Why People Buy

Why People Buy: Learn the Secret to Getting in Their Heads

It’s true that you can’t buy happiness, although people will continue to try.
If you dig deep into what triggers the buying decision,
you will uncover something very interesting about why people buy. First, though
we’ll look at the thought process involved in different kinds of purchases.

buy_nowThe Daily Purchase: Want vs. Need:

Let’s take a simple example of the daily coffee shop bagel & coffee, plus a
take-out lunch.

These purchasing decisions are triggered by something very basic
desire. Buying these small-ticket items can also be a force of habit, occurring
each day or in a cycle based on past practice. The brain tends to blur the line
between “want” and “need” because the financial impact of these purchases is minor
and will not have an immediate, dramatic effect on your wallet.

Rarely will a person quibble over paying $5.00 for coffee and a bagel, or $7.50
for lunch each day. However, if you wanted to be thrifty and make your own coffee
and bagel and pack a lunch, the impact over time could be significant. The do-it-yourself
method may cost only $4.50 (plus your time) versus $12.50 for the convenience of
take-out. On average, people work 250 days per year, which could bring the yearly
savings to a whopping $2,000!

So why does the brain “turn off” the potential long-term financial impact of these
purchases?  Just like an addiction, the desire for something that you want
can easily override the logical thought process and allow you to justify your actions.
The short term impact is minor, so the decision is easy. Note that everyone will
not fit into this category, but everyone has desires that they can justify based
on the limited short term impact.

The Occasional Purchase:

What happens in your brain when it’s time to buy a larger-ticket item, such as
a television, computer, appliance or furniture? This is where things start to get
interesting as the different parts of your brain begin tugging and pulling against
each other, bringing desire and logic prominently into the picture. What triggers
the buying decision, and how do you make the decision from whom you will buy? There
are several elements that come into play that were not part of the daily purchase.
As the immediate financial impact of a purchase increases, the logical side of the
brain becomes more prominent.

Why do you think furniture stores are offering one year of free financing for purchases
over $1,000?  It lessens the immediate impact and gives the customer the
illusion of paying less. Here’s an interesting phenomenon that occurs during
this type of purchase. People will actually start to look beyond just price and
quality and consider the overall purchase experience, including the person or company
from whom they are making the purchase. While this is not always an overriding factor
in this type of purchase, we can see a change in the thought patterns of the customer.

Price is still the most important factor, followed by quality. However, the element
of trust starts to sneak into the decision. You’re making a good sized purchase.
Do you trust the people with whom you are dealing? Will they be there if something
goes wrong? Purchase of these medium-ticket items begins to trigger an entirely different
pattern of thought as you measure the importance of your comfort level during the
buying experience.

The Large Purchase:

Let’s take the most obvious type of purchase in this category – an automobile. You
will be spending tens-of-thousands of dollars and will most likely finance the purchase.
Car dealers will try their best to trigger your brain to react to saving money.
Listen to every commercial on television or the radio. They all focus on
that single trigger. Whether it’s a factory rebate, low financing, or incredible
discounts, they are making the sale related directly to the price. But is that really
the overriding trigger in a purchase of this size? Surprisingly, it’s not!

If all things were equal in this world, an approach like that would work every time
because all sellers would be on an equal playing field. Luckily, that is not the
case, and competition among sellers is based on more than just price. Other factors
that the buyer will consider heavily include quality, features, and brand loyalty.
In this case you probably think of brand loyalty as Ford, Chrysler, Chevy, Toyota,
etc., but what about a customer’s loyalty to his or her car dealer? In a purchase
like this, the trigger that emerges as a very strong factor is trust in the relationship.

Good car dealers will do everything they can to build that trust with a customer.
In the United States, an adult will purchase an average of eight to ten cars in
their lifetime. If over that time the average car price is $20,000, that’s at least
$160,000 in purchases from a single customer, not to mention any parts and service
business that the relationship may bring! This is what is known as the ‘residual
value of a customer.’ Generally speaking, it is the total value that a customer
brings to you over the lifetime of the relationship. So you can see why it is important
to be aware of the “trust trigger” that plays into large purchases.

Lifetime Purchases and the “Trust Trigger”:

It’s the American Dream. Own a home. It’s the single largest purchase that you will
make in your lifetime. It’s also the one purchase that is seen as a long-term investment,
despite the fact that only a small percentage of people remain in their homes long
enough to pay off the mortgage. Buying a home is such a complex process that all
those triggers are going off in your brain at once, and one trigger must be the
final, determining factor in making the purchase.

So how does your brain sort all of this information into logical segments in order
to make a decision? Well, in this case everyone is different, but there are a few
things that remain true regardless of personality type. As people begin to move
outside their comfort zone financially, they seek other influences to help bring
them back into that comfort zone again. In other words, if you decide to spend a
lot of money and make a lifetime investment, you will look for some reassurance
that you are making the right decision. People will often look to friends, relatives,
and professionals in the industry whom they have come to trust. Think about what
happens when you are considering buying a home. You will usually view the home with
a realtor the first time and get some basic questions answered. The realtor should
be working with your best interests in mind, and will show you homes that fit the
criteria that you have communicated.

If that home gets onto your “short list” you will probably have family members come
with you for a second viewing to get additional input from people you trust. In
turn, your family may ask the realtor various questions. After careful review, you
make the decision to buy the house and take a final walk-through with some close,
trusted friends. You get their thoughts and weigh all the information before making
a final decision.

This process could take weeks or months! Rarely would someone purchase a home on
impulse, though it has happened. Throughout the process, you can see a pattern emerging
in the decision making process. The larger the purchase, the more likely the buyer
will look for reassurances that they are doing the right thing. They will go to
people whom they trust and get their feedback, ideas, and advice. Now you can see
why the “trust trigger” becomes incredibly important in a lifetime buying decision.

When people spend large amounts of money, pulling them out of their comfort zone,
it sets off their “trust trigger” and they look for reassurances to get back into
the zone. While price and quality are important, never underestimate the power of
trust in a relationship.

Good sales people, regardless of what they are selling, work hard to establish a
trusting relationship with their clients. They realize that the residual value of
a customer is much more important than getting that immediate sale. They know that
a trusting relationship is sometimes more important than price and quality, although
all three must add value to a purchase. As they say, you can’t have one without
the others. Make it a priority to stay in front of your clients and build a trusting
relationship so that you will be in their thoughts when they pull the “trust trigger.”

 

Best Regards!

Greg_sig

Greg Incardona
Follow Your Customer Inc.

Previous lessons in this series include:

Mike VernonWhy People Buy