AIDA (Attention, Interest, Desire, and Action) is a self-explanatory sequential marketing process, and as valid today as it was in 1898 when first coined by E. St. Elmo Lewis who created the AIDA marketing funnel model for the life insurance sales industry.
The objective in selling any product from a pack of chewing gum to a mansion is to convince the prospect that your product or service is of greater value to her than the cash or available credit she now has. However, a distinct and sequential process of persuasion must be implemented prior to the customer agreeing to trade her cash for your offering.
Internet marketing guru Frank Kern recently released a pre-sales video in which he presented the “new” sales sequence, with the first step being “massive transformative value.” Marketing gurus are expert in recycling old concepst into new rhetoric, and Kern’s suggested criteria necessary for making a sale not only shadows AIDA; it improves upon it.
Without the prospect’s attention, a sale is not possible.It is no longer enough to get the prospect excited;Frank Kern says she must envision the possibility for transformative value, and for big ticket items, Kern invokes the necessity for massive transformative value.
Too often, retail merchants fail to show the transformative value of their products or service. Recently a shift toward commoditizing products and services by competing largely on price has cut margins in many industries by half. The appliance business is a good example; one large dealer recently reported than while in 2006 his margins averaged 34%, his 2010 margins were a paultry 14%. The problem starts from the “Attention” phase when we promote price first and fixate the prospect on price alone, resulting in the near exclusion of overall value and benefits of the offering.
There’s a saying that we can’t change the direction of the wind, but we can change the direction of our sails. Substitute “sales” for “sails” and one may envision alternate strategies to de-commoditize our products and services, even in the face of stingy consumer spending. One method is offering a stronger money-back or service guarantee than the competition. Another is batching products and services. This method combines several items as a package and typically includes some high margin offerings thrown in to compensate for the lower margins of the primary product.
Imagine a beauty salon offering a haircut for their standard price of $30, but a coupon for 50% off on a second visit but only during shoulder (light sales) hours. That’s net 25% off and it fills a chair that would likely go empty. The transformative value is the customer putting aside the initial cost, as the subsequent cost makes lightening her wallet today a little easier.
Groupon is a phenomenally successful marketing approach, wherein the services are usually cut by 50% in price, but paid for prior to use. The merchant usually gets a check before the customer is ever seen, and the customer’s transformative value is purchasing a product or service she likely has not before, and would not had the price not been so attractive. The services are often scheduled in shoulder periods and in at least 15% of the cases, are never utilized. The pricing gets the prospect’s attention; the quick cash and ability to manipulate the product delivery is the benefit to the seller. And of course, Groupon takes their cut too.
When evaluating the sales approach for any product or service, consider what approach, offer, or package will be perceived as transformative value, rather than focusing on margin-killing, price sensitive selling. In Part II we will discuss the new paradigm of “Interest.”