Tuesday, June 30, 2009

Match the Product to the Customer's Skill Level

Sometimes the best item for a customer depends on the person's skill level. Take power tools, cameras, and sports equipment. It could be wise for a low-skill customer to buy equipment requiring high skills if the customer is in the process of building those skills. It doesn't make good financial sense to buy the entry-grade equipment and then have to put out more money for the upgraded version a few months later. Get out of the customer's way, especially when the highest grade equipment carries the highest price.
     But a tradeoff with high grade equipment is that it might require considerable skill to use it properly. You don't want customers misusing what they purchase from you. If they wreck the equipment and then come to return it to you, you'll either accept the return and take a loss on the equipment or worse, one of your staff will refuse to take the return, thereby losing that shopper as a customer.
     To keep up your profitability, sell skill-based equipment based on the customer's true skill level. Unfortunately, customers often misjudge their true skill level following biased product demonstrations. Katherine Burson at University of Michigan had participants practice putting golf balls. Half the participants putted from a distance of ten feet, the others putted from a distance of three feet. After completing their putts, each participant was asked to choose from among golf balls marketed to different skill levels. The balls labeled as being for higher skill levels cost more.
     The people in the three-foot-putt group had sunk more shots than those in the ten-foot-putt group, and as a result, the three-foot group chose the more expensive balls. They'd misjudged their capabilities.
     How well are your staff matching the skill level of the customer to the skill level required from the product?

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