50% of Everything in Store! 1 Day Only SALE!!
Ever seen this before?
Of course you have. But the real question is…Did you buy anything?
You might be walking down the street on the way home from work, you’ve got your whole night planned and you just can’t wait to get home and unwind. But then you feel the urge to go buy something on sale, I mean it’s 50% off right and it won’t be that cheap tomorrow.
Maybe you bought something and maybe you didn’t. It really depends on how much you rely on impulse in your decision making. I’m going to take a wild guess and say that as a engineer or scientist you are probably more inclined to use rational for your decision making, but hey many OTHER people rely heavily on impulse probably bought some cheap T-shirts they didn’t really need from that ’1 Day Only Sale’.
There is a shop down the road from where I live. It sells clothing and souvenirs all at $10, but the thing is: everyday I walk past there are people on the street promoting a ’1 Day Only Sale’ where everything in store is not $10 but $5. Everyday they promote the same sale.
As I walk past, they are always full and busy so IT MUST WORK!
Their marketing plan is built of the fact that in Hollywood there are new tourists everyday who, unlike myself and the other local residents, know that they are having the same sale every single day.
Now you are probably thinking that you’d never be interested in buying something you don’t necessarily need just because it’s on sale but hey; many people do. So the fact that this kind of marketing works highlights something interesting about human psychology.
People buy on impulse.
The sad truth is that people don’t always do what is in their best interest, instead they act on impulsive desires to do what seems to be the most urgent at that moment in time.
Ok, so if people buy off impulsive behaviour then how can you sell them something that offers not short term gratification but instead offers long term benefits. How can you offer them something that will be in their best interest to buy, but does seem as sexy or appealing to them, right now.
This is the art of sales. Where marketing is finding potential buyers, sales is the process of initiating the actual transaction between the business and customer (or client). Ok, so you want sell your PV technology to a group of house owners. You know that the product will benefit them by saving them money on their power-bill and you know that it is in their own best interest to purchase your product. But how do sell it to them?
You need to understand… GUFI.
In this post you are going to learn about the psychology of what drives purchasing behaviour and how you can use four factors of impulse to increase your sales significantly!
Four Factors of Impulse
There are four factors of impulse that drive customers to purchase something. These are greed, urgency, fear of loss, and indifference. Which you can memorise as the acronym: GUFI (Goofy). It is important in sales to have an understanding of these four factors and how you can address these in your sales pitch for your product or service. Let’s break down the four factors…
This is the Jones effect, which is when a product or service becomes a status symbol or a way of gaining external validation. The Jones next door just bought a new car, now all of the surrounding neighbours are jealous and envious of the jones so you might expect them to now want to purchase a new vehicle themselves.
In modern marketing many online and offline sales pages have social proof as part of their sales pitch. This might be showing a number of popular news and media services that the company has featured in, or it maybe purely social media proof like tweets, comments and followers. The trick to using greed in your pitch is to express that everyone else is buying your product or that by buying your product the status of the prospect will increase.
Why now? You must express in your pitch that now is the time to buy. This could be because external factors like government policy changes or manufactured internally like deliberately having limited stock or have a limited time offer. You must encourage buyers to purchase now as leads go cold. Meaning that the longer you take to make the transaction the less likely it becomes to inevitably occurring. Anyone who has experience in sales will be able to understand this. But even if you don’t, it helps to understand that we currently live in a world of never ending distractions. We are constantly overwhelmed with seemly urgent messages of influence. Even if we try and avoid these we can’t avoid the distracting effect they have on us. In sales you must have a condition or reason why it makes sense for the prospect to make the purchase now. As waiting only decreases that likelihood of the transaction ever taking place.
Every sale has 5 basic obstacles: no need, no money, no hurry, no desire, no trust. – Zig Ziglar
Fear of Loss (FOL)
Everyone hates to miss out on a valuable opportunity. This is a drive that causes some students to party their way through college with out going to classes, but it is also a factor of impulse. To use this factor in your favour you must structure your deal/offering in a way where people feel they must act now.
You achieve this by expressing a reason why they must by now or create an offer that you present to have your prospect fearful of missing out. A special discount or a one-off bonus. This may seem tacky or overused, but the fact is: it works. Remember that if you have a high quality product or service that you believe offers value to your prospect then using a limited time offer will only increase the likely-hood of a transaction actually occurring. The reason why we often see these offers as tacky or overused is because many companies use these techniques to sell stuff that has little value to the consumer. If you genuinely believe that your technology will benefit the customer/client than it is up to you to make sure the transaction occurs.
Otherwise you are robbing them of the opportunity to benefit from your product.
Indifference is also known as freedom from outcome. The truth is that no one likes a pushy salesman. No one likes feel as though they were forced, pressured or persuaded against their will to purchase something. But conversely as a salesman it is your job to ensure that potential customers are given the opportunity to benefit from your product. So you must push to get it sold but not too hard that you push the customer away. How are you suppose to achieve that paradox??
So to achieve this you must go two steps forward in your pitch and then go one step back. The purpose of this is to draw in potential clients and give them the opportunity to choose your offering for themselves and because it meets their needs and isn’t just some way to meet your own. You want to come accross as though you couldn’t care whether they want to purchase or not. The ideal is when you give them the best opportunity to purchase by giving an exellent pitch but then you appear largely indifferent to the outcome of the deal or sale. You want to give the prospect the impression that if they don’t purchase you are not worried because some else will. Back to the Jones theory you want the prospect to think that if they don’t buy it, then their neighbours will and then they would have missed out on the potential increase in their own status.
Why is this relevant to Clean-tech businesses?
Having this understanding of basic human psychology is hugely beneficial when attempting to have any influence. Whether you wish to sell a consumer product or provide a business to business service the same factors of impulse are at play when determining whether someone will actually purchase, or whether you will simply entertain them with your pitch. I trust that your intention is to create value for your customers it is your responsibility to make sure the sale gets made.
Clean-tech products and services are often those that fall under the beneficial but not urgent category for most consumers. I mean almost all people would like to save energy and reduce their power bills, and most are aware that energy efficient bulbs exist.
Then why do you think it is that most homes still use incandescent light bulbs?
Do you think it has something to do with purchase behaviour and impulse?
Let me know your thoughts in the comments.