6 secrets of buyer behavior in a recession

This is a short excerpt from an upcoming white paper called “Getting Response in a Down Economy.” I’ll announce it in my newsletter first. Click here or use the yellow box at the top right of this blog to subscribe.

buyer behavior There’s no doubt about it. Business is tough out there. Every day brings more unsettling economic news.

But have things changed as much as some people claim? Has the recession completely changed buyer behavior?

In my opinion, no. Buyer behavior in this recession is very similar to buyer behavior at any other time, but with this important caveat: While people may be buying, they’re being far more cautious and making decisions far more slowly. So it’s harder to sell to them. Harder, not impossible.

Your customers are uncertain and afraid, but they are still essentially the same customers you’ve always had. All the same psychological principles apply, though some are now playing a more prominent roll.

By understanding this and allowing this knowledge to guide your selling strategy, you can give yourself a powerful advantage now and in the boom years to come.

Six things that are particularly important to remember now:

People love to buy. They love to discover wonderful new products and experiences. In America, and increasingly around the world, people see commerce as a natural and appealing activity.

People make buying decisions emotionally. They decide based on a feeling, need, or emotion. That’s why intangible benefits are generally the key to persuasion. For any given promotion, you should ask yourself, “What is the emotional hot button here?”

People need to justify decisions logically. While people make emotional decisions, they justify those decisions with logic and facts. You should always give people the appropriate justification for making a purchase.

People want to avoid risk. People pursue gain, but the urge to avoid loss is more powerful because it works on a more basic level. In direct marketing, people usually can’t see you or the thing you’re promoting before they part with their money. So there is always a level of distrust and suspicion you must overcome.

People seek value. Value is not a fixed number. It is a subjective relationship between the thing you are selling and what people perceive its worth to be. The greater the value relative to the price, the more likely people will respond to your offer.

People buy direct because of convenience and exclusivity. Don’t fool yourself. If your customers could easily find the things you offer at a nearby store, that’s probably where most would buy them because the perceived risk is lower.

These are not foreign concepts. They are always important. But now they are more important than when the market was flush with cash.

While a well-written headline and eye-catching photo can still make someone want what you’re offering, your customer’s fear and logic circuits are now operating on overdrive.

They need stronger justification and greater value than ever before. They also need more assurance that their financial risk is minimal or even that the purchase will save them money.

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June 9, 2009 | Filed in Selling Psychology

6 Comments

Comments

6 Responses to “6 secrets of buyer behavior in a recession”

The Direct Marketing Voice Links 6-9-2009 | The Direct Marketing Voice on June 9th, 2009 1:57 pm

[...] 6 secrets of buyer behavior in a recession [...]
Patty Coldwater on June 10th, 2009 12:22 pm

We’ve certainly seen the proof of what you’re saying. It often takes a face-to-face meeting to complete a sale in this economy. That’s why good lead generation is more important now than ever. Our business-to-business clients are seeing tighter corporate control of purchases and smaller budgets in their marketplaces.

One other thing to remember in this high-tech age is that many people still prefer to respond using a business reply card or envelope. We’ve seen larger response rates from promotions that give folks many ways to respond including the “old tried-and-true” BRC. Assuming that everyone prefers to go to a web site = lost responses from those who still prefer to respond by mail.
Dean Rieck on June 10th, 2009 12:29 pm

Patty:
You’re right about the BRC. Many of my clients (mostly the high-tech ones) want online response only. But an old-fashioned card often boosts response.

1. I think it’s a visual cue for response. 2. It’s very fast and easy, especially if the card is personalized.

Responding online often gives you that “uh oh, I’m going to get spam” feeling.
Patty Coldwater on June 10th, 2009 1:03 pm

Dean:
I think one other reason a BRC works so well is that it carries less obligation — the customer may be ready to take a “small step” but they may not be ready dial an 800 number, for instance, where they think they’ll be talking to a sales rep.

Also, you’re right about it being quick and easy. Just a couple of seconds to check off some boxes and drop in the outgoing mail box. No wandering around on a website, getting distracted by not-so-relevant pages, etc.

I’m fond of telling my clients that the sales process is a lot like dating. If you pop “THE QUESTION” too soon, the only possible answer will be NO!
Ted Grigg on June 11th, 2009 4:06 pm

One minor detail about BRC’s for BtoB lead generation — better to use BR’s because businesses don’t mind paying for their own postage.

Wow. Can you believe that I still bother with this level of detail in our business? Sad, isn’t it.:)
Why You Should Stay the Course | biz poetry on January 4th, 2012 9:16 pm

[...] people do, in times of economic uncertainty, is to tighten the money belt, hold off on purchases, and hoard cash like it’s the end of the [...]