Offering stripped-down models with the option of add-ons has always been a great way to woo entry-level customers. But the appeal of add-on accessories can go beyond this. Researchers from London Business School, Harvard Business School, and Duke University found that when a shopper learns add-on accessories, such as a tripod for a camera, are available, the shopper's opinion of the basic product becomes more positive. This increases the profit potential.
It's the availability of the add-ons, not necessarily their purchase, which improves the consumer's ratings of the basic product. And it is add-on accessories, not add-on features, which do the job. Offer a 32MB memory card for that base 64MB camera and the consumer's evaluation of the base camera goes down.
Add-ons of all sorts appeal to the loads of customers who like to customize. The NikeId page invites you to "Customize your game" by selecting add-on designs and colors. And at a Mars site, you can add on to M&M candies your messages and photos, "as long as it doesn't leave a bad taste in anyone's mouth," which does seem to be a sensible requirement when it comes to M&M's.
From another angle, offer add-ons because many consumers are learning to start simple even if they can afford the fancier version. Philips Electronics says that more than 50% of Philips products which shoppers end up returning have absolutely nothing wrong with them except that the purchaser couldn't figure out how to use all those features they'd bought.
The advice for retailers: Merchandise and price your items to feature both basic models and packaged upgrades. Whatever the customer buys, you can follow up in a few months to let them know about the add-ons you have for sale.
No comments:
Post a Comment