The Oldest Customer Disease is RTD.

There is an area of the brain called the ‘nucleus accumbens’ – or to use the plain English version, the craving spot. This is the spot that literally ‘lights up’ when (for instance a smoker feels the craving to light up.)

Most people would know that intuitively or believe me when I tell you. But here is the killer.

When stimulated, this area requires higher and higher doses to gets its fix. That also makes sense, right? [As matter of interest, Lindstrom (2008) has published research that shockingly reveals that the graphic images on cigarette packs actually stimulate the craving for the next smoke! The irony is that not only does smoking kill, warning people about smoking also kills even more people.]

Discounting is the drug of choice for most retailers.

But here is something worth thinking about: the pleasure derived from bagging a bargain is also an addiction that requires higher and higher doses in order to satisfy the consumers’ cravings. Consumers develop RTD – Resistance to Discounting.

And this puts most retailers on a downward spiral of ever-increasing discounts. Which leads where….?

Maybe we should take our medicine and star weaning the customers from that addiction? Start adding value rather than simply buying tomorrow’s sales with cheap discounts. (There is a time and place for discounts, and definitely room for sales promotions. But it does not always have to be 30% off.) Discounting may become the superbug that will one day resist all forms of 'antibiotics'.

BREAKING NEWS

As of 30/10/08, the second edition of The Age of Conversation has been launched. It is an amazing story about a group of evangelists (237 to be precise, some more hardcore than others) who have embraced the social media platform (Web 2.0), and decided to walk the talk and use the web to converse, to cooperate and to care.

The end result is a book (The age of conversation: why don’t they get it?) and I consider it to be mandatory reading for anyone who considers themselves as being (or having to be) attuned to the ebb and flow of the market. You could  become part of it too...

For the full story plus links – read all about it here. I am pretty sure you will like it.

Have fun

Dennis