In my previous article (Offer a Full Range of Better Benefits), I wrote about people trading up. It means they buy high priced, high quality product versions. They reject middle quality products that have lower beneficial functions.
Based on what Michael J. Silverstein & Neil Fiske wrote in their book "Trading Up: Why Consumers Want New Luxury Goods" & some articles, trading up isn't only based on logical benefits. People want emotional advantages of status, satisfaction & comfort. Some brands & products are chosen based on consumers' statuses & personalities.
Mid-priced products without emotional engagement could face "death in the middle".
People will buy commodities to save money because they won't spend extra for average products. They buy low cost commodities, so they can afford other high quality products.
Some mid-level quality products are barely above commodities. Unless mid-level quality is perceived as worth a mid-level price, people trade down & buy low cost commodities.
It can be hard to quantify mid-level value & prices. Example: Are 25% better results from a mid-priced product a better bargain than a 25% cheaper commodity? It might not be enough to make a product worthwhile.
If a mid-quality product is $25 & a high quality product is $50, you can discuss advantages, priorities & restrictions. If mid-quality product results won't fulfill people's top criterion, trading up for high quality feels necessary.
Guide customers' decisions with questions. Example: How long are the results needed? Explain the advantages, so people can choose. People trade up to buy from among the top tiers of luxury. Example: Luxury cars have various options like leather seats. People might opt for basics (regular seats) because a brand as a status symbol is more important than optional features. Seats aren't publicly conspicuous.
Status is a result people will gladly buy. Ask which results are people's top criteria, so you can provide maximum satisfaction.
Reputations for People & Products
When status is the desired product result, it's a matter of product reputation.
When there's one chance to make a great impression, some people don't settle for less than the best. They buy products with reputations for dependable results & might still need your advice to use products for optimal results.
When people's reputations depend on your advice, you can build a reputation competitors can't match.
When their reputations are at risk, people might trade up to avoid negative perceptions. When people trade up, they spend a lot of money, so you can justify investing in knowledge you need for superior customer service.
You can help people realistically invest to fulfill their criteria. What are the long-term advantages & disadvantages of fulfilling their minimum criteria? How much more would it cost to fulfill their maximum criteria? Is that improvement worth $XX?
Since establishing & maintaining a reputation is a high priority, people are willing to invest in high quality results. When your store is linked to high quality, you can attract people based on their priorities. Example: 'We have what you need for high quality results because we know how important your priorities are. So, never compromise when you need __.'
Ask for details to help people trade up to get functional improvements like durability. Ask about how products will be used because durability depends on quality & conditions.
How do customers expect products to make their lives easier? How do they expect higher quality products to improve results?
With those answers, you can help customers choose satisfactory products.
People might trade up to avoid disappointing recipients who depend on a result. To help people be satisfied, ask about their roles & what they expect.
Role fulfillment can involve using products to produce results for others. Example: When parents pay for higher quality because they want what's best for their children.
How Will You Improve Customers' Lives Today?
You should know how each of your products & services can be used to improve customers' lives, so you can make compelling offers.
Some aspects of compelling offers are: preventing or mitigating damage; reducing stress by resolving issues; easy to implement solutions; increasing enjoyment & satisfaction; &/or decreasing pain & dissatisfaction.
As you review current inventory & suppliers' offers, consider how products prevent problems or improve the future. Also consider what you can combine to make easier, more satisfactory offers.
Is a product, service or combination a commodity commonly available in many stores? If it's a commodity, competition will probably be based on convenience &/or price.
Your offers should be proprietary because eventually it becomes harder to increase convenience & decrease prices. You can make some product offers proprietary by adding services &/or information.
When you have proprietary compelling offers, consumers might recognize the value & pay profitable prices. If it's a proprietary offer, competition will probably be based on functionality, durability &/or dependability.
People might trade up to buy it.
Qualifications & Quality
When people want to trade up, vendor credibility can matter because people expect the best results without frustration. When a store seems to lack credibility, people might reject it to avoid frustration.
Establish credibility by asking questions that elicit meaningful answers. Example: You might suspect damage is caused by mice. When you know mice enter through very small holes, you can ask customers to describe their walls. Using poisons won't help much until the holes are patched.
Competitors, who have less information, can be less qualified to offer solutions.
You can be more qualified based on how you use product & local information to combine products & services into solutions. Learn enough to connect causes (holes), effects (damage) & desired results (fixing damage & banishing mice). Example: People will be frustrated with poisons & traps. Poisons & traps don't fix the problem because they can't keep mice from entering.
You can offer repair products & information about finding mouse holes. Example: 'We'll help you fix the real problems instead of selling what seems to be right.'
Increase your qualifications by answering these questions: Which problems arise locally? What are the possible causes? What worked before & what made it work? What could've made it better? What's changing & could make different products & skills necessary?
What would make products better suited for changed conditions? Depending on what customers need & can afford, which products are good, better or best? They might stop the damage now. When they can afford repairs, they might choose basic repairs & trade up later. You can help people step up until they can trade up.
People can afford to trade up when they reduce other spending. You can attract them by helping to reduce some spending with plans. When people have plans, they can buy what they need without spending extra.
When you provide instructions, people can have money for trading up because they avoid waste by using materials correctly. As you obtain products, learn the skills for producing the results, so you can add instructions.
If you don't find applicable instructions, adapt an instructional model from similar project instructions.
Develop Trade Up Offers
To help consumers plan their best experiences, you need to know what their best options are.
Use these guidelines & questions to develop offers people will trade up to buy.
What's happening now/recently happened/will happen & how can this product (combination) make it better?
How can we help customers use this product (combination)?
What's the maximum value in this product line?
Thank you for using my blog. Please let me know if I should clarify anything.
Copyright 2019 Dennis S. Vogel All rights reserved.
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