The old adage that half of a marketing budget is wasted is an accepted truism to many, but why should this be Experience tells us that we are not always successful in our marketing efforts, otherwise we would bottle the formula and be zillionaires. The margin for success in any marketing campaign is narrow. Understanding the elements required can improve the probability of success.
So why is it that customers buy sometimes, and sometimes dont, even when the product or service is fit for purpose and generally does well in the market
In astronomy and astrobiology, the circumstellar habitable zone (CHZ), or simply the habitable zone, is the region around a star within which planetary-mass objects with sufficient atmospheric pressure can support liquid water at their surfaces.
This habitable zone is also called the Goldilocks zone, a metaphor of the children’s fairy tale of Goldilocks and the Three Bears, in which a little girl chooses from sets of three items, ignoring the ones that are too extreme (large or small, hot or cold, etc.), and settling on the one in the middle, which is just right .
For consumer purchasing, there is also a Goldilocks zone that can be initially and simply defined by two axes: Time and Money.
The consumer must have sufficient time to recognise the need, to research the options available to satisfy the need, then to carry out the purchase and finally to use or enjoy the purchase.
Time must be sufficient, but not too plentiful. If too much time is available, the customer will dither over the purchase, perhaps reviewing many more options, and may even fail to complete a purchase at all, putting it off until another day. How many of us wait until March to start thinking about investing in an ISA ahead of the April deadline
Adequate funds need to be sufficient for the purchase, as otherwise the consumer if just browsing or window shopping . But again, funds should not be in too great supply as the alternative options which then become available are enlarged, and substitutes may be brought into play. The purchase of a vacuum cleaner could be substituted by a human cleaner if sufficient funds are available.
There is an ideal region within which a purchase is most likely. Outside this range, consumers will either find alternative solutions to their problems and unmet needs, or will make no purchase at all.
How to open up the Goldilocks zone
So what can marketers do to stretch the size of the Goldilocks Zone and increase the value of sales
The absolute aspects of the two criteria can be modulated by the introduction of, for example, price discounts, which may ameliorate the lack of funds.
However this will be effective only for a small section of the market as others will not need discounts. The unrestricted offering of discounts simply reduces margin and devalues the brand. It also encourages price deflation in the sector and eventually leads to price wars.
Clearly, it’s not possible to increase funds or time available, but we can address the shortage of time for example by offering sale or return to consumers who then feel less rushed into making bad decisions.
On the other axis we can offer a time sensitive discount that encourages a decision within an artificial time frame (buy now while stocks last etc.).
This sort of discount again needs to be limited but does less to damage brand reputation. Online, retargeting tools allow us to show display ads during a browser session to remind consumers of products they like and encourage purchase.
Charles Nixon is the chairman of Cambridge Marketing Colleges.