Five Ways to Sell in a Bad Economy

Some of my more popular posts over time have been those dealing with selling to two different customer groups: spendthrifts, who spend money freely, and tightwads, who don’t part with their money easily. (See Five Keys to Selling to Spendthrifts, Tightwads, Spendthrifts, and Everyone Else and Five Keys to Selling to Tightwads).

It’s safe to say that for the last few years, it was far more productive for marketers to target spendthrifts. In our overheated consumer economy, spendthrifts were a much more lucrative target than tightwads who had to be convinced to part with their cash. Now, though, we are all thinking like tightwads - even those who are still well-employed may harbor nagging doubts about their financial future. In this environment, it’s worth re-looking at some neuromarketing tips to succeed in selling to tightwads:

Minimize Buying Pain

Tightwads are characterized by an above normal sensitivity to buying pain. Research has characterized the pain of buying as being related to, among other things, the perceived fairness of the price and the immediate cash impact.

1. Make the price a bargain. Tightwads don’t like high prices, or prices that appear to be high for what they are buying. Sale prices may be more potent tools with this group. In a direct selling situation where the offer can be tailored to the individual, a price discount may help seal the deal. In most selling situations, though, discounting may not be a desirable option, or even a possibility. In these cases, it is possible that restating the price in different terms might help. An annual membership costing $120 might be described as “only $10 per month” or “only 33 cents per day.” In every case, you are trying to show the tightwad buyer how fair the price is.

2. Avoid repeated pain points. In Painful Sushi and Other Pricing Blunders, I talked about how per-item pricing (as in a sushi restaurant) creates a more painful buying situation than a one time, all-inclusive price (as in a seafood buffet). Since tightwads are more sensitive to paying pain, avoid drip-drip-drip pricing structures that punish the buyer every time he does something. Obviously, not all selling situations allow this - Wal-Mart can’t adopt “per cart” or “all you can buy” pricing. But many products and services, including internet service, cell phone service plans, health club memberships, physical products with options, etc., are possibilities for including a la carte items in a package price.

3. Create product bundles. This is closely related to the previous point. One effect of package pricing is to disguise individual pain points, as has been noted by neuroeconomics expert George Loewenstein. One example he cites is the bundling of car accessories, like leather seats, power features, and so on into a single “luxury package.” This avoids the multiple pain points of selecting separately priced items, and also disguises the individual prices. If the packaged items were sold individually, the consumer would have to make a specific decision on whether leather seats were worth an extra $1,000, a power moonroof $900 more, and so on. Even though the package may cost as much as, or even more than, the individual components priced separately, there’s less buying pain involved.

One good thing: if you can reduce the buying pain associated with your offer, you’ll almost certainly do better with the vast majority of your potential customers. All but the most extreme spendthrifts do feel some buying pain, and a less painful offer will help with more than tightwad customers.

Other Tightwad Techniques

4. Appeal to important needs. Tightwads are less likely to be seduced by the sex appeal of a product than other types of buyers. One of the experiments conducted by the CMU researchers was to present an offer of a $100 massage couched either in utilitarian terms (relief of back pain) vs. hedonic terms (a pleasurable experience). While tightwads were 26% less likely to buy the hedonic massage than the spendthrifts, they lagged by only 9% for the utilitarian massage. Most products combine a variety of characteristics, and the utilitarian ones may be most important to emphasize when selling to tightwads.

5. Watch Your Language! One rather startling finding in the CMU research was that changing the description of an overnight shipping charge on a free DVD offer from a “$5 fee” to a “small $5 fee” increased the response rate among tightwads by 20%! This is hardly inventive copywriting and didn’t involve any fancy neuromarketing, but the mere reminder that $5 was a small amount of money had an important effect on tightwads.

Google Serves Ads Alongside Hosted News

Google has announced that, beginning this week, articles hosted on Google News will be fortified by advertising.

"[When] you click on a Hosted News article, in addition to photographs, maps, and related stories, you'll also see contextually relevant ads underneath the main story text," Google explained.

The newly-availed ad space is part of an ongoing push to squeeze more profit out of its existing high-traffic sites. Earlier this month Google began testing expandable ads for AdSense and AdWords; late last year, it began pushing ads on Google News and in YouTube search results.

On Search Engine Land, Sandra Baron of the Media Law Resource Center suggested Google may face legal liabilities associated with advertising on hosted articles within Google News.

"A significant issue for content providers is whether or not what Google provides becomes a substitute for going to the actual content providers site. When that tension becomes too great, people seek legal solutions to it," she said.

It has not been revealed whether publishers will receive profits associated with the ads.

Last week Google announced plans to begin experimenting with behavioral advertising. AdSense advertisers were asked to update their own privacy policies in compliance.

Taking Advantage of the Trends

The major marketers who set the trends will help consumers adopt new media consumption methods. And they'll pave the way for small business owners to follow suit without the risk or heavy financial outlay.

Here are four ways to increase sales and your advertising ROI by capitalizing on the hottest trends.

1. Engage the customer. The move toward alternative advertising versus some of the more traditional methods coincides with the emergence of technologies that enable a one-on-one dialogue with customers. For example, follow the trend of social media by posting your products on sites that encourage customer or peer reviews. Social media add an element of impartiality and are increasingly looked to as reliable sources of information.

2. Integrate your off-line and online campaigns. Look for ways to use off-line media to drive traffic to a website with specialized landing pages that tell a deeper story. Use print and TV ads to start the customer education process and direct potential buyers online to learn more and take the next steps in the purchase process. And direct an e-mail campaign to your current customer database to offset the cost of direct mail. Simply alternate e-mail and postal mail for a cost-effective one-two punch.

3. Move some off-line dollars online. Online advertising now offers a strong alternative to some traditional media, such as print yellow pages. Consider moving some of your traditional directory advertising dollars into online directories and search engines. The vast majority of Americans research their products online before making purchases, so a paid search campaign is an ideal way to make sure you turn up at the top of search results.

4. Follow your customer. Alternative out-of-home advertising opportunities let you place your message wherever your customers go. You can put your name and company logo on the umbrellas used by urban street vendors, or name hiking trails in wilderness areas. The key to using these new opportunities effectively is to place your message where it will appear in the proper context and reach your potential customers when they are in the right frame of mind.

The new year comes full of high-return marketing opportunities. By closely watching the hottest trends, you can make smart choices that let you step ahead of your slower-moving competitors.

Kim T. Gordon is the "Marketing" coach at Entrepreneur.com and a multifaceted marketing expert, speaker, author and media spokesperson. Over the past 26 years, she's helped millions of small-business owners increase their success through her company,National Marketing Federation Inc. Her latest book ,Maximum Marketing, Minimum Dollars, is now available.

The Hottest Marketing Trends

Marketers nationwide are setting their plans in motion. Big-name brands will embrace new technologies and adjust their budgets in some surprising ways. And as an entrepreneur, you can use some of these tactics to reach your own audience in the coming year.

You can expect major marketing trends to include:.

A shift from traditional to "alternative" media
Advertising in newspapers and magazines, and on radio and TV will continue to be marketing staples, but spending in new media will show the biggest growth as advertisers move money into online, mobile and alternative out-of-home advertising. Many marketers are finding alternative media the best way to reach audiences effectively and to yield a measurable ROI. A communications industry forecast published by Veronis Suhler Stevenson predicts alternative advertising spending will increase more than 23 percent from 2006 to 2011, while traditional advertising will have a compound annual growth rate of just over 1 percent.

A growth spurt for interactive marketing
Interactive marketing spending will more than triple over the next five years, reaching $61 billion by 2012, according to Forrester Research. To put this into context, interactive marketing, which currently accounts for just 8 percent of all ad spending, will increase to 18 percent of marketers' total advertising budgets in five years.

Interactive encompasses new marketing channels such as e-mail and search marketing, online video ads and social media. Mobile marketing, also a form of interactive media, is getting hotter as consumers become increasingly comfortable using personal computing handsets. Other emerging channels, including game marketing, podcasts and RSS feeds, will claim increasingly larger shares of marketers' budgets.

More off-line support for online campaigns
Here's where the value of advertising synergy hits home. In 2008 and beyond, the trend toward using off-line media to drive customers to the web will continue and pick up speed. Traditional media are increasingly relied on to support new interactive campaigns. Display advertising, in particular, will be the workhorse that Forrester Research predicts will reach $14 billion by 2012.

TV is another traditional advertising medium that will increasingly be used to pique consumer interest and point prospects to a website where they can find more in-depth information. Once there, entertaining online video ads may be used to tell a longer, more involved story. Consumer adoption of online video is growing, and most age groups are expected to step up its use in 2008.

High-Impact, Low-Budget Ideas for Marketing in a Down Economy

When the going gets tough, the tough get... cheap. Today, a good marketing idea has to be as inexpensive as it is clever. In part 1 of a two-part series, I offer five inexpensive suggestions that can lead to productive results.

1. Use all of the buffalo

The buffalo was more than a source of meat. Hides became clothing and shelter; bones became tools; sinews became bow strings.

Think like a Plains Indian and get the most use out of every marketing effort possible. One case study, for example, can serve as
* Spider-food on your website that boosts SEO and provides meaningful content
* A direct mail insert in lieu of the traditional product brochure
* A tradeshow handout to jump start conversations
* A leave-behind for sales calls
Bonus

Exploit the public relations potential of a big project such as a whitepaper or e-book. If the content is genuinely valuable (not merely promotional swill), you may be able to pick up good press on the cheap.

One of my clients got a half-page article in the leading trade magazine for its industry—and scored a seat at the executive leadership table in the industry's dominant professional association as a result of the great press.

Target appropriate editors/bloggers/reporters with your content and include a quick note explaining its relevance to their audiences.

2. Choose your social-media weapons carefully

What's that background hum? Oh, it's the swarm of expert wannabes chattering endlessly about Web 2.0, social media, the death of print, etc. No matter what the technology or medium—whether blogs or mobile devices, Facebook or Twitter—the message is always the same: You gotta be there—or you're a dumb-dumb... or worse, a dodo.

Look, no doubt some of these may have real value for your business. But the hard truth is that you can't do ALL of them well. Nor should you. Concentrate your resources on the ones that

* Are likely to be used or welcomed by your target markets
* You can excel in
* You can sustain on a regular basis
* Don't impose unrealistic burdens on your resources or budgets

Bonus:
A client of mine leveraged social media to help a branch of the armed services meet its recruiting targets. But instead of chasing the latest social media fads, they focused their efforts by doing two key things: listening to the online conversations already in progress and creating open content that their target audiences could freely share. Result? They've hit their recruiting numbers every month.

3. Go organic

Place greater emphasis on your organic SEO rather than simply dumping money into Google AdWords. It's not only cheaper, it can be more productive; I've read various analyses on the Web suggesting that natural listings attract 60% or 70% of clicks as opposed to 40% or 30% for paid listings.

Successful organic SEO requires

* Aggressive identification of keywords that should be optimized for each significant page on your site
* Development of deep content that feeds search engine spiders and attracts incoming links
* Constant monitoring of your site statistics to track trends and progress

Bonus

Don't neglect your titles and meta descriptions. "Titles" are the words that appear at the top of the visitor's Web browser. Search engine spiders take titles seriously, so be sure yours include keywords. The "meta description" in your HTML is what the search engines use to describe your site when it appears as a response to search query; write yours to appeal to potential customers.

4. Play to your strengths

Many years ago, as I was starting my copywriting career, I met a businesswoman who shared what she described as the best advice she ever got at a motivational seminar: Don't try to improve your weaknesses; just concentrate on developing your strengths.

I think that's wise. For us, it means focusing our business operations on our most productive, profitable areas and focusing our marketing efforts on those strategies or tactics at which we most excel.

It's not a matter of what works, but what works for you. If, for example, cold-calling simply isn't effective, drop it. If you're good at networking, plan on investing more of your time and money on networking opportunities this year.

Bonus:
So many of my clients get hung up on this so-called "elevator speech" thing—that 30-second pitchoid that each of us is supposed to have at the ready. The problem with these things is that they sound every bit as contrived and unnatural as they really are. So forget about them. Instead, think about questions, things you can ask new prospects that can jump-start conversations and lead to a natural introduction of your products or services.

5. Profile your best customers

Consider this reverse-engineering for marketing. Think of your best customers. What do they have in common? Is it an industry or role? A similar problem or challenge? A quality of temperament, habit, or attitude? The answers form a profile of the kind of prospects you should pursue.

Then think about how you attracted your top customers. Did they come to your Web site first? Or respond to a direct mail campaign? Or meet you at a conference? Again, whatever worked, do more of. And consider trimming back the rest.

Bonus:
Be prepared for surprises. You may have started your business with the intent of serving one kind of customer with one kind of need, but in retrospect you may find that your best business comes from an entirely different kind of client with a different need.

I work with a company, for example, that started out in the business of providing inexpensive security for PDF documents. But, over time, it found that the real interest lay in offering PDF analytics—and they've shifted their efforts accordingly.