Irrational factors like prestige and familiarity can be a contributing factor to Customer choices

What drives people to choose which product and service to buy?

In many occasion, we thought a customer spending is driven by reason or relevant factors like quality and price, but in reality, there is more to consider - like irrational factors.

Prestige is one of the irrational factors which influence people choices over practical factor such as price. A customer wants value for their money and will seek for a product which will give them some status. An example is the famous American Express credit card, which despite the high charge fees, it's widely used and accepted in many chain stores. When you have an American Express card, you feel a sense of belonging because they have marketed themselves as a club.

The second irrational factor is seen in buying behavior familiarity. People are more likely purchase a product they often see or hear about, just because it comes to mind quicker than the alternatives. So, it's important to showcase your product high above your competitors and advertise your business effectively. The IRS tax office in the States uses the newspaper to tell stories about fraud nationwide in March, just before taxes are due in April. This reinforces the date in the minds of people.

So, to sell the product effectively, you not only need to consider price and quality, but other factors like prestige and familiarity must be taken into account. Failure to do so will yield negative results on your business.

Narrow down the focus of your service to position yourself for success

The success of services will depend on many factors such as creating a particular focus and position. Position refers to how you want people to perceive you - external view; Focus refers to how you see and understand yourself - internal view.

How do you work on both simultaneously?

To determine your focus, firstly narrow down your business to a single area. This means you will concentrate your business resource in a zone. An example is the Scandinavian Airlines, which focused all their resource on attracting business-class passengers. By doing so, they were able to increase the business-class passengers and were able to lower the prices of economy-class by filling these expensive seats.

The next stage is position. Naturally, your position is derived from your focus, and the customer will know you by the demography of the area you concentrate. This is not always the case, as you are not in control of what people say about your company.

In such cases, writing a positioning statement for your business will help guide you position. This statement will reaffirm and clarify your customers about your position. It should include information like, who you are, what you do, your competitors and benefits to offer in comparison.

For instance, Bloomingdale retail outlets created a positioning statement which states that it's an upscale department store aiming for upper-middle-class clients who prefer high-class products. The moment it identifies itself as high-quality clothes and shopping services, they will work hard to find ways to inform their valued customers and always try to overcome their rivals.

Low-cost and middle-market pricing are risky; Higher end pricing is usually safest.

The price of a product is a reliable indicator of quality and value of a service. There are many other factors in marketing than pricing to consider. If that in mind, how do you price your service?

In many cases, logic has it that customers mostly goes for the lowest price, but in reality, this is not the case.

Being a low-cost service provider can be an attractive pricing position, but this will not always win you the deal. It may attract price-conscious customers. However, there is a risk of your competitors lowering their products and eventually lose out. An example was between Sears and Wal-Mart. Sears strived to be low end in the markets for years but was finally defeated by the Wal-Mart expansion. The pricing model of Wal-Mart was too aggressive that Sears could not catch up, and the business suffered.

The low-cost option has its risks, and it gets even riskier when you try to aim to position your service in the middle. Middle-market prices send out a mixed reaction on your service. This means, quality-conscious clients will prefer those on the higher end of the market, while price-conscious customers will go for a cheaper price option. With the middle-market pricing, you will have to compete with both sides of price options.

What will you do if low- and mid-range aren't the solution? Well, then it's recommended to aim price higher than your competitors, as people mostly translate high price with high quality.

To succeed, turn your company and service into a brand

What do you do when suddenly you feel hungry, and you are driving in an unfamiliar place? Like many, you will probably keep driving until you spot a branded service like McDonald's or Burger King, instead of stopping at the first restaurant you see. The reason being, branded services promise quality standard services. Brands act as an insurance against poor quality, and most people are more comfortable selecting known names as they know what to expect.

To be successful, you need to develop your service into a brand. So, how do you achieve this?

Start by developing a brand to distinguish yourself from others. Create a strong, memorable name and eye-catching logo which people can easily recognizable from your competitor's brands. Find a name that's unique and memorable to stand out. After, create logos and visualize your idea to reinforce the brand. Make sure it's relevant to your business industry. For instance, FedEx uses reds and blues colors, similar to the US Postal Service logo, but in their visuals. FedEx used this to be able to associates themselves with a well-known service in the industry.

You need to build a respectful business image and a reputable brand development. Do this by investing in your business integrity to reinforce your reputation in the market. Make sure you spend time and effort in your brand to ensure trust and quality. An example is IBM, which spends years to develop an image that shows quality and reliability, and supported by the phrase, " No one over got fired for choosing IBM." This concept translated that IBM is a trusted brand which people can rely on quality.

To increase your success rate, develop your service into a recognizable and reliable brand.

Discovering helpful answers require asking the good questions

A story can be a work of fiction but can carry a huge message about your brand. We have seen how lawyers use stories to illustrate complex argument in court, and a marketer can use the same concept to develop a positive brand image to customers.

For the story to work its magic, marketers must ensure the content follows certain principles.

The concept in the content of your story should be consistent. Every element of the content must be the same to avoid confusion. Many top restaurants use stunning decor with an elegant atmosphere and inviting particular customer's to create a consistent story. This combination help presents their food as high quality. Not all customer are food experts, so they will use the overall story to judge the quality of the restaurant.

To sell your story successfully, you need to show evidence that it is working. Customer feedbacks and positive publicity with for quality scores from surveys can be used as evidence in this case. A customer rating of 3.96 scores out of 4 total customers could be used as evidence to build a story about the quality of your service. When a customer asks why you regard your company good, then you can present this survey rating.

Last but not least, make sure your story focuses on the demands of the prospects. At the end of the day, prospects buy's something because they need it and not because someone (you) want to sell them something. So, make sure you address the customers demand in your story or else you will not attract the prospect to your company.