In psychological terms, context is almost everything. Much as we like to think that we know how we will act and react in a given situation, without the richness of...
Picture the scene. You walk into the car dealership having made your decision that today is the day you’ll buy your new car. As you walk through the showroom, past all those gleaming metal forms you stop and linger over the model you expect to buy.
The visual excitement moves seamlessly into the sensory thrill of the smell of that distinctive ‘new car’ smell. Soon after that touch takes over, as your hands are drawn towards the surfaces and switches (which you happily press even though you know they won’t do anything).
The salesman, not wanting to appear too eager, leaves you for a moment before his own excitement takes over and he comes over to join you.
You tell him you want the car, reel off a list of options, and start trying to contain yourself so that you might haggle effectively. Unfortunately (but unconsciously), the fact you’ve spent so long feeling like the car is yours and imagining yourself driving it means that you’re far, far more likely to end up buying, however little the salesman moves on price.
“You’ll have to buy three,” he says, flatly.
“Huh?!” You splutter, thrown off the path of the conversation you were anticipating like a rider thrown from a horse.
“Well you could buy just one,” he adds, “but it will cost you 20% more.” He points to the price on a stand next to the vehicle. You read what it says.
“Car: £15,000 (3 for 2) or £18,000 for one.”
Confused and perturbed, you walk away. You definitely never wanted to buy three cars, but knowing that they were prepared to sell them at the lower price – which incidentally is what you roughly thought they would cost – makes the higher price unpalatable.
The situation I’ve just described is clearly ridiculous and, presumably, would never happen with a car dealership. But it is exactly what did happen to me when I tried to buy a bottle of wine from a national chain of drinks led convenience stores (or ‘off-licences’ as we call them here in the UK).
Every single bottle of wine was available as a 3 for 2 deal, and each bottle had two prices. The effective price you would pay if you bought it in a three for two deal and the full price if you bought it on its own.
So as a consumer, this ham-fisted approach to promotion meant I didn’t feel that the 3 for 2 offer was a bargain, I thought the single bottle price was a con. Here was a non-too-subtle attempt to coerce me into buying three times the amount of wine I really wanted.
Given that excessive home drinking is being flagged as a health time bomb in the UK I also think that such forceful pressing of higher quantities of alcohol is socially irresponsible. Whatever we may like to think about how we make an independent decision to drink and how much, the likelihood is that having more wine available would lead to higher levels of consumption of what is a potentially addictive drug.
Curiously, I found a press release dating back to March 2008 stating:
“Three-for-two was successful in 2005, but over time we have seen like-for-like decline in a growing market, and customers say single-bottle pricing is too expensive. We will be reintroducing proper promotions.” Single-bottle prices are to be lowered as three-for-two is cut back.
Leaving aside the fact that the company has made the classic mistake of listening to what customers are telling them (rather than test marketing the offer to gauge its effectiveness), and the Dilbert-style justification that something being withdrawn was successful, it seems odd that they are persevering with the promotion a year later.
Even if it does work I would suggest that there might be better ways of communicating the offer so that it didn’t alienate some customers.
I’m not suggesting that life is easy for chains like Threshers: they’re competing with supermarkets that have the regular traffic, lower rents (per square foot) and vastly lower overheads (as a proportion of turnover). But I’m fairly sure that promotions of this kind are not a recipe for long term success.
And, as those of you who have bought my EBook The Secret of Selling will know, there are a number of other ways they could increase sales and profit if they were willing to consider the way in which consumers actually behave, and tailor their retail offer accordingly. Forgive me for not going into details, but I plan to speak to Threshers in the near future and offer them my services.
Image courtesy: Gerard Stolk