Last reviewed 20 April 2020

Even the best products do not sell themselves. How do you persuade your target customer that your product is for them? Obviously, there is a lot to know about marketing your product, but this article introduces the topic with ideas that you can implement easily and quickly.

Know your customer

The key to successful sales is knowing what your customer wants. Often businesses become obsessed by the features of their products that excite them but may not be relevant to the customer. For example, do you use all the applications available on your smart phone, or all the features on an Excel spreadsheet? What is it that is important to the customers or users of these products?

You can find out what your customers think of your products or service by simply asking them, or sending out surveys. If you are a provider of services it is important to ask your largest and most valuable customers what it is that attracts them to your business. You can also identify the market segments that you are successful in.

Segments

The market can be split up into various segments. Knowing the market segments will help you understand your customers and help improve sales. Markets are often broken down into four sections, although there can be cross over between the various segments:

Geographic – customer groups based upon their geographic location;

Demographic – this sorts the market according to the age, education, income, family size, race, gender etc. This is a useful segmentation where the product is dependent upon these demographic factors (for example some products being aimed at the ‘grey’ market or alternatively the youth market). In business to business transactions this is sometimes called ‘firmgraphic’ segmentation where you look at businesses rather than individuals (company size, number of employees, business type etc.);

Behaviour segmentation – This divides markets into the behaviours and decision-making patterns of customers. For example, some customers want to be early adopters of technology, whereas others will want to wait until the technology becomes more established, reliable and cheaper. Another example would be that some segments will want to buy soap rather than body wash, particularly if the soap has ‘special’ properties such as being blended with perfumes or spices; and

Psychographic – this looks at the psychological traits, values, opinions and interests of customers. For example, the fitness requirements, healthy food product demand, outdoor adventures etc.

By reviewing market segments products can be tailored to customers. There are five steps to market segmentation:

  1. Preliminary research – to get to know customers;

  2. Segment the market - what criteria do you want to segment the market by (psychological, demographic, behavioural, geographic);

  3. Design the study;

  4. Analysis – analyse the responses to the study to create the segments; and

  5. Test and repeat.

When targeting market segments, you can take different types of approaches. An undifferentiated marketing campaign will ignore segmentation and aims to supply a single product to all customers. This can often be inefficient and usually the size and sophistication of a market requires some segmentation.

A concentrated marketing approach will aim to produce an ideal product for a single market segment. For example, Rolls Royce aims at the wealthy only, but it still creates efficiencies by using components from the motor group (Rolls Royce being owned by Volkswagen). A differentiated marketing approach will take a product and design its marketing to appeal to different segments. A washing powder manufacturer will sell essentially the same product to different demographics by emphasising or marketing different features of the product.

Once you have determined your segments that you want to sell to, you can then market your products to them. Persuasion marketing is a method that influences people’s attitudes and actions. The rest of this newsletter looks at how you can achieve this.

Reciprocity and creating an obligation

When something is given, the recipient wants to give something in return. This is a basic tool of marketing. There are many examples. For example, discounts can be offered on a first purchase. Customers may also be offered a discount if they sign up online. Free trials of a product can be offered to induce potential customers to sign up and need to cancel their subscription. Whilst this method is used frequently for e-services, the method is very old. For example, a car dealership creates a feeling of obligation in its potential customers by providing an inviting show room, taking the customer for a test drive, and providing sales brochures. Frequently, a car dealership will not post out a brochure; the potential customer needs to visit the dealership, so the dealership can talk to the customer, create a relationship and make the potential customer feel obligated to the dealership or individual car dealer.

The creation of an obligation can be as simple as providing a sample to potential customers that enter the shop. Studies have shown that sales can increase by nearly 50% where shoppers at a chocolate shop are offered a small sample when they enter the store. Similarly, the size of a tip at a restaurant has been shown to increase when a piece of chocolate is provided with the bill. The increase is not marked as it is not unexpected to be provided with the chocolate with the bill. But, the tip increases significantly where two pieces of chocolate were provided as this second piece was unexpected.

Scarcity

When something is scarce it makes potential customers want the product. It is for this reason that when products are for sale in on-line shops (both goods and services such as hotel rooms) there is often a number showing how many items are left in stock, or the number of rooms available. As can be imagined, a customer may well click ‘buy’ to ensure that they do not lose the opportunity to book the room or the item does not sell out. But the idea of scarcity extends further than this. Items offered at a discount will often be provided in limited numbers (such as only four items per customer). Research has shown that where a limit is placed on the number of items that can be purchased sales can nearly double.

The marketing of a product can also emphasise the exclusivity of your product. This is what Lexus does to differentiate their products from the Toyotas that the cars are based on. Similarly, Apple highlights that their products are exceptional despite their function being very similar to PCs. Apple charges a premium for this exclusivity. Rolls Royce used to advertise their vehicles by saying that the at 60 mph the loudest noise in the car was the ticking of the clock to emphasise the vehicle’s quality. It did make the Rolls Royce managing director say that they needed to do something about the clock to make it quieter!

Endorsements

Where a person of authority recommends your product, it will encourage others to purchase. The type of endorsement will depend upon your product. For example, professional firms (lawyers, accountants and architects) may advertise the fact that there are many blue-chip customers in their client base. They may display their customers’ logos (with their permission) on their web site. A fashion business may, however, seek the endorsement of an Instagram influencer to help direct customers to their products.

Endorsement can also come from the shopping population. Where an item is marked as being most popular (for example, on a menu, or in an on-line shop etc.) this increases sales.

The power of the middle

Where more than one type or size of item is offered customers will often move towards the middle item. They do not want to be seen as being mean and purchase the smallest item, but do not want to be seen as being extravagant and purchase the larger item. This can be exploited successfully in marketing. For example, if two types of beer are offered by a brewery, the basic beer and a best beer, the sales of the best beer can be improved markedly by offering a premium beer above the basic and best beer. The premium beer may not cost much more than the best to make, but will be marketed and sold as a premium product for a much higher price. Not many customers will buy the premium beer (but any that do will provide extra profits) but more customers will be drawn from the basic beer to purchase the best beer.

Value propositions

In what may be regarded as a contradictory marketing philosophy, customers can be moved to the larger or more expensive product if they perceive this as providing value. The difference between this marketing method and the previous one is that in the power of the middle, the aim is to get people to buy the middle product and the premium beer is not seen as good value. In this marketing strategy the idea is to provide a much better value product as the most expensive item. This is often seen in burger bars. To ‘upsize’ does not cost the customer much, but a much bigger product (drink, burger and fries) is obtained. Whilst not much extra is paid, the extra that it costs the burger bar is far less than the increase in price. This leads to increased profits for the burger bar. This is sometimes called decoy marketing where the cheaper item is a decoy and the supplier does not really want to provide the decoy item.

Puzzles and word games

If a brand becomes well established and well-known, the use of a word puzzle or an ambiguous advert can increase sales. Perhaps the best-known example of this is the adverts of Carlsberg beer. Their marketing campaign of “Probably the best lager in the world’ is so well known that they can use the word ‘Probably’ in a variety of situations and the customer will be reminded of their beer (Carlsberg will also use their usual colours and font in the advert). Examples of this include a billboard at Northampton railway station saying Probably the best railway station in the world (Carlsberg is brewed in Northampton) and just putting the billboard up saying Probably at football stadiums to get around laws concerning advertising alcohol at sports grounds.

Whilst this works well with established brands, it can also be used to launch a brand. When Camel cigarettes were launched there was a billboard teaser campaign with a series of differing adverts. The earliest adverts said that The Camels were coming. The next advert said thousands of camels were coming to the town. A bit later a billboard would say that there were going to more camels in town than in the whole of Arabia. Finally, on the day of the launch it was revealed that Camels were cigarettes and were now available. At the time this was the most successful campaign launch. Later Camel cigarettes would use an endorsement, which perhaps cannot be used today. It said that Camel was the cigarette preferred by doctors!

Products will not sell themselves. Even if your business is providing the best products in your sector, the products will not sell unless potential customers are told about this. Persuasive marketing can increase sales markedly and make significant differences to the success of a product.