Price Insensitivity

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Many of my friends are music fans.

Actually, I don’t know anyone who doesn’t like some kind of music on some level. So let me rephrase that… These guys are hard-core music fans. You know those guys who go to football games in January wearing nothing but paint? These guys like music like those guys like football.

I don’t get it. I don’t even pretend to get it.

The great thing is, I don’t really need to get it. Forget for a moment that these are my friends. Let’s pretend for a moment that they’re prospects I’m trying to sell to.

The best way to sell someone is not to sell them at all. It’s a very tough concept for most new copywriters to fully grasp, since it’s a copywriter’s job to make the sale. But the very best way to get someone to buy from you is to connect with them on a deep level. If you truly connect with them and they get to know, like and trust you, they will make the decision all on their own to buy from you.

The better you know your prospects, the easier it will be to find common ground and connect with them. The more deeply you can connect to what’s truly meaningful to them, the less price sensitive they become.

One of my friends just bought concert tickets for his whole family. The tickets were over $50 each, which he called “reasonable”.

Now I’m not a big music fan. $50 does not sound reasonable to me. How long is a typical concert? 2-3 hours? There’s no way in the world I’d pay $50 per ticket to watch a movie, which doesn’t seem all that different from watching a concert. But to him that price seems reasonable.

That’s price insensitivity.

Image courtesy of MoreSatisfyingPhotos.com

This same friend owns a dozen electric guitars. A dozen. How many guitars can one person actually play? His least expensive guitar cost several hundred dollars. He has some that cost multiple thousands of dollars.

That’s price insensitivity.

He’s not rich. He has a relatively high income, but not an astronomical one. It’s only in the high five figures. His home is worth less than $250,000. He doesn’t drive a luxury car. He doesn’t dress fancy, take exotic vacations, eat at expensive restaurants or send his kids to exclusive private schools. I’m not sure if he even knows where the country club is.

Yet $50 tickets to a concert are “reasonable” and in his world there’s no irony whatsoever in owning a dozen guitars.

That’s price insensitivity.

I should add that this friend is not unique. I am friends with at least a half dozen people who own multiple guitars each. (What is it with music fans and owning guitars?)

Now let’s say that I’m selling something completely non-musical; let’s say BBQ grills. While any one of these friends may be in my universe of potential customers, very likely none of them is my key ideal customer.

Let’s say that for some reason I want to write a promotion specifically targeted to sell to my second and third level prospects (first level being my ideal prospects who are true grilling aficionados; the guys you see outside grilling when there’s two feet of snow on the ground).

At least knowing something about where a prospect’s primary interests lie makes it easier for me to forge a connection based on common interest. Or at least to present my offer in such a way that it plays on his deepest interest.

That’s the gateway to price insensitivity.

That’s marketing nirvana.

The Worst Copywriting Mistake I Ever Made

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Image courtesy of Mark Anderson. Cartoon by Frank Robbins.

My first copywriting project bombed.

Not just bombed, it got literally zero responses. Not one.

I did almost nothing right.

It was only a 1,000 piece mailing and luckily it was for my own business so the only person I hurt was myself. The business died a quick and merciful death. The lessons learned will linger for many years. And that’s exactly as it should be.

I (rightly) had the bright idea that direct mail would be a good way to promote the business. That’s one of the few smart decisions I made among a sea of very bad ones.

This was for an offline start-up and I had no customer list, so I rented a mailing list from a big list broker. I don’t remember now what the list cost me but I want to say it was around $250 for 1,000 names. (Yeah, they saw me coming.)

I paid to get my own bulk mail permit (another $100 or so) and did everything myself. Everything. The list scrubbing, writing the copy, mail piece design, all the formatting, printing, envelope stuffing… the whole works.

It was actually the second time I had gone through the process of getting a bulk mail permit (the first time being for an employer) so I guess now I know more about the process than most. Even more than most people who work in direct mail.

Image courtesy of Mark Anderson. Cartoon by Mel Calman.

After postage and other incidental expenses, I think my total cost for the mailing was something just north of $1,500. In hindsight, I look at that as tuition in the School of Hard Knocks.

The only other thing I can specifically point to and say I did right was that I knew enough to write two different sales letters and do an A/B split test. Of course I did the test all wrong, but the fact that I did a test at all was a small point in my favor.

At the time, I thought I had copywriting skills. I did not.

I had been a subscriber to a number of copywriting newsletters for a while. That gave me enough understanding of the industry to be very, very dangerous (mainly to myself.) But I hadn’t actually taken a single copywriting course, nor had I ever worked as a copywriter. Or even in any form of advertising.

The little bit of knowledge I had was highly generalized. The most useful skill I actually had was a natural aptitude for writing.

Of course on some level I actually knew all of this. Or most of it anyway.

I also knew that typical response to a mail drop was in the range of 1%-2%. I thought that if I could get a 1% response — 10 customers — from my 1,000 piece mailing, at expected revenues of $165 per customer, I’d be on my way.

It didn’t work out that way.

In the 10 or so years since that sobering incident, I actually did study copywriting and a host of other useful business building topics. In hindsight, I can see all the things I did wrong.

It was a cheap education.

Great Customer Service = Great Marketing

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Photo credit: Louise Docker "aussiegall, on Flickr"

I got a phone call from my pharmacy recently. The pharmacist noticed that I had recently added a new medication to my account and was calling to check on how it was working.

I’m nowhere near vain enough to think that she singled me out for special treatment so I have to conclude that this is something my pharmacy does regularly. (I’m not a big medicine taker so I wouldn’t really know.)

At any rate, this kind of follow-up is great customer service. It makes me a more satisfied customer. It also makes me feel better about doing business with my pharmacy.

Taken in that light, great customer service equals great marketing.

The whole point of marketing is either to:

Photo credit: Taki Steve "takacsi75, on Flickr"

a) attract new customers, or

b) convince existing customers to buy more frequently or spend more.

Calling individual customers one at a time may seem both time-consuming and expensive as marketing campaigns go, but it’s highly effective. Especially in a very personal industry like health care.

Just think if your auto mechanic did this. A few days after having your transmission serviced, he called to make sure everything was running fine.

To some degree,  companies like Amazon and Netflix already do this but the more personal touch and the smaller scale seems so much more special. That really ramps up the impact.

I challenge you to see if you can find a way to boost your customer satisfaction and word-of-mouth marketing by providing exceptional customer service.

Do You Make Proper Use of Affiliate Marketing?

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A friend of mine came to me recently for advice. He runs several websites and even gets lots of traffic, but not a lot in terms of monetary returns. He isn’t selling anything on his sites but he does have banner ads and a few other revenue sharing streams of potential income.

screen shot showing a representative sample of the site's content

He asked me to take a look at a couple of his sites. The first one I looked at is a recipe site about ethnic cooking. It gives lots of recipes and cooking tips for local dishes from all over the world.

I like the concept but it took me about 1/10th of a second to recognize two potential opportunities that he isn’t currently taking advantage of.

The first problem is one of positioning. The site targets mainly immigrants, helping them to find recipes to make dishes from their homeland. I could be completely wrong but that seems a bit to me like putting up a site to teach Americans how to make a burger.

Even if I am wrong and immigrants really do need a resource to find these recipes from their homeland (and don’t already have relatives still there who they can contact for such recipes), the real key is that lots of non-immigrant Americans enjoy ethnic food. This site completely ignores that demographic. I think proper marketing to what I’ll blanketly call “white America” could yield a nice little spike in traffic if done well.

That’s all well and good for generating additional traffic but if it’s traffic that still isn’t generating income then it’s just more people.

Which leads me to my second observation.

Many of the ingredients used to make the recipes featured on this site are not easily obtainable at your average grocery store in “white America”. So I suggested to my friend that he find sources to buy the ingredients, specialized cooking utensils and anything else featured on the site. Especially the hard-to-find stuff.

Once he’s found those sources, forge an affiliate relationship with them. Then lace the recipes with hyperlinks connecting readers with the resources they need to actually make the recipes.

Just looking at the one screen shot above, there is the potential to embed many affiliate links.

Multiply that by the 7,000 or so (and growing) recipes featured and he has the potential to start earning a tidy little income.

I told him that he doesn’t need to find a few people to hand over thousands of dollars. He could be just as happy with many thousands of people each giving him a nickel here and a few pennies there (in affiliate commissions).

Mind you, these two observations took me literally less than one second. I didn’t even explore beyond the first page of his website.

How much better could you be doing if you had a true marketing professional help you figure out alternate ways of leveraging what you have to offer?

A Trip Down Memory Lane — Cha-ching!

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I’m sure you’ve heard of Classmates.com. They wanted to be Facebook and LinkedIn before either of those sites existed.

Although I joined Classmates early on, I never paid for the service and always had a really sour opinion of them because of their business model.

Classmates has the proverbial plate glass window. You can join for free and see all those people from your misspent youth that you could connect with… if only you’ll pony up a few bucks for their premium service.

Unless you pay for a premium membership, there is essentially nothing useful you can do on Classmates. Not only has this always hampered their growth and success but it crippled them when Facebook and LinkedIn came along. Both those sites let you connect with the very same people from your misspent youth for free. (Both sites are also quite profitable, I might add.)

But this article isn’t a slam on Classmates.com. Quite the opposite. I’m writing to applaud a brilliant move they made recently.

I received an email from them. No big deal, I’ve always gotten lots of emails from them. I think the only saving grace of the whole site is that they’re such savvy marketers.

The email I got the other day was different though. It included a graphic of a two-page spread from my yearbook. Not just a yearbook, but from my yearbook.

Classmates apparently has been going around and collecting up yearbooks from all the graduating classes and all the high schools all over the country. (I have no idea how complete their collection is.) They’ve digitized the ones they’ve got and now you can flip through the online pages of the yearbook for your own graduating class.

Not just that, but you can tag photos, identifying the people in them and linking to their Classmates profiles.

In a rare turn, all of this seems to be free.

So how do they hope to capitalize on and monetize this?

The most obvious thing I’ve seen so far are offers to sell you reprints of your yearbook in case you lost yours. Or just want another copy, I guess.

Now, I’m not one of those people whose glory days were when I was roaming the halls on my way to gym class. Those never were my best years even when I was in them. I remember all the people I knew back then and I’m sure that most of them are terrific people. I might even be friends with many of them if we met up somewhere.

The thing is, I now live something like 2,000 miles away from where I went to school. I haven’t been in touch with any of those people in more than 25 years. There’s only one person from high school I am still in touch with and we’ve been friends since before high school.

Still, for many people, the past was where all their best memories were made. And high school was the best of the best. So for Classmates to offer such a personalized trip down memory lane is simply brilliant.