A buying director of one of the leading importers in Europe once said, “Whatever we sell at a mid-price must reach a certain quality level. And whatever we give away must be much better than that.”
“Free” triggers a direct response but the boost isn’t just positive. We become suspicious. Why do they have to give this away?
Which connects with the washing powder mantra, new and improved. Remember the last time when we told you it was the best? Well, that was a lie! It’s even better now.
A pure and positive response to a free gift is much rarer. When something is given away and we are in no way bound to the giver, it triggers ‘worthless’ in our mind. Why would they give it away otherwise? That makes paying of vital importance when you promote something. Even if the amount is small, the mere fact that they take out their wallet demonstrates the fact that customers want to own it.
SOLUTION: You may always give a slight taste to whet their appetite but once you give a full plateful away you are asking for a vote of ‘uneatable’.
The more you pay for something, the more it must be worth to you. Take for, instance, this book. When I needed a platform of recognition I emailed the manuscript to several people asking for their opinions and comments. Getting these reactions was like pulling teeth. No time to read – too busy!
Suddenly it occurred to me it was because they hadn’t paid. Once the book started selling and buyers had to take the trouble to pay, they also found time to read it. The same material had gained value because the readers had to do something to get it.
FOCUS: Explain why you are doing what you do. If it makes sense, the reason adds excitement and credibility to the whole project. With the sportswear company, our story was that we were wholesalers, not retailers at all. We just cleared leftover stock part time, a minor part of our business. That made sense.
ELABORATE: Always prepare your reasoning even if you think it is obvious. Take the time to explain anyway.
SOLUTION: Certain reasons appear to give an electric signal to the spine of your counterpart. Easy to recognise, these always go hand in hand with the Story2Tell.
FACT 10: We ponder over decisions but fail to question our impulses
FOCUS: The very same people who brood endlessly over decisions accept their impulses with closed eyes.
ELABORATE: It never enters our mind that the root cause of these impulses could have been planted by the actions of someone else! Whatever comes from our own brain must be safe and can never be mistaken.
SOLUTION: So while an impulse is not by any means a decision, it leads to exactly the same basic result – a yes or a no. We may think we accept or decline offers on the basis of our decisions or impulses but in fact it is always a combination of both.
The key to thought manipulation is that the explanation steers the decision.
FOCUS: Before every decision comes a thinking session
It would be great if this was always the case, but this sentence is both true and false because even when we really consider and weigh arguments, both pro and con, we invariably do so according to the impulses that we are receiving at that moment and they never come with a label of explanation. At least not the right one.
ELABORATE: We really decide based on a confused combination of hunches, emotions, past references, facts and feelings. We are not able to make the calculated, well-balanced decisions we give ourselves credit for. The coldest bank manager may try to act like a computer and study only the figures. In fact he can only manage such a clear vision if he never meets the person in question. Otherwise, that individual will leave some impression that will influence his decision one way or the other.
So details – no matter how small – play a decisive role in our decision making.
SOLUTION: We will explain these impressions, interpretations and impulses to ourselves as well-founded decisions, but really we just make up some kind of explanation afterwards. Rarely does anyone admit they “decided” something based on a mere impulse. But don’t let that fool you because it happens all the time.
Professionals seek past references. What did a similar item sell for in the past? What did we do last time this happened to us? This is not so much thinking, as basing one price upon another one. Without past references we are sailing blindfold through uncharted waters. We are forced to think, to balance without the benefit of a safety net. This is clearly not to our advantage.
FACT 11: Auction mind set: accepting a value based on what someone else thinks it’s worth
FOCUS: We feel that only the difference between our prices is at risk of being “wrong”.
ELABORATE: The economic Fairy Tale is that manufacturing and design costs are the basis for all prices, plus, of course, you get to pay for shipping, import duty, and profit for the importer, wholesalers, sales reps and the profit of the stores. There you go! That’s everything!
A great story, but overtaken by the present. It started like that in the Middle Ages, perhaps. Now greed rules with an iron fist.
SOLUTION: A particular model of cell phone can be sold for one dollar, or for three hundred, although the production cost is eight. Yes, there are many ifs and buts attached to the lowest price but much of the value is up in the air.
Any item is only worth what customers in large numbers (who know of its existence and location, in other words exposure) are willing to pay for it.
Think this over. The price is accepted or declined by groups of customers. If they decline unanimously, we are forced to lower the price we came up with.
The decision-makers of multinationals who introduce a new product venture a guess at what is the highest price Joe Public will accept. First there is the group of eager ones, who are willing to pay top price for the latest model. When sales calm down, they direct their attention to the next group who can take it or leave it. Meanwhile, they make a new range for the ones who always want the latest model. Last to be served are the bargain hunters, who are getting model one when edition three is out. When the price fall has bottomed out the item is discontinued.
FACT 12: Prices and proposals are not accepted on merit, but on presentation
It is no wonder that the manner of price presentation gives many subliminal messages.
The ladder of price acceptance
FOCUS: Getting a price accepted
ELABORATE: We are well aware that some values are accepted without discussion while similar ones are refused.