Exploiting Value Triggers

Are you making shoppers feel like they are getting good value?

Last week we talked about ‘Value Framing’ and how value is often relative (based on comparison) rather than absolute.  Most of the decisions we make in life are based on quick judgements.  If we didn’t operate like this, we would spend our whole life deciding.  This is particularly acute in a supermarket.

Companies might have done their price elasticity studies, market mix modelling and simulated test markets, which, don’t get us wrong, are important. However, most shoppers don’t do the maths in store.  They don’t walk around the store comparing every product and calculating value.  It would be mentally exhausting.  They make very simple, quick judgments about value.  Indeed the more they have to think about whether something is good value, the less likely they are to buy it.

So, what are some of the simple rules of thumb that shoppers use to quickly judge value, things we call value triggers…?

Simple sells.  The simpler you can communicate, the more likely the shopper is to buy.  The same promotional discount, communicated in two different ways, can lead to big differences in sales uplifts.  The simpler one always wins.  We recently saw a simple ‘3 for 2’ deal in one retailer.  Most shoppers understand 3 for 2.  But in trying to make absolutely sure they understood it, the retailer over explained.  They talked about all the different permutations in the offer and made a simple offer seem complicated.  The more you thought about it, the less clear it became.  The less clear it is, the less likely you are to buy.

Visual cues, such as colour, are key value triggers.  Many shoppers have an almost pavlovian response to promotional colour cues.  For instance, the red & yellow of Tesco or the orange of Sainsbury’s.  Recently we have seen one Retailer use these colour cues on a normal price barker, with no promotional discount.  You can bet it increased sales.

Scarcity (actual or perceived) can influence behaviour.  We are all afraid of missing out on a bargain.  The more we can trigger this response, the more we are likely to sell.  For instance, the time limited promotion, the limited edition product only available until the end of the month.  Discounters use the ‘when it’s gone it’s gone’ offers to drive traffic on particular days.  Not only does this prompt the fear of missing out, it prompts the competitive instinct, the fear of missing out to other shoppers.

So, yes, crunch the numbers internally before you make price and promotion decisions.  But, in parallel, pay as much attention to how you do things in store.  Are you slowing shoppers down and making them think?  Or are you giving them very simple, value triggers?  Things that make them think you are really good value, better value than the competition.

Have a good weekend and speak to you next week.

© 2020 by Insight Traction