Customers buy because of their perceived need. Most of the time, their perceived need is actually a want. Many companies fail to recognize this difference and therefore make costly mistakes by developing products and or services that don't catch on. There are several factors that determine why customers buy a product or service from one source over others. The main factors are as follows:
Brand Awareness - Is your customer aware of your existence? They need to know about you as a source or option. Your location, whether it be brick and mortar or the first page of Google are important factors in determining your Brand Awareness and market penetration.
Product Features and Benefits - We are all customers. Have you ever compared features of a particular product or service? We all do it. A good example is when shopping for a Cell Phone Service Provider. We compare the features of various plans offered by the competing companies. Most importantly as customers though, we focus on the benefits. What will that cell phone do for me? Maybe it's the security and peace of mind to know that I can call anytime or anywhere during an emergency? Or maybe it might make me feel good to know that my monthly bill will be a flat rate every month.
Product or Service Pricing - Let's face it, there are customers that price shop. Then there are customers that are willing to pay more for what they perceive as a better value. Have you heard the term, "Getting the most for my money"?
Brand Reputation - what does your market think about your brand? Dominos Pizza recently learned that the majority of their market had the opinion that their product sucks. They learned specific details as to why their customers felt their product was inferior against their competitors. Dominos then used social media to their advantage by asking for customer input to develop a new and improved product.
Word of Mouth - What are your customers saying about your company, product or service? Results from studies have shown that a satisfied customer may share their buying experience with 1-3 people. On the other hand, if they had an unpleasant experience with your company, they are likely to share that information with 10 people. This is one of the reasons customer loyalty is so important. Social media and customer rating sites have made it extremely easy for customers to review and share their buying experience. Smart companies are learning these new marketing concepts and using them to their advantage.
The most successful companies today are leveraging their knowledge of the fore mentioned concepts with social media technologies. In my blog post titled, "Corporate Marketing- Simplifying the Social Media Challenge", I discuss a simple and effective way for companies to approach their social media strategy.
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