Years ago, when my business partner and I were at lunch before a big pitch, we were joking around with the perfect invention. We were imagining that we had found the perfect formula for human choice. A formula that could always predict what a group of consumers would buy.
Wouldn't that be something?
Now there are models out there — predictive modeling, reasoned action formulas — that come close. But the variables that humans rely on, rational or otherwise, are sometimes missed by the most well-thought-out theory.
Just recently we read up on some behavioral psychology, and it reminded us about the three core things that drive consumers — needs, values, and resources. We'll start this week off by going through each one.
Needs are really quite simple: what is necessary for life. We can elaborate by adding what is necessary to maintain our current quality of life — the baseline. Without satisfying needs, consumers will have a tough time concentrating on values and resources. So what can a marketer do to grab attention for a need? Making sure your product is available when the consumer needs it, wherever it is most convenient for them. Products and brands that fall into the "need" category cannot make consumers jump through hoops and ladders, because substitutions will have very few switching costs.
Values, on the other hand, can be a goldmine for marketers. And we see that. Values are those sets of beliefs or morals that the consumer thinks heavily influence their daily lives. If buying local is very important to the consumer, then they will pay that extra premium in order to do it. If a certain consumer will only shop at stores owned by women, or shops with a religious affiliation, then the prices will reflect that kind of niche reach. With brands that fall into this category, brand loyalty is an essential matter. Coca-Cola and Nike have done remarkable jobs turning their brands into value brands. Apple has as well.
In consumer terms, resources can refer to money. That almighty dollar. Remember, our favorite definition for economics is "choice under scarcity," and in the past few years, people have not had the amount of cash readily available like they used to. So with their limited funds, consumers have had to make tough decisions. This can be a good or bad thing for brands. If their customers stick with them during the tough times, then they know that its inelastic demand can withstand downturns, and are probably considered a "value" and not a "need." If the brand loses customers, then it can evaluate if it's the current economic conditions or product positioning. In many cases, it'll be some kind of combination.
It is important to keep in mind that the overall goal is to show consumers that our clients and our brands have something that can improve their lives. A good product will do great with a good marketing strategy, and a bad product will fail even faster. Concentrating on something as simple as needs, values, and resources can help your marketing and advertising campaign start strong.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.