Category: Customer Loyalty

Maybe Your Prices Are Too Low

It’s a reflex in many sales situations — when you’re competing with others who offer a similar product or service, the first impulse is to cut your price.

What if, instead of reducing your price, you made sure you were the most expensive option in the category?

Columnist Harold Meyerson recently discussed the concept of positional goods as it relates to… hookers. The inspiration for the discussion was an alleged prostitution ring (one of whose alleged customers was Eliot Spitzer) called the Emperors Club, whose professional companions charged up to $5500 an hour.

Positional goods are those commodities that are more valuable than their run-of-the-mill counterparts because a special status attaches to them, since only a select few can have them. Since the Web sites on which prostitutes advertise indicate that the average hourly rate is around $300, the Emperors Club maximum rate, which is roughly 18 times higher, could be justified by the particular appeals and skills of its hookers. I haven’t conducted empirical research on this one, but let me just say: I doubt it.

I suspect that what makes a prostitute worth $5,500 an hour is that she costs $5,500 an hour. The value here doesn’t dictate the price. The price, rather, dictates the value. These women are available only to the wealthy; the ability to hire them, like the ability to live on Fifth Avenue overlooking Central Park, means that you’ve made it. And even if your hour turns out to be a bit disappointing, that’s okay, because $5,500 doesn’t really mean anything to you — which just means you’ve really made it.

And there, I suppose, is the thrill. The power of being able to command the world’s priciest hooker, like the power of owning the world’s priciest real estate, could be a turn-on in itself. The power of dropping thousands and not even remembering what type of woman you’ve booked: Boy, are you ever something! Whether or not you’re getting one terrific woman, the transaction alone confirms that you’re one terrific dude.

I now charge $5500 per script. Give me a call if you’d like to get on the waiting list.

____________________________________________________________________________________

Click this link to subscribe to Portland’s Finest Advertising Blog.

Request your free copy of my white paper, The Seven Deadly Advertising Mistakes and How to Fix Them here.

The Power of Free Samples

If you’re wondering how effective free samples are in influencing consumer behavior, a new study by the Oregon Department of Human Services provides a powerful answer. According to an article on Salem-News.com,

Public health researchers analyzed survey responses from 2,684 new mothers. Almost 67 percent said they were breastfeeding at the time they left the hospital and were still given a free discharge pack containing infant formula. Further exploration of the data showed the women who received the free formula breastfed for a shorter time period than women who went home without a formula gift pack.

There is some debate as to whether this is good or bad from a public health standpoint (and one might spend some time considering the morality of the practice), but it’s certainly an indication that free samples have a strong effect on subsequent buying behavior. It’s hard to imagine a more personal decision than whether to breastfeed a baby, but the evidence indicates that sampling influences that decision more than a little.

 

_____________________________________________________________________________________

Click this link to subscribe to Portland’s Finest Advertising Blog.

Request your free copy of my white paper, The Seven Deadly Advertising Mistakes and How to Fix Them here.

Good Advertising Can Kill a Bad Business

I read that somewhere — unfortunately, not even Google can remind me where.

But it came to mind the other day when I met with the owner of a home improvement company. I’d put together a very powerful ad campaign for him, and we were scheduled to hit the airwaves in six days. But he wanted to postpone it.

My initial reaction was to try to talk him out of postponing. It’s been a rough few months in the industry, and I was convinced that the campaign would truly enter the conversation that homeowners were having as they thought about remodeling.

But he stopped me short with a surprising statement — in the past two weeks, his traffic had jumped considerably. Interest rates had dropped to the point where buyers were finally being lured back into the game. His salespeople were (finally!) so busy scheduling jobs that they couldn’t handle any new ones. He didn’t want the phone to ring until he had more people in place to take care of the new customers.

Although it took money out of my pocket, he was right to postpone. If the campaign had launched and gotten the job done (and trust me… it’s good), he risked disappointing and angering his new customers by putting them off or doing shoddy work. They would have ultimately taken their business elsewhere, and the word-of-mouth would have been disasterous.

Better to wait a few weeks and get it right.

__________________________________________________________________________________

Click this link to subscribe to Portland’s Finest Advertising Blog. 

Request your free copy of my white paper, The Seven Deadly Advertising Mistakes and How to Fix Them here.

What You’re Facing in 2008

Roy Williams’ Monday Morning Memo has a remarkably clear-eyed look at the forces you’re up against as you go to market in a rapidly changing society. Scroll down to “What to remember when selling in 2008.”

Inspirational excerpt:

 “Naiveté is rare today. Your customer is equipped with a bullshit detector that is highly sensitive and amazingly accurate. And the younger the customer, the more accurate their bullshit detector.

When selling, remember: If you don’t admit the downside, they won’t believe the upside.”

When you read the full article, pay special attention to #4, Word of Mouth is the New Mass Media.”

____________________________________________________________________________________

Click this link to subscribe to Portland’s Finest Advertising Blog.

Request your free copy of my white paper, The Seven Deadly Advertising Mistakes and How to Fix Them here.

Advertising Invades the Shopping Cart

The advertising onslaught you face at the supermarket is about to increase — a company called MediaCart, in partnership with MicroSoft, is unleashing targeted video advertising in the cart itself. According to Online Media Daily,

Using Microsoft’s technology, MediaCart will execute anonymous ad targeting through data obtained from ShopRite’s customer loyalty card program. For the system to work, shoppers must first scan their card in the system. They then receive ads and promotional offers based on past purchases and saved shopping lists, which can be uploaded from a home PC.

Will shoppers love this, or will they set their carts on fire in protest? Stay tuned — the experiment will begin later this year at ShopRite stores on the East Coast.

____________________________________________________________________________________

Click this link to subscribe to Portland’s Finest Advertising Blog.

Request your free copy of my white paper, The Seven Deadly Advertising Mistakes and How to Fix Them here.