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