How to avoid your customers paying pain...that increases sales and profit margins?
The answer is:
Don’t sell like a Sushi chef
You might be thinking why I said, “Don’t sell like a Sushi Chef” I went to Japan once for a business meeting, in a restaurant, I found they were selling Sushi, the famous dish in Japan.
In restaurants, customers have to pay for each tiny piece. Every bite customer take seems to have a price tag on it. Though it was tasty, When I was eating Sushi for five bucks each, a question appears in my mind. “Do I want another one?”
The selling products in a way that the consumer sees the price increase with every bit of consumption causes the most pain. Of course, this isn’t physical pain, but rather activation of the same brain areas associated with physical pain.
If you are an Indian, Just imagine if you are asked to pay for each Pani Pari how do you feel? Haha sounds strange? Many business owners are selling individual product for a single result, in my previous article on Neuromarketing, I described the benefit of bundling the product which even helps to sell a high priced car.
Let me give you an example, there is a company A and B both sell the product that controls Hair Loss. To control hair loss generally Shampoo, Hair Oil, and Supplement are required.
Company A sells Shampoo, Hair Oil, and Supplement separately and separate prices whereas Company B Sells shampoo, Hair Oil, and Supplement in a bundle single pack.
When a customer approaches Company A to purchase Shampoo to control Hair loss he/she will purchase the only Shampoo even if Company A is pitching for the other 2 products it’s hard for the customer to decide to purchase other 2 products.
However, for Company B it is easy to sell all three products because they are not allowing customers to purchase products separately, customers subconscious mind will force him to think that all the 3 products are mandatory to control hair loss and allow him/her to make a buying decision.
[Consumers are] not weighing the current gratification vs. future gratifications. They experience an immediate pang of pain [when they think of how much they have to pay for something].
AOL is an internet provider in the USA earlier they used to follow pay-per-hour pricing rule later they changed the pricing structure from pay-per-hour to pay-per-month. After that, they started to get a flood of subscribers…People love to prepay for things or pay a flat rate for things. Again, it mutes the pang of pain.
The worst-case alternative is when you pay for sushi or Pani-Puri and you’re paying for per piece. Or watching the taxi meter; you recognize what proportion every inch of the way is costing you.
Marketers have realized this for years, and they have responded with offers designed to minimize the pain associated with buying their products. I am sure you are familiar with Netflix; they have crushed its video rental competitors in part by its “all-you-can-watch” price strategy.
Cruises are popular because they deliver a vacation experience for a fixed price. In each case, the marketer offers one , relatively attractive price that removes additional pain from the buying experience. These tricks avoid customers paying pain.
Paying for Pain Avoidance
In many situations, the single price is higher than the amount the consumer would have spent on individual food items, movie rentals, etc. Nevertheless, the all-inclusive number is likely to attract many consumers and make the buying decision fast by avoiding the pain of paying.
Article Takeaway: Avoid Multiple Pain Points
To minimize customer pain, marketers should always try to avoid multiple individual pain points in the purchasing process. Some situations make the individual purchases unavoidable; for example, a grocery store can’t offer fee-based shopping instead of item-by-item pricing.
Many business situations, though, allow some experimentation with a single-price approach for items usually purchased separately. Such as a monthly or annual fee instead of individual transaction like many cloud Software companies charges a recurring monthly charge, offer customers an option to pay annually to save some bucks.
That simpler pricing approach may boost not only sales but because some people can pay a premium for pain avoidance, profit margins also.