January 15, 2010

More Wisdom from Jack Trout

As I mentioned in a recent post, I'm reading Jack Trout's In Search of the Obvious: The Antidote for Today's Marketing Mess. Here's another passage that peaked my interest because of how relevant it is to our industry:

Psychologists have outlined five basic risks that come into play, depending on what you are buying. They are:

1. Monetary risk. Is it worth the money?
2. Functional risk. Will it work as promised?
3. Physical risk. Is it safe to use?
4. Social risk. How will I look to my friends and neighbors if I buy it?
5. Psychological risk. How will I feel about myself for buying this product?

Thinking about these questions in the context of DRTV, it's clear why certain criteria became essential for success in our industry. For example, one way of explaining why the Divine Seven's "priced right" and "credibility" criteria are important is to talk about how they address monetary risk and functional risk. The below $20 price point all but eliminates the former. Making sure the product is good enough to generate authentic testimonials, pass lab tests and/or perform "right before your eyes" address the latter.

Physical risk is an interesting one. People have an inherent skepticism about the quality of DRTV products. The first question I'm usually asked about any item is, "Does it really work?" Now, raise the stakes by adding the risk of harm if the quality isn't right, and it's easy to see why certain items just aren't feasible for DRTV. Home electrolysis solutions come to mind. I think this may even affect products where bodily harm isn't a big concern. Take eyebrow shapers or home haircut solutions. They probably won't put you in the hospital, but they could cause embarrassing physical mistakes.

Speaking of embarrassment, the idea of social risk also provides food for thought. It's a rule of thumb that 90% of people won't buy off TV. Actually, I studied this once and found it was closer to 92%. We assume this is because of upsells, S&H charges, waiting 4-6 weeks for delivery, etc. But it may also be because of the social risk involved. Family, friends and other peers might make a person feel stupid for buying that too-good-to-be-true gadget off TV. Interestingly, buying the same item from retail might not represent the same risk because then it has the implied endorsement of the retailer. "It must a good product if it's sold at Bed Bath & Beyond," people will think.

Finally, there's psychological risk. How people feel about themselves after buying our products. Do they really end up with that "great deal" feeling we work so hard to engender (with value comparisons, special price reductions and bonuses)? Or do they experience "buyer's remorse" and feel like they were conned? If you haven't lost a little sleep wondering about this, you aren't paying attention. The people we rely on to make our TV campaigns successful call or click to get a $10 deal. But if we're doing a good job, they end up spending $50. Assuming they understand all the charges were necessary and properly disclosed -- and don't think us guilty of outright fraud -- how good do they feel about themselves when they get that bill?

As I mentioned earlier, when I started in this business the statistic was that 90% of people don't buy off TV. When I checked that number myself I found it was up to 92% ... and my research is now close to five years old. I suspect the percentage of people who will take the psychological risk of buying something off TV has continued to shrink. If the feedback I see online or the customer service calls I hear regularly are any indication, our pool of prospects is rapidly diminishing.

What do you think? Post a comment and share your thoughts with me. If you write something particularly thought-provoking, I'll share it in a follow-up posting.

2 comments:

  1. In buying products from DRTV ads, my biggest problem has always been the "up-sell." I've decided to buy the item, then have to go through 5-minutes of "no, thanks" before I actually get the item shipped. I've even told the person to skip the sell, I'm not interested, only to hear, "I have to do this as part of my job." Arrrggghhh!

    On a more positive note, I've never had a problem with the money back part of the deal -- they really mean it! Usually, they don't ask questions (or too many) and don't even want the product back. Good honesty there.

    The "how good can it be?" question is a good one, but the products I've ordered generally work as promised and do the job described. Durability may be another issue, though I've used one of those "Turbo," battery-powered shavers for YEARS (I just keep replacing the batteries) and it still works! It also shaves better than ANY shaver I've ever used! Not bad for a $12 item!

    Which brings up another thing. Most people cringe when they see "Made in China" on a product, unaware of just how many things we get from there that are of high quality. China has gotten VERY good at quality and technical proficiency. I have purchased beautiful, jeweled movement watches made in China and they work just fine. I also collect precision model cars (made in China almost exclusively), and the fit, finish and precision assembly are top-notch. I once received a model from Korea and returned it for poor fit and finish, with the proviso that the rep be sure they sent me one of the ones (same model) made in China. The difference was like night and day!

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  2. Although the statistic for people who buy from TV (or admit they buy from TV) may be declining, I suspect consumers who see a DRTV campaign and go online to buy items place themselves in a different category. More and more DRTV campaigns are seeing higher percentages of online orders (higher than 50% in some cases).

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