Have you ever found yourself in a store, totally smitten with a product, only to walk out with something else? It happens all the time, especially in stores with a variety of brands. But why does this happen? Why do customers like a product but not buy it? The answer often lies in demographics, which can sometimes override a customer’s initial preference.
As a business owner, it’s crucial to understand that customers’ decisions are influenced by their social and psychological needs. Sometimes, your product might not meet these needs, and the customer won’t buy it, even if they were initially drawn to it.
Take, for example, middle-class shoppers looking at high-end, luxury items. Their buying decisions are often influenced by their social circle – friends, family, colleagues – people whose opinions they value. So, as an entrepreneur, your challenge is to figure out how to make this work in your favor.
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1. The Impact of Peer Opinions
Have you ever asked a friend for their thoughts before splurging on a high-end item or a tech gadget? Purchasing a new smartphone isn’t the same as picking up a jar of jelly from the store.
For tech-related purchases, you’re likely to seek advice from someone more tech-savvy to determine if it’s a good investment. This is a perfect example of how peer opinions, or “reference groups,” can sway a consumer’s decision.
This influence of reference groups is even more pronounced among shoppers in developing or under-developed countries. A customer might genuinely like your product, but if someone whose opinion they value doesn’t approve, they might not buy it. In these cases, the customer’s decision-making power is undermined.
Turning the Tables
To counteract this, some companies create their own reference groups and encourage people to join. This strategy indirectly influences consumers’ purchasing decisions. Entrepreneurs can also introduce referral programs, where customers receive discounts for referring others.
This approach can help neutralize external influences on the customer’s decision-making process. The discounts provide a justification for the customer to make their own decisions, regardless of others’ opinions, leading to a purchase based on their personal preferences.
2. The Power of Brand Loyalty
Many consumers have a strong attachment to specific brands. This loyalty can be so intense that they’d choose to wear their favorite brand’s T-shirts for business meetings, rather than switching to formal shirts from other brands. Even when presented with equally good alternatives, their devotion to a single brand can stop them from exploring other options.
This strong brand preference is a key factor in why some customers might appreciate your product, but still hesitate to invest their money in it.
Especially for entrepreneurs in developing countries, this brand loyalty can pose a significant challenge. Consumers often stick to brands they’ve known for a long time, even when presented with a wide array of new choices. They prefer the familiarity of known brands over the uncertainty of trying something new.
Turning the Tide in Your Favor
Traditional advertising methods like billboards may not be effective in this scenario. Your products are up against industry giants who have staked their claim and won’t easily yield to a new competitor. As an entrepreneur, you might need to create a strategy to highlight the unique benefits of your product.
One effective approach could be partnering with an established brand. This strategy is popular among many manufacturers as it makes their products easier to sell. The partnership doesn’t necessarily have to be with a brand in the same industry.
The goal is to leverage the established brand’s recognition to introduce your product to the market, making consumers more open to your brand.
3. Embracing Simplicity
The lifestyle of your customers can greatly influence their buying habits. For instance, those who lead a simple life often stick to what they know and avoid experimenting with their purchases. They view shopping as a chore rather than a pleasure, preferring to invest their time and energy elsewhere.
These individuals typically only buy what they absolutely need and stick to products they’ve been buying for years, within a price range they’re comfortable with. They perceive trying new products as a financial risk and are unlikely to be swayed by traditional advertising methods like billboards, radio, or TV.
Turning Simplicity into Opportunity
To appeal to this group, consider launching a comprehensive promotional campaign that encourages them to try your products. Offering enticing discounts, free samples, or discount vouchers can pique their interest and make them more open to trying something new.
If your product proves to be effective and isn’t significantly more expensive than what they usually buy, there’s a good chance they’ll switch over. In this way, you can turn a simple-living consumer into a loyal customer.
4. Fixation on Social Prestige
Some individuals place a high value on their outward appearance and the company they keep. They view their attire and product choices as a reflection of their societal standing.
This mindset is why luxury items like fragrances, beauty products, and watches often employ famous faces for promotion. If your product doesn’t align with their perceived social prestige or isn’t marketed as such, it won’t catch their attention. These individuals often move in celebrity circles and are highly status-aware.
These consumers prioritize brand recognition over product quality. They focus on how a product looks and whether it can boost their social standing. For instance, they might purchase a car that they only drive once a year, finding more satisfaction in simply owning such a vehicle.
Making it Work in Your Favor
The solution here is straightforward. If your product doesn’t cater to their specific needs, there’s no use chasing their approval. Instead, focus on marketing your product to your intended audience and invest your energy in selling to those who are genuinely interested.
5. The Role of Pricing
The price tag on your product can greatly influence a customer’s decision to buy it. Even if they adore what you’re selling, they might hesitate to purchase if it’s too costly. As a business owner, it’s crucial to understand that your product’s price can significantly affect its market performance. However, this doesn’t imply that you should slash your prices dramatically to draw in more customers.
For everyday necessities, price might not be a big deal for shoppers. But when it comes to luxury items, customers tend to be more cautious and considerate.
This category includes things like high-end fashion, televisions, or other expensive electronics and gadgets. Shoppers often factor in price before making their final choice. If your product exceeds their budget, they’ll probably choose a more wallet-friendly option.
Making Pricing Work in Your Favor
As business owners, it’s important to know who your customers are and tailor your marketing strategy accordingly. Keeping your prices competitive is also key. If you believe that your product’s quality surpasses that of others in your category, you might choose to keep your prices higher.
However, you’ll need to invest in a comprehensive advertising campaign to make your product stand out. Keep in mind, shoppers can be very selective, and if your product isn’t showcased effectively, you might miss out on potential market share and business opportunities.