can mean a 35% increase in sales with a ROI of over 15%.


Which sounds better? I know the latter one isn't as good as it could be

Aaron

[bragadocchio]

Thanks!

I agree with you. The focus shouldn't be upon features, and trying to find which features fit the needs of the buyer.

The focus should be primarily upon the needs of the buyer. Here's the problem, and here's the solution.

Let the browser know why something might matter to them, and you stand a greater likelihood of changing them from a surfer into customer.

I know the latter one isn't as good as it could be

But, it's still better because it focuses upon what the visitor wants.

[Peter]

All really good points - translate features to benefits, make the customer feel special or sold, information (product knowledge) rich communication and so on.

I can only add testing to the mix. markymark nailed my buying pattern (value pricing), but that's not everyone's.

"Fits securly in your drink holder", "Easy grip handle for arthritic hands", "Non-skid bottom", "Optional lid with sipping spout to avoid spills around sensitive electronic equipment - computers" "Rubberized drinking spout on the optional lid for denture wearers with sensitive gums" (ok, I'm reaching).

Alrighty, seems like we've got a pretty complete design here. We phone the consumer and they say: "Don't like 'em", "I want happy colors". Whatever that means or a glazed finish or traction bumps so they can hold it more securely. I suppose if we threw an Elvis picture on it, that might fly too. Some might just say "cheap", I want "cheap".

Ask consumers. They'll tell you. Wordtracker, Overture and the google popularity tool will give some indication, but if you really want to know what's on a customer's mind; ask.


Peter

[manager]

Howdy,

translate features to benefits, make the customer feel special or sold, information (product knowledge) rich communication and so on.

Ok, I hear what you and others are saying, but that’s probably more relevant to services than physical goods. My slightly ranty contribution focuses on goods not services.

I always feel compelled to point out when all else is equal, ie your competitors are also offering excellent customer care – as a consumer I will go for the lowest price – simply because I’m not crazy enough to pay more for something because of any subjective spiel I read on a website.

I’m not gonna buy coffee from A simply because B doesn’t have a blog about coffee, and A appears more knowledgeable and nicer, if they are selling the same product. As a matter of fact I would research the product on A's website and buy from B.

Many online product sellers simply “paste in” the manufactures sales orientated description of the product complete with features.

If there are any online merchants out there who think using automated “personalised” emails is gonna impress me, or make me feel special - think again, it’s not gonna happen.

Dearest <? Echo “addressby_name_preference”; ?>
I love you so much for buying <? Echo “productname”; ?>

Should I become a repeat customer the hollowness of automation becomes apparent.

If I want to feel special I will buy in a "bricks and mortar" shop, were I have the advantage of having my questions answered immediately,and don’t have to wonder how long the delivery will take, or if the product is as described.

TreV

[bwelford]

Hi TreV

I'm not sure why you brought up this old thread (perhaps there's a story there) but it seems particularly appropriate just before what is unfortunately one of the biggest commercial periods of the year.

I'm sure there are others who think like you. However some others are influenced by the 'pretty box'. What a seller has to figure out is whether the 'pretty box' persuades enough people to buy that the sales targets will be achieved. It's all a question of percentages.

[travis]

We use a similar approach called FAB. This English client taught it to me once.

Features...Advantages...Benefits

Customers dont mind listening to features, and they may even read about the advantages, but they are mostly interested in their own greedy little world where they benefit.

It all comes down to psychology, and the fact that in mass retail, you can count on humans ultimately being totally selfish and oriented towards their own little world where they will dwell endlessly about purshasing something for their own glorification.

Getting your product or service into that selfish little world is the key.

Sometimes the benefit of a product feature will be self-explanatory, or the customer is educated enough to know what they want, but for salespeople with a sales on the line, they need to get to the benefits quickly.

So for a V8 car, the features might be something technical like

(i) a dual exhaust
(ii) bonnet scoops
(iii) 8 cylinders

The advantage might be:

40% more power than a standard V6;

But the benefit would be:

You can drag people off at the lights 9 times out of 10.
You can really flog it on the freeway and think you are Peter Brock.

Getting into the customers world and understanding their greedy little perspective is most important.

Depending on the product, the marketing would have a mix of all three, but the end result in the customers mind should always be the "benefit" to their world.

[manager]

Hi Barry,

I'm not sure why you brought up this old thread (perhaps there's a story there)

He he……….. I must have observed someone else reading this thread and thought – that looks interesting; maybe I should have checked the date.

All I expect from online product vendors is that:
1. They stock what I require.
3. Their prices are the lowest.
4. They facilitate a secure transaction.
5. They deliver my goods very quickly

Open Question: Tell me how you can get my business if you are £30.00 dearer than your competitors when they also fulfil the above criteria?

For many people price is the main reason they buy online, I don’t think I’m in a minority here. It’s the “trade off” for not getting to touch, feel, or try the product before parting with cash, or the relative inconvenience caused when problems arise, when compared to bricks and mortar stores.

Travis, I just noticed your post after I posted

TreV

Edited by manager, 28 November 2006 - 09:55 AM.

[manager]

I don’t see it as anything to do with the greed or selfishness of customers. When all things are equal including the product, it's not greed or selfishness that makes the customer go for the cheapest price is just common sense.