It’s not about pricing, it’s about perceived value

I work for a company that sells a lifetime holiday product. We often get questioned about the value of our product. The sales process is getting harder and harder every year. It seems like the only tactic that works is to give a discount.

It gets me thinking. Does our product have poor value? How can we prove our product value? And most importantly, how do our potential customers create the perceived value of the product?

I don’t have the answers to the first two questions (yet). But, my assumption that could answer the third question is our potential customers compare our product value with the discounted holiday offers in the market. Online Travel Agents (OTAs) have done a great job in creating the perception that doing business with them offers a great value. And, it could be true but it’s not always the case.

People’s brain is lazy by nature. People always choose the easiest path to get something. If we want to prove our point, we have to come up with a way to show customers that their perception is not accurate.

In our case, the challenge is we need to find a way to overcome the time gap. Our product offers a lifetime holiday, while customer’s mind looks only at a short term horizon (many compare prices on OTA websites). Our sales and marketing strategy should start with this thought.

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It’s time to change

The plus side of the current virus crisis is that it allows companies to think if what they are doing is the best way to do business. Many are finding the way to reduce cost and find their ways to come back. Some companies didn’t do well before and now could hide their issues behind the virus pandemic.

Changing business model is a big deal and wouldn’t happen often. If you are a sales-driven organisation, it’s likely that you have been struggling for a while. You probably are in a discount game and in a cost cutting mode for a while. These 2 words are a clear signal that you have to change. And, there is no better time than using this crisis to change. This is because you are about to have another cost cutting exercise.

I am a firm believer that demand creation should be done with marketing. This is because the focus can be placed on solving customer’s problems and on building up brand for a longer term. Putting sales in front of the business model means the focus is ‘right now’. And, it doesn’t matter if a solution is right for customers or not.

It’s time for companies to put customers in front of their business model. And, the way to do it is to have an infinite mindset with marketing thoughts. As Steve Jobs once said – “Marketing is to create demand, sales to fulfil it”.

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The rule of 7

For marketers, it’s argued that this rule still applies:

Your prospect has to SEE or HEAR your marketing message a MINIMUM of seven times before they take action.

That’s one of the reasons why customers are bombarded with the same messages or the same ad over and over.

In the online world, we can use social media to schedule posts to achieve the rule of 7. Technically speaking, there are 2 methods to do it:

  1. Remarketing: A lot of companies use this method. An email is sent with offers. Customers click on one of the offers and may delete the email. Then, those offers follow them to the website they visit or to Facebook feed, etc. The only annoying thing for me using this approach is the same offers still follow you even though you already bought the offer.
  2. Drip marketing: Drip Marketing campaigns allow you to send a set of messages to your potential customers. Drip Marketing campaigns enable you to consistently send your message out to your audience on auto-pilot. You can target emails and social media to deliver your messages.

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Prepare yourself for the post-virus era

I am still on that though, the though about how to survive as a marketer after the crisis ends. I keep on talking about the future and I have been told in numerous occasions that we only focus on short-term. I don’t think that short-term thinking is encouraging. At the end of the day, lives will have to move on. As a leader, we need to give hope.

In a marketing area, due to social distancing, more and more people will live their lives online (even more than today). The skill sets that would be useful will be 1) new ways to communicate to customers using online channels and 2) creative content creation.

For the online channels, messaging technologies like Whatsapp, Line, and WeChat will rule the world. They will become a one-to-many channel and we may not need for example Facebook feeds anymore.

In terms of content creation, there are a lot of rubbish content out there, ads included. Content will be created for specific niche markets. Content for mass market will actually be dead, after have been in a zombie stage for a while.

Are you ready for the new world?

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Marketing opportunities during the lockdown periods

Who would think they could compete with Zoom in a video call/conference market? During the lockdown periods, online platforms that allow people to do activities, well online, are on the rise. Zoom’s stock price has increased more than 117% over the past 3 months.

Then, come along Houseparty. It is a FaceTime meets Zoom meets trivia–style app that got over 2 million downloads last week. It targets different segments from Zoom. It is less official with more entertaining features than Zoom.

When joining Houseparty, the app asks permission to connect with your contacts and social networks so it can add existing contacts to your friends list. Opening the app signals that you’re around and free to talk and displays a list of friends who are online and “live” parties you can join. There’s a dropdown tab for games, which include HeadsUp, trivia, and Quick Draw!

Every crisis has opportunities in it. The best approach to a crisis is to imagine how consumer behaviours would change after the crisis ends. They could be more health conscious. More companies might adopt a work-from-home permanently to reduce their office leasing expense. Those post opportunities to people who are creative with forward thinking.

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Reach VS Impression

I don’t normally look at the reach and the impression data. I always jump to the conversions. As it turns out, reach and impression are a good indication of how good content is (I view ads as an annoying thing that marketers do but I buy lots of ads!).

So, what is the difference between reach and impression?

The content that you look at counts as reach. In simple terms, reach refers to the total number of users who choose to see a brand’s content. Reach focuses on getting people to click on your content.

On the other hand, impressions refers to the total number of times when users were exposed to your content on social media. Impressions do not measure whether or not people actually clicked on a link. And they do not measure whether or not a viewer engaged with a post.

They are both important in the following ways:

  • Impression gives you a basis to justify if users engage with your content or not. If your content shows up a zillion times but the reach is very low, you have to rethink about your content.
  • But, if you have very high reach with very small conversions, your content may be good but you probably offer it to the wrong target groups.

At the end of the day, you don’t need a large number of everything. You better have a small number from the right groups of people.

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Stay top of mind

Under the current difficult situation, should we stop all marketing activities? I have this question in the past few weeks. And, I haven’t had the time to answer it. So, I try to answer this question today.

One thing for sure, we should stop all promotional activities. It’s disrespectful to our customers and to the situation to do promotions right now. We should save marketing spends until the situation is back to normal.

However, we should not disappear from our customers. We should ‘stay on top of mind’ and make ourselves useful. We should engage with customers by

  • offering updates about the situation
  • providing tips that add value to their daily life
  • entertaining them in an appropriate way
  • keeping them dreaming about the world after the crisis passes

That’s what we should do.

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What is microcopy?

It is a simple concept that is so powerful. It could turn users into customers and customers into friends. It’s a great branding exercise.

Microcopy has been widely used in tech space. It is small and tiny bits of copy that guide users (or customers) through product experience. What brands could do is to use the concept in, for example, packaging, or as a note in customer journey.

Imagine you enter into a hotel room, open a bedroom and see a short note suggesting activities you could do in the area. Or, you open a bottle of wine and see a word “good luck” under a cap.

The concept is nicely wrapped around by this sentence – Words are giant so keep them small.

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Going niche

No product could serve everyone (well except water and electricity). Minimum viable audience (MVA) is the way of survival. It’s about time for hospitality companies to adopt a laser-cut niche product (and marketing) strategy.

American Express GBT (Global Business Travel) is a good example. They are a credit card company focusing solely on businesses. They just launched a service called “Rest Assured Solution”. It’s an online travel booking platform for business travellers. Their research shows that some of business travellers make bookings outside the company’s policy because they can find cheaper rates out there. As a result, GBT incorporates this rate guarantee feature in this service.

Who are your minimum viable audience?

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*Credit: I took the minimum viable audience from Seth Godin – my (book) marketing mentor.

Subscription model

Do you know Panera, a restaurant chain in the US? They recently offered a $8.99 coffee monthly subscription. Customers can take unlimited coffee under this offer.

They decided to offer this program after a few months of testing. They saw more than 200% increase in the frequency of visit, which is expected. The best part is there have been about 70% increase in food attachment. It’s like they use marketing money in this subscription offer to sell their core product which is food.

Can you add a subscription model to your product or part of your service? If you can and want to, I suggest you to build a strong financial model to justify it. A wrong calculation could cause a major issue.

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