The three point sale

Sunday, August 14, 2005

Following up from the earlier post, to make a high value sale, you need three steps:

1. Positive spin. Make the prospect aware of the brand and all its wondrous abilities. Make the prospect imagine their improved lifestyle when associated with your brand. Traditional marketing does this. The scenarios you see depicted in a typical advertisement represent the lifestyles of only about 10% of prospects (think car advertising: Ford Ikon’s Josh campaign, or Tata Safari outdoor). The rest are expected to desire such a lifestyle, and to associate your brand with fulfilment of that desire. Spare no effort at infiltrating the prospect’s mind.

2. Critical review. Unleash opinionated customers to disparage the brand as well as they can. Let their frustrations (and small delights) show. Review sites like Epinions and MouthShut gleefully facilitate this. Traditional marketing wishes they would go away, but traditional marketing no longer has a hold over them, like they did (and do) with advertising campaigns in print and television.

3. Bring the brand down to reality. Let the prospect offset hype with criticism to decide whether the brand brings value to them. This happens in the prospect’s head, and a wise marketeer would do well to not tamper here. The foolish will attempt to make soothing sounds about how the brand is so great despite the obvious imperfections, thereby annoying a prospect who wants to make an independent decision. The wise will instead continue with the barrage in Step 1, using an impersonal, broadcasted push to turn opinion in the brand’s favour.

The key here is that a prospect who discovers negatives after closing the sale is likely to be very upset and influential of other prospects, than if the prospect decided to close the sale despite being aware of said negatives. This is particularly relevant when prospects have a voice (ie, the web). Smart marketeers will understand the importance of Step 2, and learn to use it to their advantage instead of wishing it away.

Comments? This isn't quite there yet, but getting clearer.

Allow me a moment to gloat here. My first blog, Lunateks.com, went live in September 1999. Epinions had been around for a few months, and MouthShut wouldn’t come to exist until the following year. Since the term ‘blog’ was unheard of in those days, we simply passed for a Slashdot-clone site. We were a technology user forum, and one of the recurring themes was users bitching about being cheated by vendors over product specifications. I thought it was interesting, but was far too naive to realise the significance. Sadly, the company didn’t either, for they chose to ignore the site in favour of an international media alliance (aka dotbomb), and Lunateks died of negligence halfway through 2000.

Anonymous — Aug 14, 2005 2:45:34 PM — # ↩

have a look at this blog post http://headrush.typepad.com/creating_passionate_users/2005/08/physics_of_pass.html It says that any good product will have a bunch of haters and lovers. If something does not have bot of them, it is mediocre.

Cheers
Raj Shekhar
- Kiran Jonnalagadda — Aug 15, 2005 11:09:52 AM — # ↩
  
  Thanks, dude. That is one heck of a blog. Lost half the morning to it.
themadman — Aug 14, 2005 7:55:41 PM — # ↩

MouthShut.com is teh suck when it comes to usability, not to mention a spam-o-matic. :)
- Anonymous — Aug 15, 2005 1:45:20 AM — # ↩
  
  "2. Critical review. Unleash opinionated customers to disparage the brand as well as they can."
shortindiangirl — Aug 14, 2005 10:30:35 PM — # ↩

I think it applies to services too. See www.angieslist.com

Thank you for this.
- Kiran Jonnalagadda — Aug 15, 2005 10:07:02 AM — # ↩
  
  Applies to job offers too, which is what I'm testing this with.
acmurthy — Aug 15, 2005 1:19:28 AM — # ↩

I guess a high-value product would help too... just in case it might be actually useful to the prospect.
- Kiran Jonnalagadda — Aug 15, 2005 11:23:27 AM — # ↩
  
  Yes, that is a base assumption, but you have to accept that 'value' is a nebulous concept. For example, Maruti has for a while now had the country's widest service system. It was such that if your car broke down anywhere, pretty much any local mechanic could fix it. For a long time, my parents used this to argue that they would buy nothing other than a Maruti. If that fancy foreign brand car breaks down 100km from the nearest city, who's going to fix it?
  
  Reality is, barring one or two trips a year, the car is unlikely to ever leave the city. But who's going to tell them that? (They finally settled on a Ford Ikon last week, on my brother's convincing.)
  
  Regardless of what actual value the product has to the prospect, it is the perceived value that makes the sale.
  - themadman — Aug 15, 2005 11:39:46 AM — # ↩
    
    Regardless of what actual value the product has to the prospect, it is the perceived value that makes the sale.
    
    I wish more people would realise that perception in marketing is more important than reality.
  - acmurthy — Aug 16, 2005 12:10:14 AM — # ↩
    
    >Regardless of what actual value the product has to the prospect, it is the perceived value that makes the sale.
    
    Oh come on dude... you can make the sale, maybe even a couple more, but your whole argument that 'value' is a nebulous concept and that it can shoved down the ignorant prospect's throat is being utterly obnoxious and arrogant.
    
    You can market the product to be percieved as elixir, but you will be found out quickly enough and the prospect will not be exactly thrilled. For e.g. I think a fair number of investors who percieved that Mr. Henry Blodget knew what he was saying don't want to hear his name again after ...
    - Kiran Jonnalagadda — Aug 16, 2005 7:51:09 AM — # ↩
      
      No, what you concluded is the point I'm making. Happy customers are the ones who bought it knowing it not an elixir, but still had a value that made sense to them. That the value itself is not well defined is a different argument.
      - acmurthy — Aug 16, 2005 10:15:51 AM — # ↩
        
        Hmm... doesn't seem so to me, apologies.
        
        >Regardless of what actual value the product has to the prospect, it is the perceived value that makes the sale.
        
        That is what I feel is just a short-term view to make a quick-buck and an insult to the prospect's intelligence.
        
        Kiran Jonnalagadda — Aug 16, 2005 11:12:31 AM — # ↩
        
        Beg to differ. We have two parties here: the seller and the buyer.
        
        The seller must make sales to remain in business. This is required regardless of the quality of the product, though it does help to have good quality. Sales is #1 priority. There is no question of putting off a sale because you feel the product could be better. Product improvement typically happens only when sales slack off (though ideally not), but sales never becomes lower priority. Apple in recent years is a classic example of doing this right. All their new products are timed to coincide with low stocks of their older products. They also kill off their best-selling products regularly (the non-colour screen iPod just died), and that too is a good strategy, but divergent from this discussion.
        
        The buyer, OTOH, is looking for value in a product. Value is a nebulous concept because it is comprised of need and want (aka desire). Needs are more or less definite. Desires are limitless, and will never be satisfied. Buyers claim they're buying to satisfy a need, but they're secretly after their desires. This is true of any buyer. When you have a product that satisfies a need but not a desire, it becomes a commodity like toothpaste or polythene bags. This is why you'll see toothpaste brands like Colgate (CP) and Pepsodent (HLL) fighting tooth and nail to reintroduce the desire element via their advertising. (Does P&G sell toothpaste in India? I can't recall their brand.) This is why you see Gillette desperate to tell you that a 3-blade razor (Mach 3) is better than the 2-blade razor (Sensor) they were promoting heavily only a few years ago.
        
        Regardless of whether three blades shave smoother than two, it's the desire that makes the sale. A seller has to be stupid to ignore the desire element when making a pitch, for they risk losing the sale to a competitor. I must emphasise here that it is stupid for the seller to keep the buyer's needs in mind when making a sale. You always sell to desire, not to need. Mantras like "customer first" are misleading: their true purpose is to figure out how to make (recurring) sales to the buyer.
        
        Now this approach to sales may seem short sighted and unethical, but I disagree here. The company's business is to make money, which is done via sales, and their only responsibility is figuring out how to keep making sales. Anything else is the responsibility of external entities.
        
        What I propose in Step 2 is one such external entity. If a buyer wants assurance that the product will continue to make them happy even after the sale (note: happiness is a desire, not a need), they should figure out how to talk to other buyers. Notice there is a business opportunity in facilitating such a communication, which is what Epinions and MouthShut do.
        
        A smart seller will realise the value of such a discussion platform: happy buyers will recommend the product to other happy buyers, who will also buy. This is incentive to improve the product, which is also good for the buyer.
        
        (This is side-stepping my argument that it is good to have negative reviews of your product being published, but I hope you get what I'm driving at.)
        
        ashwinne — Aug 17, 2005 2:46:55 PM — # ↩
        
        Informative comment and post. Thanks!
        
        rhapsodust — Aug 21, 2005 9:08:19 AM — # ↩
        
        Nay! The issues here are 1)of perceived value vs actual value, and 2)needs and desires. Perceived value is good enough for the first sale, but actual value is what will drive repeat sales. Actual value also drives word of mouth publicity, and unless it's a slam bang one off project which requires a one time sale to make a one time killing, true value is easily the most important criterion, possibly even more so than the value proposition (Value at what price?). The needs vs desires argument also does not hold for a majority of the products in a majority of the markets. It's closely tied to value- selling the desire is fine, but the need has to be satisfied first- although this is more debatable because of the high dependence on the nature of product being sold.
        
        Kiran Jonnalagadda — Aug 21, 2005 9:39:47 AM — # ↩
        
        Thank you, but there is still the question: what determines actual value? Surely even the buyer's sense of actual value is subject to perception? It's just that one sort of perception evaporates after the sale, while the other persists.
        
        It's somewhat like smoking. Through most of the 20th century, few understood the harmful effects. The smoker's sense of actual value therefore was that it made you feel good without having any harmful side effects. This however, turned out to be the perceived actual value, not the actual actual value.
        
        I'm willing to bet there's no such thing as actual value. It's all a matter of the nature and duration of the perception. Some perceptions are so hard to counter that you treat them as actual.
        
        rhapsodust — Aug 21, 2005 10:39:55 AM — # ↩
        
        Most of what you've argued makes sense, I just don't think you're right on this value point, honestly. It's all very well speaking of new age marketing and all that, but, if anything the actual value is even more crucial in this era than in any other. Sway one inch from what you tell the customer you will give him, and he'll will dump your product at the blink of an eye. We are moving towards (already at?) an age dominated by information where the distinction between perceived value and actual value is fading, and, as you've said, sites like mouthshut et al give you the complete lowdown. All I'm saying is that actual value is critical- and, a majority of the times, the customer is more than capable of perceiving the value of the product correctly.
        
        ALso, if you look at it from a company/reputation angle, consider the ramifications of selling perceived value to the consumer, who then finds out that it is not what you've made it out to be (or, alternately, what he has perceived it to be after your selling). Long run, it does far more harm than good.
Anonymous — Oct 27, 2005 1:15:09 AM — # ↩

hi there
Loved your blog- enjoyed reading it.
MouthShut is making a humble attempt to empower consumers.

Lunateks;_) MouthShut thrives on dedicated members such as you!
You are the roots of MouthShut. Thanks again.

Sincerely,

Faisal Farooqui
CEO
MouthShut.com