Tuesday, March 15, 2011

Tamp Down Fear Points If Selling to Suppliers

My thanks to the RIMtailing blog readers who participated in my “Profitable Pricing Tactics for Small Retailers” webinar last week.
     During the webinar, I was asked about setting a higher price for a product or service that relieves fear for purchasers. Here’s a more complete answer than I gave at the time:
     Never overlook the value of a good scare. However, raise the fear because you’ve a product or service to offer that will substantially reduce the worry. Unless the customers come to believe that you’ve a remedy, many will ignore the risk in order to make the fear go away.
     Other customers won’t ignore the risk. They’ll stay afraid and become quite irritated with you for getting the fear started. Either way, you’ve lost a sale. Raise enough fear of a real danger to win the customer’s attention, but only to the degree that you’ve a guaranteed way to substantially reduce the risk. Don’t oversell.
     This point took a different tack because of the specifics of the question from my webinar participant. The participant wants to decide on pricing for a monitoring device which will reduce the possibility of residential damage, and therefore reduce the homeowner’s fear. The participant plans to sell the device to insurance agents and insurance companies, who would then, in turn, sell to the homeowners.
     Here, the fear appeal should take two channels:
  • The people doing your selling will benefit by you providing them marketing materials and sales scripts that dramatize the true dangers and show how what you have available can ease the worry. As long as you’re proposing the remedy, the degree of fear arousal can be relatively high. With the damage prevention device, you might talk of the average dollar cost and the emotional costs to a family when their home is severely damaged.
  • Those people doing your selling also will be motivated by fear you arouse in them. But tamp down the degree of fear you aim to arouse in your sales reps. Otherwise, their emotions will blind them to how to best craft fear appeals to their customers. The insurance agents could be reminded that unless they succeed in selling this sort of device to the homeowner, the insurance company underwriter might not approve the policy, thereby depriving the agent of their sales commission.
Click below for more:
Scare Customers Into Buying
Craft Fear Appeals

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