The truth is not all performance predictors are ethical, because not all marketers are ethical.
Like any form of marketing, performance predictors can be manipulated and falsely claimed for the self-serving benefit of the organisation. Whilst I believe performance predictors are one of, if not the most, ethical forms of marketing currently employed, it is sure to be exploited by the dishonest minority.
For performance predictors to be ethical the 'envisioned future' created and subsequently presented to the prospective customer must be representative of common reality; as opposed to an abstract reality based on a perfect one-in-a-million outcome.
For example, a product demonstration proving the effectiveness of a carpet cleaning foam (typically shown on day time infomercials) are ethical where the carpet is standard household carpet and the red wine is, well, red wine. However, if the marketer 'enhanced' the demonstration with synthetic carpet and coloured water, obviously the ethics involved are questionable.
Friday, February 29, 2008
Thursday, February 28, 2008
Developing performance predictors by minimising risks
Grab a blank piece of paper, draw a line down the middle and head the two columns – Potential Benefits and Perceived Risks. Put yourself into your customer’s shoes and fill out the columns.
Next, focus on the perceived risks column, and brainstorm performance predictors that would reduce each of the perceived pre-purchase risks.
To gain maximum effectiveness, aim to generate at least 10 potential performance predictors for each one of the risks. You may be surprised how often it is the last 2 or 3 ideas which are the best.
Next, focus on the perceived risks column, and brainstorm performance predictors that would reduce each of the perceived pre-purchase risks.
To gain maximum effectiveness, aim to generate at least 10 potential performance predictors for each one of the risks. You may be surprised how often it is the last 2 or 3 ideas which are the best.
Fear of the Unknown
As humans, we allow many fears to drive negative behaviours in ourselves, such as inaction, anger, avoidance and anxiety.
For marketers, removing fear of the unknown for prospective customers is critical to ensuring conversion or commitment results.
Performance predictors allow prospective customers to fast-forward themselves into the future to 'experience' the product or service and use the wisdom gained to make an astute purchase decision in the present ... and hence, reduce (or in many cases eliminated) fear of the unknown for prospective customers.
For marketers, removing fear of the unknown for prospective customers is critical to ensuring conversion or commitment results.
Performance predictors allow prospective customers to fast-forward themselves into the future to 'experience' the product or service and use the wisdom gained to make an astute purchase decision in the present ... and hence, reduce (or in many cases eliminated) fear of the unknown for prospective customers.
Wednesday, February 27, 2008
Are performance predictors, points of differentiation?
Consumers do not typically assess an offering in isolation. Instead, they consider an offering in relation to alternatives based on their own predetermined minimum requirements.
Points of parity* are the minimum expectations for a given product or service to be considered within a specific category or industry. Prospective customers require that these points of parity exist in a product or service offering before serious consideration is granted, and it is deemed a legitimate contester for the consumer’s share of wallet.
Failure to ensure your product or service includes your target markets' specific points of parity, is likely to result in your offering not being added to their “short-list” of potential providers.
As an example, you may be planning to introduce a new mobile telephone that includes video conferencing, allowing both callers to see one and another via their mobiles whilst carrying on a conversation (importantly, this is an example of a point of differentiation). Obviously this innovative feature would appeal to a large section of mobile phone users, and result in significant demand.
But, as you can see, this one feature is clearly not enough to ensure widespread consumer take-up. Without critical points of parity such as the ability to send and receive calls, send and receive SMS messages and store contact names and numbers the new product would be unsuccessful.
Importantly however, points of parity alone are not enough. In other words, points of parity are a necessary evil, but are not sufficient for consumers to use as the grounds for a final purchase decision. This is where performance predictors which are also points of differentiation come into the picture.
For example, promoting a client success statistic such as Nicorette's ActiveStop program which claims that smokers are 4 times more likely to quit smoking by using the ActiveStop program than with will power alone^. This success statistic is a point of differentiation for Nicorette (it is also a performance predictor). And if a competitor were to introduce a client success statistic that is perceived to be 'better' by smokers wanting to quit, then Nicorette would need to innovate and improve their results or change their point of differentiation (and performance predictor) to focus on another area.
* The term 'points of parity' is credited to Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002); cited in "Three Questions You Need to Ask About Your Brand," Harvard Business Review, September, 80 (9), 80-89.
^ Source: www.nicorette.com.au [Accessed 28/02/08]
Points of parity* are the minimum expectations for a given product or service to be considered within a specific category or industry. Prospective customers require that these points of parity exist in a product or service offering before serious consideration is granted, and it is deemed a legitimate contester for the consumer’s share of wallet.
Failure to ensure your product or service includes your target markets' specific points of parity, is likely to result in your offering not being added to their “short-list” of potential providers.
As an example, you may be planning to introduce a new mobile telephone that includes video conferencing, allowing both callers to see one and another via their mobiles whilst carrying on a conversation (importantly, this is an example of a point of differentiation). Obviously this innovative feature would appeal to a large section of mobile phone users, and result in significant demand.
But, as you can see, this one feature is clearly not enough to ensure widespread consumer take-up. Without critical points of parity such as the ability to send and receive calls, send and receive SMS messages and store contact names and numbers the new product would be unsuccessful.
Importantly however, points of parity alone are not enough. In other words, points of parity are a necessary evil, but are not sufficient for consumers to use as the grounds for a final purchase decision. This is where performance predictors which are also points of differentiation come into the picture.
For example, promoting a client success statistic such as Nicorette's ActiveStop program which claims that smokers are 4 times more likely to quit smoking by using the ActiveStop program than with will power alone^. This success statistic is a point of differentiation for Nicorette (it is also a performance predictor). And if a competitor were to introduce a client success statistic that is perceived to be 'better' by smokers wanting to quit, then Nicorette would need to innovate and improve their results or change their point of differentiation (and performance predictor) to focus on another area.
* The term 'points of parity' is credited to Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002); cited in "Three Questions You Need to Ask About Your Brand," Harvard Business Review, September, 80 (9), 80-89.
^ Source: www.nicorette.com.au [Accessed 28/02/08]
Tuesday, February 26, 2008
Performance Predictors and Open Source Marketing
Open source marketing is concerned with listening intensely to customers and working with them to develop (and re-develop) the products and services they desire. With open source marketing, gone are the days of creating products, experiences and marketing in isolation of customers, and later releasing it onto them. To explore the concept in more detail, see: http://www.changethis.com/14.OpenSourceMktg.
How does open source marketing apply to performance predictors? Well, I previously mentioned that performance predictors should not viewed as an after thought or add-on to the product development process. And the product development process should not be carried out in isolation of customers. So, when the customers are present, co-creating the products and services, they should also co-create the performance predictors.
The line between where the organisation ends and the customer begins is becoming increasingly blurred. Isn't that great?
How does open source marketing apply to performance predictors? Well, I previously mentioned that performance predictors should not viewed as an after thought or add-on to the product development process. And the product development process should not be carried out in isolation of customers. So, when the customers are present, co-creating the products and services, they should also co-create the performance predictors.
The line between where the organisation ends and the customer begins is becoming increasingly blurred. Isn't that great?
Monday, February 25, 2008
Performance Predictors and One-to-One Marketing
In 1993, more than a decade ago, Don Peppers and Martha Rogers penned one of the greatest marketing books ever written, The One to One Future: Building Relationships One Customer at a Time.
At the time, marketers around the world recognised the potential implications for a one-to-one marketing approach, with the first step being to implement a customer relationship management (CRM) system. There were wide ranging challenges which slowed or stopped the successful adoption of CRMs within many organisations, and, in my opinion, the full benefits of one-to-one marketing were never realised.
One-to-one marketing is not about CRM; although CRM is typically required to manage a one-to-one marketing approach. Take the start-up company, Brewtopia* as an example of one-to-one marketing.
Brewtopia (see http://www.brewtopia.com.au/) allows customers to 'brand' their own beer, wine and water. So, you could have your name on your own bottles of beer! This is one-to-one.
How do you merge the concepts of performance predictors and one-to-one marketing? The answer is tailor-making (as opposed to mass offering) your organisation's performance predictors to the requirements of the individual prospective customer.
For example, your organisation could provide a customised guarantee on the part of a product or service which is 'most feared' (i.e. carries the highest perceived risk) to the prospective customer. For one customer this may be lowest price, for another it may be after sales support. Provide a guarantee which is most relevant to the individual customer standing in front of you, rather than generalising based on the entire market.
*The author would like to disclose ownership of Brewtopia shares.
At the time, marketers around the world recognised the potential implications for a one-to-one marketing approach, with the first step being to implement a customer relationship management (CRM) system. There were wide ranging challenges which slowed or stopped the successful adoption of CRMs within many organisations, and, in my opinion, the full benefits of one-to-one marketing were never realised.
One-to-one marketing is not about CRM; although CRM is typically required to manage a one-to-one marketing approach. Take the start-up company, Brewtopia* as an example of one-to-one marketing.
Brewtopia (see http://www.brewtopia.com.au/) allows customers to 'brand' their own beer, wine and water. So, you could have your name on your own bottles of beer! This is one-to-one.
How do you merge the concepts of performance predictors and one-to-one marketing? The answer is tailor-making (as opposed to mass offering) your organisation's performance predictors to the requirements of the individual prospective customer.
For example, your organisation could provide a customised guarantee on the part of a product or service which is 'most feared' (i.e. carries the highest perceived risk) to the prospective customer. For one customer this may be lowest price, for another it may be after sales support. Provide a guarantee which is most relevant to the individual customer standing in front of you, rather than generalising based on the entire market.
*The author would like to disclose ownership of Brewtopia shares.
Sunday, February 24, 2008
Incorporating emotional appeal into performance predictors
Whilst performance predictors are essentially concerned with rational content which appeals to the left side of the brain, they can be incorporated into an emotional message (which have been proven to elicit action).
The current NZ Tourism TVCs are a good example. The scenes presented, of various NZ landscapes, are performance predictors (you can almost feel yourself in the scene!). However, they are presented in an emotional context to encourage action from viewers.
You are also able to 'tail' emotional content with rational performance predictors. For example, the NZ Tourism TVC could finish with, "94% of international visitors to NZ report it is the best destination they have ever visited".
Simply stating the facts and nothing but the facts in a very bland format may not be the best way to promote your performance predictors. Some inspiring content goes a long way to ensuring prospective customers actually receive your performance predictors within the context of a well crafted message.
The current NZ Tourism TVCs are a good example. The scenes presented, of various NZ landscapes, are performance predictors (you can almost feel yourself in the scene!). However, they are presented in an emotional context to encourage action from viewers.
You are also able to 'tail' emotional content with rational performance predictors. For example, the NZ Tourism TVC could finish with, "94% of international visitors to NZ report it is the best destination they have ever visited".
Simply stating the facts and nothing but the facts in a very bland format may not be the best way to promote your performance predictors. Some inspiring content goes a long way to ensuring prospective customers actually receive your performance predictors within the context of a well crafted message.
Thursday, February 21, 2008
Attraction, Conversion or Retention?
Most marketers spend the majority of their time and focus on 'attraction' activities. Flaging prospective customers down and drawing them in.
You can certainly use performance predictors as a magnet to attract prospective customers. For example, Flight Centre's Low Price Promise (previously framed as 'Lowest Airfares Guaranteed') has been employed very successfully as an attraction performance predictor.
Performance predictors can also positively impact conversion. For example, prestigious lawyers operate from offices with high class fit-outs to help 'justify' their fees (which assists to convert prospective clients).
Finally, existing customers can be retained with performance predictors. This one is more difficult to understand. You see, existing customers continue to evaluate and judge an organisation, even when they have become a customer (especially in the case of organisations which charge ongoing fees). For example, updates to numbers of testimonals and client success statistics are duly noted by existing customers, and encourage their ongoing patronage.
You can certainly use performance predictors as a magnet to attract prospective customers. For example, Flight Centre's Low Price Promise (previously framed as 'Lowest Airfares Guaranteed') has been employed very successfully as an attraction performance predictor.
Performance predictors can also positively impact conversion. For example, prestigious lawyers operate from offices with high class fit-outs to help 'justify' their fees (which assists to convert prospective clients).
Finally, existing customers can be retained with performance predictors. This one is more difficult to understand. You see, existing customers continue to evaluate and judge an organisation, even when they have become a customer (especially in the case of organisations which charge ongoing fees). For example, updates to numbers of testimonals and client success statistics are duly noted by existing customers, and encourage their ongoing patronage.
Wednesday, February 20, 2008
Reducing pre-purchase risks
Why are widely known brand names worth so much? Why are referred prospects the easiest to convert? Why do the majority of consumers compare a few suppliers/products before making a final purchase decision? The answer to all these questions is risk.
In most situations we, as human beings, are motivated to avoid risk of all kinds. Have you ever decided against buying a ‘home brand’ product so as not to appear cheap in front of friends? This is social risk at work.
Risk is a barrier to the prospective customer buying. From the customer’s perspective, there is a risk that the actual product or service may not deliver on expectations.
If the perceived risks outweigh the potential benefits, the prospective customer won’t buy. The key to success is minimise the risks by making the potential benefits more real. This can be achieved using performance predictors.
In most situations we, as human beings, are motivated to avoid risk of all kinds. Have you ever decided against buying a ‘home brand’ product so as not to appear cheap in front of friends? This is social risk at work.
Risk is a barrier to the prospective customer buying. From the customer’s perspective, there is a risk that the actual product or service may not deliver on expectations.
If the perceived risks outweigh the potential benefits, the prospective customer won’t buy. The key to success is minimise the risks by making the potential benefits more real. This can be achieved using performance predictors.
Tuesday, February 19, 2008
Generating money in the bank
Do performance predictor create value for an organisation? Or are they simply another marketing cost to add to the budget?
I believe a strategically aligned and carefully considered batch of performance predictors drive revenue. The benefit of additional value creation far outweigh the cost - when implemented successfully.
All major shopping centres require tenants to upgrade the façade and fit-out of their shops every few years. Why? Obviously it makes the shopping centre seem more modern and appealing, but the tenants also gain a benefit … it actually results in an increase in sales that almost without exception, more than covers the costs of the upgrade.
The cost of implementing performance predictors should be considered negative revenue.
I believe a strategically aligned and carefully considered batch of performance predictors drive revenue. The benefit of additional value creation far outweigh the cost - when implemented successfully.
All major shopping centres require tenants to upgrade the façade and fit-out of their shops every few years. Why? Obviously it makes the shopping centre seem more modern and appealing, but the tenants also gain a benefit … it actually results in an increase in sales that almost without exception, more than covers the costs of the upgrade.
The cost of implementing performance predictors should be considered negative revenue.
The best performance predictor ever
Today, I was fortunate to hear a suggestion which I believe to be the best performance predictor I have ever heard of. At Destiny Financial Solutions, the organisation I am a part of, we help inspiring and experience property investors succeed by providing property-focused investment advice.
My boss suggested we video a 'role play' or reenactment of prospective clients going through the process of becoming clients. This video would then be shown at initial interviews with prospective customers to reduce their anxiety around not knowing what lies ahead.
This is pure genius, and the best performance predictor ever.
My boss suggested we video a 'role play' or reenactment of prospective clients going through the process of becoming clients. This video would then be shown at initial interviews with prospective customers to reduce their anxiety around not knowing what lies ahead.
This is pure genius, and the best performance predictor ever.
Monday, February 18, 2008
Performance Predictor Examples
The following are some classic examples of performance predictors:
- The delivery vehicles of a courier company. Do the courier delivery vehicles look as though they have been bought from a scrap heap? Are they dented and scratched? What is the paint job like? Consumers think that a dented and scratched delivery vehicle = a dented and scratched parcel. In the consumer’s mind, great delivery vehicles = great courier company.
- The written plans of a financial planning firm. What is the paper quality like? Are there any spelling mistakes? How professional is the layout? Is the plan comprehensive? In the consumer’s mind, great written plan = great financial planning service.
- The location of an advertising agency. Are they located in a high-profile business location or out the back of Burke? The world famous Madison Avenue, in New York, houses many of the United States most prominent advertising agencies. This location gives prospective customers a predictor as to their calibre and quality of work.
- The actual bottle of a bottle of wine. Is it heavy glass? Is the label appealing? Is it professionally sealed? Has the wine won any awards? Where is the wine sold, top class restaurants or local pubs?
- The foyer of a hotel. Is the lighting adequate? Are the floor coverings worn? Is the front desk granite or chipboard? Another performance predictor would be the ‘star rating’ of the hotel. Five stars = top quality. Photographs of the hotel, on websites and brochures, is another performance predictor.
There are literally hundreds of different performance predictors, many are unique to specific industries or business types. For example, prospective customers of consultants regularly consider qualifications, book authoring, involvement in industry associations and lecturing engagements as relevant performance predictors. However, for a luxury motor vehicle the performance predictors might include grade of leather interior, motoring association ratings and price.
Immersing prospective customers is the 'secret'
While making a cake, your young child sticks their finger into the flour and puts their finger in their mouth. Immediately, they screw up their face and mumble "yuck" (the taste is a surprise as their older sibling had said that cakes tasted great!).
When the cake is finished cooking and has been iced you offer a piece to your flour-tasting-child to be received with, "no way". Your child has experienced the negative impact of jumping in too soon and only being exposed to one ingredient.
The implementation of performance predictors is similar in many ways to this cake tasting experience. The secret to performance predictors is ensuring you have immersed prospective customers in a range of them. Don't try implementing one or two, monitor the results and give up.
Remember, performance predictors allow prospective customers to fast-forward themselves into the future and this isn't achieved with only a couple of them. You need to promote a range of performance predictors that all reinforce one and another, and are aligned to your market position. Prospective customers must be immersed in performance predictors for commitment to be gained.
When the cake is finished cooking and has been iced you offer a piece to your flour-tasting-child to be received with, "no way". Your child has experienced the negative impact of jumping in too soon and only being exposed to one ingredient.
The implementation of performance predictors is similar in many ways to this cake tasting experience. The secret to performance predictors is ensuring you have immersed prospective customers in a range of them. Don't try implementing one or two, monitor the results and give up.
Remember, performance predictors allow prospective customers to fast-forward themselves into the future and this isn't achieved with only a couple of them. You need to promote a range of performance predictors that all reinforce one and another, and are aligned to your market position. Prospective customers must be immersed in performance predictors for commitment to be gained.
'Professionals' using consumer products
A professional or profession endorsing a consumer product is a form of performance predictor. I was reminded of this today when a colleague was recalling the purchase of their family's washing machine. They purchased a Maytag, in large part, because the salesperson said, "This brand is in all the laundromats - they are very durable".
Oral B has created an extremely successful consumer brand largely based on the slogan, The brand more dentists recommend. Prospective customers receive this message as - if dentists recommend it, it must be good (who am I to argue with the recommendations of dentists?).
Oral B has created an extremely successful consumer brand largely based on the slogan, The brand more dentists recommend. Prospective customers receive this message as - if dentists recommend it, it must be good (who am I to argue with the recommendations of dentists?).
Sunday, February 17, 2008
Visual branding as a performance predictor
The problem is that visual branding is perhaps the most common performance predictor in the business world. Poor visual branding means a lot of things to prospects. For example:
- Poor quality products and services
- The business does not have sufficient capital to operate
- Sub-standard attention to detail
What impact is ‘cheap’ visual branding having on the outward quality your business is reflecting?
Thursday, February 14, 2008
First impressions count
Many performance predictors reside in the various first impressions created by an organisation.
Try taking off your ‘owner’ hat for a moment, and try on a ‘client’ one. Look at your business as if you were going to do business as a customer, and were meeting for the first time. What would your first impression be?
Are your premises clean and tidy? Would you be fizzing with enthusiasm and faith in your new financial planner if their office space looked like a garage, with dead cockroaches slowly piling up behind the door?
Are you clean and tidy? What if your personal trainer rocked up to your house looking like the rats had just kicked him out of the gutter and with eyes more bloodshot than a Tequila worm?
How do they pay you? Do you offer a choice of EFT, cheque or cash? Would you pause before signing if the invoice from a courier company was a badly-spelt and barely legible scribble on the back of an envelope?
These may be extremes, and you may be snorting in derision at how far from your organisation these examples are, but hold on and think a bit more. Are you presenting your organisation at its best? Just how far from the examples are you really?
Ensure the window into the future of your organisation provides a snapshot of reality by using performance predictors to make a positive first impression on prospective customers.
Try taking off your ‘owner’ hat for a moment, and try on a ‘client’ one. Look at your business as if you were going to do business as a customer, and were meeting for the first time. What would your first impression be?
Are your premises clean and tidy? Would you be fizzing with enthusiasm and faith in your new financial planner if their office space looked like a garage, with dead cockroaches slowly piling up behind the door?
Are you clean and tidy? What if your personal trainer rocked up to your house looking like the rats had just kicked him out of the gutter and with eyes more bloodshot than a Tequila worm?
How do they pay you? Do you offer a choice of EFT, cheque or cash? Would you pause before signing if the invoice from a courier company was a badly-spelt and barely legible scribble on the back of an envelope?
These may be extremes, and you may be snorting in derision at how far from your organisation these examples are, but hold on and think a bit more. Are you presenting your organisation at its best? Just how far from the examples are you really?
Ensure the window into the future of your organisation provides a snapshot of reality by using performance predictors to make a positive first impression on prospective customers.
Wednesday, February 13, 2008
Bees to the honey pot
When a range of performance predictors are in operation, word of mouth will spread. Prospective customers will be attracted like bees to the honey pot.
A business with effective performance predictors will tend to find that good quality prospects will gravitate toward the business over time. The best source of new business is referrals. Let your existing customers lead you to your new customers using performance predictors as the path.
Make your organisation impossible to resist.
A business with effective performance predictors will tend to find that good quality prospects will gravitate toward the business over time. The best source of new business is referrals. Let your existing customers lead you to your new customers using performance predictors as the path.
Make your organisation impossible to resist.
Tuesday, February 12, 2008
Crash course in Performance Predictors
The first step to implementing a performance predictors’ strategy is to focus your attention on the first P in the marketing mix – PRODUCT (from a product performance perspective). This singular action will reduce the requirement for the development of a marketing façade to ‘hide’ a lack of product substance.
However, great products alone fail in the marketplace everyday. So, what else is needed?
Delivering an exceptional ‘product’ is only the beginning of this new marketing journey upon which I am proposing. Sceptical consumers aren’t simply going to line up in droves because we have focused on delivered an exceptional product (after all, how will they know that we are in fact offering an exceptional product when they don’t know it exists?).
Next, you need to perform – either deliver exceptional service (resulting in high levels of satisfaction) or offering a fantastic product (with zero defaults). This is called “getting the runs on the board”.
Finally, you need to develop and promote performance predictors which highlight the benefits and strengths of your product or service.
However, great products alone fail in the marketplace everyday. So, what else is needed?
Delivering an exceptional ‘product’ is only the beginning of this new marketing journey upon which I am proposing. Sceptical consumers aren’t simply going to line up in droves because we have focused on delivered an exceptional product (after all, how will they know that we are in fact offering an exceptional product when they don’t know it exists?).
Next, you need to perform – either deliver exceptional service (resulting in high levels of satisfaction) or offering a fantastic product (with zero defaults). This is called “getting the runs on the board”.
Finally, you need to develop and promote performance predictors which highlight the benefits and strengths of your product or service.
Monday, February 11, 2008
Why are performance predictors a 'hot' marketing topic?
Consumers are skeptical and sophisticated. They don't want assertion; they want proof. And that is what performance predictors deliver.
Have consumers really become that skeptical and sophisticated? Here's proof: http://www.trendwatching.com/trends/expectationeconomy.htm and more proof: http://www.choice.com.au/pressReleaseHomePage.aspx?id=106143&p=1&catId=100582 and here's some more for good measure: http://www.hergestridge.com/skeptical-consumers-122.
(P.S. Still skeptical about consumers being skeptical? Here's one more for you: http://findarticles.com/p/articles/mi_m0BDW/is_47_39/ai_53457352)
Have consumers really become that skeptical and sophisticated? Here's proof: http://www.trendwatching.com/trends/expectationeconomy.htm and more proof: http://www.choice.com.au/pressReleaseHomePage.aspx?id=106143&p=1&catId=100582 and here's some more for good measure: http://www.hergestridge.com/skeptical-consumers-122.
(P.S. Still skeptical about consumers being skeptical? Here's one more for you: http://findarticles.com/p/articles/mi_m0BDW/is_47_39/ai_53457352)
Sunday, February 10, 2008
Change rooms as performance predictors
Over the weekend, my wife and I had two interesting experiences with change rooms in ladies clothing stores.
The first one involved no change room at all! My wife was interested in trying on a dress, but was astonished to find that the store had no change rooms. Change rooms allow prospective customers to fast-forward themselves into the future to 'experience' the product or service and use the wisdom gained to make an astute purchase decision in the present. Shoppers 'experience' the product by trying it on and trialing how it feels, fits, smells and looks. Clearly the provision of change rooms is an important performance predictor for shoppers.
The second experience involved a change room which doubled as a staff lunch room, and tripled as a storage room. The paint was peeling off the walls, the carpet was dirty and there was stuff everywhere. A negative performance predictor in deed.
The more confidence you can instill, and credibility you can display, the more sales will result. In both 'change room instances' my wife bought less product as a result of the none existent and negative performance predictors, respectively.
The first one involved no change room at all! My wife was interested in trying on a dress, but was astonished to find that the store had no change rooms. Change rooms allow prospective customers to fast-forward themselves into the future to 'experience' the product or service and use the wisdom gained to make an astute purchase decision in the present. Shoppers 'experience' the product by trying it on and trialing how it feels, fits, smells and looks. Clearly the provision of change rooms is an important performance predictor for shoppers.
The second experience involved a change room which doubled as a staff lunch room, and tripled as a storage room. The paint was peeling off the walls, the carpet was dirty and there was stuff everywhere. A negative performance predictor in deed.
The more confidence you can instill, and credibility you can display, the more sales will result. In both 'change room instances' my wife bought less product as a result of the none existent and negative performance predictors, respectively.
Thursday, February 7, 2008
Death by 1000 bee strings
Implementing a company-view strategy of performance predictors is not for those attempting to achieve the highly sort after, but highly allusive, instant gratification.
Prior to implementing performance predictors, you obviously need to perform! And this may take some time. Performance predictors are not some form of clever marketing facade - they are real. And creating substance does not happen over night.
Death by 1000 bee stings...
Do not attempt to wage your entire marketing on one performance predictor, hoping to achieve instant gratification. From the consumer’s perspective, it is the cumulative effect of all the performance predictors, rather than any one in particular, that is likely to gain their commitment to buy. It is a case of death by 1000 bee stings.
Prior to implementing performance predictors, you obviously need to perform! And this may take some time. Performance predictors are not some form of clever marketing facade - they are real. And creating substance does not happen over night.
Death by 1000 bee stings...
Do not attempt to wage your entire marketing on one performance predictor, hoping to achieve instant gratification. From the consumer’s perspective, it is the cumulative effect of all the performance predictors, rather than any one in particular, that is likely to gain their commitment to buy. It is a case of death by 1000 bee stings.
Wednesday, February 6, 2008
Changing brand associations with performance predictors
Performance predictors can be employed to change an unwanted brand association. For example, Hyundai has pursued the ‘budget’ position for many years, however consumers were questioning their product quality.
Hyundai cleverly employed a couple of performance predictors (extended 5 year warranty as standard and 24-hour test drives) to rectify this unwanted brand association.
Such a strategy requires the 'brand managers' to walk a thin line between overcoming the negative brand association and not detracting from the brand position. In the case of Hyundai, you do not want consumers to perceive that Hyundai is moving from 'budget' from to 'quality'.
Hyundai cleverly employed a couple of performance predictors (extended 5 year warranty as standard and 24-hour test drives) to rectify this unwanted brand association.
Such a strategy requires the 'brand managers' to walk a thin line between overcoming the negative brand association and not detracting from the brand position. In the case of Hyundai, you do not want consumers to perceive that Hyundai is moving from 'budget' from to 'quality'.
Tuesday, February 5, 2008
Degree of believability
Performance predictors can be introduced into a lackluster marketing campaign and deliver limited success. There could be numerous reasons, and one common reason is the believability (or lack thereof) of the performance predictors being displayed.
Following are some examples of performance predictors which carry a high degree of believability:
Following are some examples of performance predictors which carry a high degree of believability:
- Independent auditing of client success statistics and internal survey results.
- Unpaid and/or unscripted celebrity endorsements.
- Product demonstrations conducted by the public (i.e. somebody with no link to the organisation).
- Product packaging that shows the actual product inside, rather than a photo of the product.
- Testimonials supported by customer photos and reference details for validation of comments.
- Providing media articles to support any factual performance predictors being stated (e.g. years in operation can be supported by a newspaper article covering the business opening).
- Providing the original source document of a critic review, rather than re-phrasing or quoting the review.
Performance predictors executed effectively will achieve 'effective results'. The reverse is also true.
Monday, February 4, 2008
Using a sports car to sell homes
A colleague was telling about his friend, a moderately successful real estate agent, who told his accountant that he would love to own a Jaguar sports car. The accountant scoffed at the very thought, since he was barely earning enough commissions to sustain the operating costs of his Falcon.
The agent wasn’t deterred, and went to the local Jaguar dealer for a test drive. The astute salesperson there understood the importance of performance predictors, and the agent left the dealership with a signed contract for a new Jag that same day.
The salesperson didn't apply the concept of performance predictors to the Jag sale itself, however understood that the Jag would work as a performance predictor for the agent in his role. Prospective vendors would see the agent as highly successful – and it worked.
His income doubled over the next twelve months. Within moments of seeing the agent pull up, the prospects saw what his success would mean to them - fast sales at the maximum price. After all, who doesn’t want a successful agent selling their home?
The agent wasn’t deterred, and went to the local Jaguar dealer for a test drive. The astute salesperson there understood the importance of performance predictors, and the agent left the dealership with a signed contract for a new Jag that same day.
The salesperson didn't apply the concept of performance predictors to the Jag sale itself, however understood that the Jag would work as a performance predictor for the agent in his role. Prospective vendors would see the agent as highly successful – and it worked.
His income doubled over the next twelve months. Within moments of seeing the agent pull up, the prospects saw what his success would mean to them - fast sales at the maximum price. After all, who doesn’t want a successful agent selling their home?
Sunday, February 3, 2008
Risk minimisation is big business
How much money is spent each year by people protecting themselves against risk? In Australia alone, the figure would be billions of dollars. Think of all the insurance policies, ambulance cover, alarm systems, fire extinguishers, health check-ups, etc.
That is telling marketers an extremely important lesson – consumers hate risk, so much that they are willing to pay billions to minimise any and all perceived risk.
Do you sometimes feel like it’s an uphill battle to convince a prospect to commit? They have the need, they have the money, but they just won’t commit. Why not?
The answer is that you haven’t tipped the potential benefits scale in your favour. You need to employ some performance predictors to do the 'convincing' for you. Talk is cheap.
Every time a consumer considers a purchase, they engage in a cost/benefit analysis in their mind. This will result in a number of outcomes, for example: (a) that’s too expensive, (b) that will make me look fat, (c) it doesn’t include delivery, (d) people will think I’m cheap, (e) I’ll feel a lot safer, etc.
Consumers almost simultaneously weigh up the perceived risks (including functional, psychological, etc.) against the potential benefits prior to making a purchase, or a non-purchase.
For example, a new type of tasty soft drink that cleaned your teeth while you drank it would likely be priced higher than standard soft drinks. The potential benefits include the removal of the need to clean your teeth the conventional way (including the cost saving of not having to buy toothpaste or toothbrushes again), the potential to have cleaner teeth as the soft drink can get into all the gaps between your teeth, the improved social image associated with trying something new, the dentistry savings as a result of cleaner teeth, etc.
Or a horror book that omitted an electric shock and loud frightening sounds at the points of a climax within the story line (using visual sensory technology to assess where the reader is up to) would again fetch a higher price than a traditional paperback. Consumers trade off the potential benefits and perceived risks prior to making a purchase decision; your job is to make sure that the benefits outweigh the risks. Highlight the benefits with performance predictors, not idle claims.
When consumers purchase low cost items, they do not take as long to make a decision as when they are choosing a high ticket item. This is because with low cost items the risks carry less severe consequences. Take the purchase of a packet of lollies, for example.
Perceived Risk:
“People might think I’m greedy"
Potential Benefit:
“Eating lollies gives me extra energy”
Perceived Risk:
“Will my friends think it’s cool to eat this brand of lollies?"
Potential Benefit:
“Eating lollies makes me feel good”
Perceived Risk:
"Will the texture of the lollies feel nice on my tongue?"
Perceived Risk:
"Will the lollies make my breath smell bad?"
Potential Benefit:
“My breath will smell better and therefore people will like me”
Perceived Risk:
That is telling marketers an extremely important lesson – consumers hate risk, so much that they are willing to pay billions to minimise any and all perceived risk.
Do you sometimes feel like it’s an uphill battle to convince a prospect to commit? They have the need, they have the money, but they just won’t commit. Why not?
The answer is that you haven’t tipped the potential benefits scale in your favour. You need to employ some performance predictors to do the 'convincing' for you. Talk is cheap.
Every time a consumer considers a purchase, they engage in a cost/benefit analysis in their mind. This will result in a number of outcomes, for example: (a) that’s too expensive, (b) that will make me look fat, (c) it doesn’t include delivery, (d) people will think I’m cheap, (e) I’ll feel a lot safer, etc.
Consumers almost simultaneously weigh up the perceived risks (including functional, psychological, etc.) against the potential benefits prior to making a purchase, or a non-purchase.
For example, a new type of tasty soft drink that cleaned your teeth while you drank it would likely be priced higher than standard soft drinks. The potential benefits include the removal of the need to clean your teeth the conventional way (including the cost saving of not having to buy toothpaste or toothbrushes again), the potential to have cleaner teeth as the soft drink can get into all the gaps between your teeth, the improved social image associated with trying something new, the dentistry savings as a result of cleaner teeth, etc.
Or a horror book that omitted an electric shock and loud frightening sounds at the points of a climax within the story line (using visual sensory technology to assess where the reader is up to) would again fetch a higher price than a traditional paperback. Consumers trade off the potential benefits and perceived risks prior to making a purchase decision; your job is to make sure that the benefits outweigh the risks. Highlight the benefits with performance predictors, not idle claims.
When consumers purchase low cost items, they do not take as long to make a decision as when they are choosing a high ticket item. This is because with low cost items the risks carry less severe consequences. Take the purchase of a packet of lollies, for example.
Perceived Risk:
“People might think I’m greedy"
Potential Benefit:
“Eating lollies gives me extra energy”
Perceived Risk:
“Will my friends think it’s cool to eat this brand of lollies?"
Potential Benefit:
“Eating lollies makes me feel good”
Perceived Risk:
"Will the texture of the lollies feel nice on my tongue?"
Perceived Risk:
"Will the lollies make my breath smell bad?"
Potential Benefit:
“My breath will smell better and therefore people will like me”
Perceived Risk:
"Will the lollies make me feel sick after eating them?"
Potential Benefit:
“The lollies will satisfy my hunger until dinner”
Perceived Risk:
“Am I wasting my money by buying lollies?”
In the above example, the perceived risks outnumber the potential benefits. But this doesn’t necessarily mean that the consumer wouldn’t buy the lollies. One of the potential benefits might carry substantial importance and tip the scales in favour of buying.
For another example, let's consider someone buying a luxury cruiser:
Perceived Risk:
"How can I be sure the boat will perform on the water?"
Potential Benefit:
“My wife will appreciate me more because I’m trying to get the family together by owning it”
Perceived Risk:
“Will my friends accept me owning an expensive boat?”
Potential Benefit:
"Friends will look up to me because I own a luxury cruiser"
Perceived Risk:
“Can I afford the ongoing costs of owning this boat?”
Potential Benefit:
"I will be able to take customers out on my boat"
Perceived Risk:
“Does the company provide a speedy warranty service so my boat would never be out of action long?”
Potential Benefit:
"I love boating and fishing. This cruiser will be great for both"
Perceived Risk:
“Will it take long to deliver my boat once I order?”
Perceived Risk:
“Will the motor be really noisy and hurt my children’s ears?”
You should always be working on ways to increase the potential benefits and minimise the perceived risks of prospects doing business with you.
If you do not have the luxury of a Big Brand, you need to minimise the perceived risks using performance predictors.
In the example of the luxury cruiser's performance ("How can I be sure the boat will perform on the water?"), you could highlight the German engineered motor, winning of an industry award for the motor's performance, client testimonials mentioning solid performance of motor, offering of an extended 'test drive', independent research comparing the motor's performance with competitors, dollar amount of the R&D budget spent on the motor, offering of an extended warranty and boating critic reviews.
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