Marketing Strategies – April 9th, 2009

Marketing Strategies – “More Choices = Less Sales”

 I found this fantastic article over that the Neuromarketing blog.

As consumers, we make hundreds of choices each and every day. For those of us who are parents, we make so many more on behalf of our young children. No wonder that by the time it comes to dinner and the question “What are we going to have for dinner” just hangs in the air…

But did you know, that giving your customers too many choices actually inhibits your sales? A 2000 study at Columbia University compared consumer behaviour when faced with a selection of either six or 24 gourmet jams in an upscale grocery store.

Whilst the bigger selection actually stopped people to check it out – 60% vs 40% for the limited selection, the interesting fact was in the actual conversion. Whilst 30% of people who stopped to look at the limited section made a purchase, only 3% that looked at the larger selection actually purchased one.

Let’s run some figures on this - You have 250 people in your store in your jam isle. Of those 250 people, 150 of them stopped to look at your larger selection, whilst 100 of them looked at your smaller section. 30 people actually bought a jam of the limited selection for $5 (example only), which made you sales of $150. Only 5 people bought the same jam from the larger selection, amouting to a mere $25.

Which amount would you rather?? And all for offering less!!

Why does this happen?

According to some further research by Kathleen Vohs at the university of Minnesota, too many choices can sap one’s stamina and ability to stay focused. So rather than making the choice, they throw their arms up and say “I give up!” and walk away. I’ll bet you have done this before – especially in the shops. I know I have!

So how can you choose the right amount of products to offer?

 Well this depends a lot on your industry and your customers. Some good market research would help here. Think though about your customers time. Do they spend time looking over your product? Do they take their time about a decision? Do they absolutely positivitely need your product?

If a leisurely decision can afford to be made, then you should be ok to offer a few more products in your selection. If those people looking to buy your products just want  to grab one and forget about it, then fewer choices is the way to go.

Customer Guidance will always help. Imagine if you were in that grocery store above, and someone walked over to you and asked a couple of questions about your preferences, would you be more inclined to buy – now that your choices have been limited? You bet you will be!

Even if you have an online store and cannot be available to talk to your prospective customers, have a think about this when writing your descriptions of your products. Give them some guidance in the form of : ” If you have children who like to climb and hang of things, then our tear-free range of kids clothes is more for you” (for example!) This also helps to direct your prospective clients around your website, and help your conversion rates.

Read the full post over here.

Email Marketing Tips

Ever wondered how some business owners put out some fantastic emails?

Have you heard the stories of those people who make thousands of dollars just from one email?

Well it didn’t happen overnight. Email marketing takes time and it takes effort. The whole concept of email marketing is to build a relationship with people who have subscribed to your site. There are a few steps to remember to get it right from day one.

1) Put a subscription box on your website. Now, about 5 or so years ago, offering people a free newsletter was fantastic. Now, it’s a pretty lame offer. People are getting so much junk in their inbox, that they are becoming selective about who they receive emails from. So try something different. Offer people something of real value in exchange for their email address. For example, on Diva Promotions.com.au you will find the opportunity to get a free marketing report. In this report, I give out some fantastic free information. People also get automatically subscribed to my fortnightly publication.

Make sure your subscription box is in the top right hand corner of your website. Studies have proven that this is the best place to get the best reponse.

2) Give value! Now that you have people on your database list – give them some good stuff. Make it worthwhile for them to receive your emails. You are now building a relationship with them for future efforts.

3) Be professional. Use a newsletter system that allows your subscribers to unsubscribe easily at the click of a button. This complies with the spam laws and also builds that trust factor

4) Take the time to build a relationship with your database before you try to sell anything. Give it time for them to get to know, like and trust you. Then when you have successfully done this, they will be ready to purchase from you.

5) Make your emails personal. Again, you are building a relationship. You don’t need to tell them about your marriage, or how your kids are getting into trouble at school, but don’t put up a corporate front. Tell people what you are doing in your business, any seminars you are attending, new products you are working on. Give some of your personality in your emails.

6) send them regularly. Once a month is ok, but weekly is much better. However, don’t just send them weekly if you have nothing to offer. In this situation, remember that quality is much better than quantity. Outsource your email marketing if you need to. Remember, this is a fantastic investment – you are building a relationship with potential buyers.

Email marketing can be complex, but it can also be very rewarding. Remember not to treat it as trying to make a quick buck, but rather than building a long term relationship with your subscribers and they will reward you in time to come.

Enjoy!

You can find more  about email marketing over at http://www.divapromotions.com.au/marketingkit.html plus some other fantastic information about finding your target market, segmenting and plenty of other marketing strategies.

Market Research

Why is it important? Have you ever skipped doing it? I did, and paid a princely price for it! I learnt the hard and expensive way quite a few years ago.

Donna-Marie over the Small Business Diva has the following fantastic post on why market research is so important.

What is Market Research and Why is It Important?

Social media – is it for you?

Many people are talking about social media these days. It’s becoming a new ‘buzz’ word. So what does it really mean for you and your business? Should you bother using it? Hopefully this article written by Jacob Morgan can define a few things for you.

 

If you are an individual or a company looking to get involved in social media then you need to be prepared to receive positive feedback and negative feedback.  In my opinion the negative feedback is more important and in fact I would argue that all the feedback you receive is actually positive.  I call it negative feedback because it is portrayed in a critical light, meaning that instead of someone saying how great and amazing you are, someone will tell you that you suck, but the important thing is to find out why.

Positive feedback is easy to give.  Let’s say you release a new widget, next thing you know people are praising you saying your widget is the greatest thing since sliced bread…ya…so?  Sure positive feedback is great, it let’s you know that you are onto something, that you are doing something right.  The positive feedback you get is a good indication that your product or service is satisfying customer needs or wants.  However, you are never going to get 100% positive feedback.  Some of (if not a lot of) the feedback you receive is actually going to be negative, what matters is how you deal with the negative feedback.  Make your negative feedback actionable and turn it into something positive.

Negative feedback is actually positive feedback, stay with me on this one.  Let’s say you create a widget and release it, now instead of praise, people are making voodoo dolls out of you and telling you that your product sucks (ok if they are making voodoo dolls then you probably have a serious problem).  Instead of going into defensive mode, listen to what your users are telling you and make the changes they are requesting.  Look at negative feedback as constructive criticism because that is what it is (minus the voodoo doll).  If people tell you they don’t like something about your product then you know what you need to fix.  If someone tells you that your product or service is buggy, doesn’t work, looks bad, etc. then you know what you need to improve upon, this information is priceless as it shapes your product or service into what it is.    Collectively, your feedback is a giant focus group comprised of users who want to tell you what they think about your product (or you, your brand, your company).  No focus groups is always going to have 100% of the people say they liked the product.

The reason I wanted to address this is because a lot of people are scared to use social media because of the negative feedback they may receive.  I’ll share a little story with you about some negative feedback I received when I first started writing.  During the first month of my blogging I was chastised by a reader who called me out for not editing my posts for grammatical errors.  The criticisms were rather harsh and at first I felt a little upset and defensive, but then I realized that the reader just told me what I needed to fix.  I thanked the reader for his comments and have since tried to be more vigilant of my grammar.  This is just one of the many ways to take a seemingly negative piece of feedback and turn into positive feedback.  I receive comments and emails from readers all the time critiquing my posts or asking me to remove certain aesthetic things, and guess what, I listen and respond to all of them.  Every piece of feedback I receive I consider positive.  The fact that someone is taking the time to interact with me and share their opinion is humbling and I am grateful for every comment or e-mail I get.

How do you respond to the feedback you get?  How have you been able to take a seemingly negative piece of feedback and turn into something positive?

Marketing Strategy

I was reading Seth Godin’s blog and found this fantastic post. Remember when you are creating your own marketing mix, that some of the old fashioned ideas will still work – check out what your competitors are doing and then be different from them.

Enjoy.

Old Marketing With New Tools

Remember hand-written thank you notes?

Then they became xeroxed form letters.

And then mail-merged form letters.

And then Amazon order confirmations by email.

We tend to use new tools to do less. We try to save time and money at the same time, and end up depersonalizing and commodifying what we do.

A simple example: cost and speed pressure means that when you get your car serviced, it’s unlikely you’ll be greeted by the mechanic himself, wiping his hands on a greasy rag, telling you exactly what he did to your car. Instead, you’ll get a difficult to decipher printout.

Why not use the technology to give more?

The mechanic can have a simple digital voice recorder. As he works, he can describe each thing he’s testing and what he finds. You can then email the digital file to Iowa, India or Israel, have it typed up and beautifully formatted and waiting for the customer when he returns. How can that not be worth the $1.50 it would cost?

Or have your private school or summer camp record a 7 minute video on every student every month (that’s a seven minute a day commitment per teacher) and post them privately. Seven minutes is the equivalent of a three-page personal letter, with far less resistance on the part of the teacher.

A friend of mine is wrestling with this right now. It’s so so easy to hide behind technology, to use it as a shield, instead of as a clever tool to actually get you closer to the customers you depend on.

Another example: if you have high-value customers, you should never give them a mass Survey Monkey type survey. It’s dehumanizing and it sends exactly the wrong message. Instead, ask them for feedback by email or web form. A few easy toss up questions and then just ask whether they’d recommend you and why.

If you get 200 responses, you ought to care enough to read and reply yourself. If you get 2,000, go hire someone to digest them all and make it easy for you to see the trends.

Inertia is one reason that techniques like these aren’t done often, but the real reason is fear. We use technology to insulate us from our customers instead of bringing us closer.