Sales Strategy: Use Fear in Tough Times
Tuesday November 4, 2008
When consumer confidence sags and the buying behavior of your customers changes, it takes a new approach to selling instead of just trying harder. Many companies focus on what the customer can gain from a product or service offering. In good times, with less risk aversion, it's all about making money, improving one's life or some positive outlook.
Today consumers are avoiding risk. The operative selling word is f-e-a-r. What your customers have to lose is much more motivating than any gain.
Psychologists Daniel Kahneman and Amos Tversky studied human nature and risk. When test subjects were given the choice between odds of 4:5 to win cash or a guaranteed win with less money, they picked the sure bet. When asked the same odds but framed as a loss, they selected the riskier option. The lesson is in today's economy, let customer know what they will lose by not buying your product or using your services. Use fear as the motivator to buy.
Hi Darrell, i got to your blog page while searching for tips on improving referrals. Actually, I’m a graduate engineer with an oil servicing company in Nigeria, but I’m doing a month’s training with a young off-shoot of the company, and I’m preparing a presentation on boosting revenue through referrals. Think you might have more info/ideas for me? I’m going to bookmark your page, and use paste the link on my sources slide. More power to your elbow, Darrel!
Hi Darrell,
I can’t say i totally agree with the fear appeal approach, but i can say that a client of mine uses what he calls the Pucker Factor.
John Johnson and Anne Marie Smith wrote a book called the 60 Minute Strategic Plan and talk about that you need to create motivational impacts that cause people to sit up and take notice.
They cite an example of Granite Rock that printed on all invoices — “if you’re not completely satisfied, Do Not Pay Us” and instructed the customer to just mark out the charge where they had failed to satisfy and reduce the invoice by that amount. It reduced errors internally, that’s for sure! It did the same as what you’re proposing, but by making the customer say “i can’t do business without these guys, they take away my fear…”
TJ
http://www.60msp.com
Does that mean fear is helpful and we should use it in tough times? Avoiding risk may be risky if what you were avoiding would have been profitable.
We should probably use faith in tough times, right?
Hi Darrell,
I love all the information you produce. We need to work smarter not harder during these tough times. Let the customer know they are getting a quality product at a great price. Keep putting out the great articles, very interesting read.http://www.LingerieOasis.com
hello.darrell!
I an undergraduate from Nanyang Technological University, Singapore. I am doing a business plan currently as a project. I find that your articles are very helpful. Just wanna leave a message and say “THANKS A LOT!!!”
Zhou Mi