Let's look at something that happens in our daily lives. When you go into a Starbucks, the staff asks you, "Hello, sir. Would you like a small, medium, or large cup?" "Tall, Grande, or Venti?" Which option do you choose? Usually, we would probably pick the medium cup. Why is that? Because we think to ourselves, "If I choose the smallest one, they might think I'm trying to save a few cents by picking the cheapest option." But if I get the large cup, I might not finish it, and I'd just be wasting it. Therefore, we often choose the medium cup without even realizing it.
Generally, when we are given choices like this, we tend to choose the most reasonable-looking option, not just for coffee. But you should know that a medium cup at Starbucks is larger and more expensive than a large cup at other coffee shops. In fact, this relates to human psychology. The managers at Starbucks are very good at using this kind of psychology. Because they are a large company, they have professional staff who study the psychology of buyers. Among the two choices of a small and medium cup, they add a third option, the large cup, just as a decoy product to make you choose the medium cup.
Even though after they put the large cup on the market, not many people buy it, the medium cup sells extremely well. And for this medium cup, Starbucks makes more profit than from the small and large cups combined.
In this book, "The Secrets of Marketing," the author raises many strange and unusual examples that we should learn from. The author believes that using psychology to understand customers and build good relationships with buyers is the best marketing strategy. Behind these narratives and examples lies a lot of experience. Marketing strategy is not made by a business owner sitting in an office trying to think of good methods. It requires the business owner to go out and meet, ask, and study the real needs of the customers directly. This book doesn't just describe a lot of knowledge, expertise, or marketing theories to you. This book explains the secrets of marketing in an easy-to-understand format, especially for owners of small and medium-sized businesses like you. The author of this book is named William Berger. He is a doctor of marketing and a professor teaching MBA courses at Harvard Business School. He has also been a marketing consultant for many large companies such as Nokia, Kodak, and General Electric. It can be said that this book is a distillation of his more than 20 years of practical experience and application in this field, combined with the marketing expertise he taught at Harvard University.
Next, I will use three questions to summarize the important content in this book.
Question 1: Why is it said that a good marketing strategy comes from the buyer, not from the seller?
Question 2: How can we observe customer behavior to define an effective marketing strategy?
And question 3: How can we build good relationships with customers? First, let's answer question 1. The author believes that a good marketing strategy doesn't come from a business owner sitting and thinking in their office alone. It comes from directly observing the needs of customers. So how do we know the needs of our customers?
When we talk about the word "marketing," we can't forget the "4P" principle. The 4Ps come from the acronyms of four words that all start with the letter P: Product, Price, Place, and Promotion. This is the marketing strategy that you all have learned in school. This strategy comes from the seller. Both the product, price, promotion, and location are determined by the seller. And these things are barely related to the buyer at all. There are many examples of business owners creating a product that doesn't meet customer needs, setting prices and arranging promotions without caring about the customer, and in the end, they fail without knowing the reason. It wasn't until 1990 that Mr. Robert Lauterborn made further revisions to the 4P theory, creating the 4C theory. And this 4C theory comes from four words that all start with the letter C: Consumer (the customer), Cost (the initial price), Convenience, and Communication.
Mr. Robert believes that business owners should focus on the needs of their customers, try to reduce the initial cost, make the purchase process convenient, and communicate effectively. Let's take the example of a mobile phone company to discuss this. By using the 4C theory to explain later.
The first letter C is Consumer, the customer. Before starting to market, we need to know what they need. It's not about a group of people sitting around thinking of creating features or designing styles without asking about the needs of the customers at all. For example, if your phone is designed for older people, you should design the buttons to be large and the text to be spaced out, with simple and easy-to-use functions. If your phone is designed for women or young girls, you should focus on its civilized appearance, a clear and beautiful camera, and bright, vibrant colors.
And if you create a phone to sell to men or businessmen, you should follow the example of the Vertu phone. You need to understand the feeling that your phone gives to the user. Men want image, precision, and the good quality they get when they hold this phone. This is the difference between 4C and 4P. For 4P, the letter P stands for the word Product. They would probably only focus on designing their product, but not on creating it to fulfill the needs of the customers. The second letter C in the 4C theory is Cost, the initial price. It is different from the letter P, the second one in the 4P theory, which is Price, the price. Cost, the initial price here, does not refer to the import price. It includes the time, travel expenses, and other capital that the customer spends to buy your product. For example, you open a pizza shop. You sell one pizza for only $5. But the buyer has to travel a long way to be able to buy your pizza to eat. This makes them waste travel expenses, have to queue up and wait for several hours.
This makes the buyer waste time, for example. If just wanting to eat your pizza makes them travel for a long time, have no time to exercise, and makes the eater feel that eating a lot of fast food affects their health, the capital they spend to buy your pizza is even higher. It's not just money, time, and mental pressure. These capitals, when added together, are much more than $5. Another thing, sometimes even free things make them feel the cost is high. If you make them wait for two or three weeks to receive their item, or have to travel a long way to get the free thing you give them. Therefore, when you set a marketing strategy, it's not just about considering the initial cost of the product alone.
But you must pay attention to the various initial costs that the customer has to spend to buy your product. The third letter C in the 4C theory is Convenience, ease. How to make it easy for your customers to buy, easy to use, and easy to share and recommend to their friends and siblings, for example. Do you provide timely service to them? Have you written instructions on how to use it or how to store it when they buy your product? The last letter C is Communication. A good marketing strategy is to pay attention to the customer and communicate with them frequently. Have you ever thought about where your target customers are present?
How do you find them? And how do you attract them to buy your product? What websites do they like to use? Do you recommend they like your page or subscribe to your channel to get more information?
Let's summarize a little bit. The arrangement of this 4C marketing strategy is to think from the customer's perspective, to think for the customer. It's not the business owner themselves sitting and thinking and then assuming what they need. The seller must go down to meet directly, ask the customer directly, and then arrange the marketing strategy to match what they need.
Besides paying attention to the four points above, you should also pay attention to studying and researching as well. At this point, you are probably wondering. The marketing department is mostly about practical application, such as writing marketing plans, organizing advertising campaigns, and so on. It's not easy for any company to conduct a study or research, which we call "research and development," before starting to market. But the author believes that you must conduct a thorough and in-depth study first before setting a marketing strategy. Studying and researching marketing strategy means collecting information, analyzing customer data, and observing the products of competitors. Find out what makes you different from others first, then come up with a marketing strategy later.
Here, the author recommends two methods. First, learn from the big players who have done it best in each industry, which are a number of large companies such as Coca-Cola, Apple, Starbucks, and so on. And second, is to dare to experiment and not be afraid of being wrong.
Let's look at the example of the leading computer manufacturing company in the world, which is Apple Inc. of Steve Jobs. What kind of marketing strategy does this top company have? Why did it stand out more than previous pioneers like Dell and IBM, for example? These large computer manufacturing companies, including Dell, HP, Lenovo, and so on, day in and day out, use every means to compete for their market share, to find a foothold in this industry. But what we all cannot deny is that among all these companies, Apple has done the best.
Before setting the marketing strategy, Steve Jobs conducted a thorough market study. He observed that on the market, most computers were only white, black, or grey. There were not many other colors. But Steve Jobs dared to create computers with bright and vibrant colors that were different from others, such as gold, pink, green, and so on. This invention may not seem very big. But if you are a computer manufacturer producing hundreds of thousands of units like Apple, this decision is not small at all.
Apple's presence on the market has truly changed the overall perception of users about computers in the past. This is also due to the creativity of the founder and the detailed research on the needs of the users. They want a computer that has a slim design, no annoying fan noise, and not too many messy USB ports.
But not everyone has the ability and intelligence like Steve Jobs. The question is, how can we understand the needs of customers on the market? Next, we come to the second important point. How to observe the needs of customers through daily life to set a suitable marketing strategy. The author says that a smart marketer knows how to observe the needs of customers through daily life. The slogans of famous large companies in the world, such as "Just Do It" by Nike, "Think Different" by Apple, and "Connecting People" by Nokia, for example, all came from direct observation of customer needs. It's not that the founders of these companies suddenly thought of all these words. Here, the author has raised a number of psychological principles that can help us understand the human mind, which most marketing experts often use.
Let's look at these three psychological principles. First, everyone is afraid of loss. You have probably experienced this before. When you go shopping for clothes, when we bargain and the seller doesn't lower the price, and we are about to walk away, the seller says one last word, "Sir, there's only one set left, that's all." The seller wants to show us that if you walk away now, you will lose the chance to get this outfit. Maybe later, even if you have money, you won't be able to buy it. They want you to make a decision immediately by putting psychological pressure on you, because they know that everyone is afraid of loss. The fear of loss is a psychological phenomenon that everyone has. And if you know how to take advantage of this weakness, your business will probably be able to make people want to buy your product even more. To explain the psychological phenomenon above, they conducted a small experiment.
Suppose they let you draw a lottery and give you two options. First, you don't have to draw a lottery; they give you $3,000 right away. And the second option, they let you draw a lottery, but the ticket you draw can have two outcomes. There is an 80% chance of getting $4,000 and a 20% chance of not getting a single riel. Which option would you choose? Most people would choose to take the $3,000 and walk away because they don't want to face the 20% risk of getting nothing, afraid of not getting a single riel. In another separate experiment, they gave two options as well. First, you don't have to draw a lottery, but you will lose $3,000. And the second option, 80% chance of losing $4,000 and 20% chance of not losing a single riel. In this last experiment, most people chose to draw the lottery, even though they knew there was an 80% chance it would make them lose $4,000.
The experiment above confirms that most people are afraid of losing what they are about to get. If at this time they can take $3,000, they are not willing to risk it to get $4,000. Understanding this psychological principle, you can use it to apply in your marketing strategy. If you want them to buy your product, you should not tell them what they will get. But you should say that if you don't buy, what will you lose? Doing this will make sales increase by another level. Coming to the second psychological principle. Taking a little advantage of others to gain trust. Hey, it sounds like it's not so good. You all are not misunderstanding. When I first read this book, I also thought the author wrote it wrong.
Taking advantage of others, asking for help from others, how does that become a way to strengthen a friendship? Let's look at this story. An insurance salesperson, when going to a client's company for the first time, asked the client to pour him a glass of water. According to the experiment, doing this makes the percentage of sales increase significantly. This means that when you depend on someone for something, it makes your relationship closer than before. Because when they help you with something, it's like an investment. Their investment in our mutual feelings. They are afraid of losing this emotional connection. Even if it's the first time you've met.
But you have to remember that this reliance is a small reliance. It should not make the customer feel too much pressure. It's funny, isn't it? Relying on them can make our relationship even closer. Like a saying goes, "If you want to know someone, rely on them for one thing. If you want to be close to someone, rely on them for two things." Understanding this psychological principle, you can use it to apply in setting your marketing strategy. The third principle. If you want to attract their attention, you have to know how to distract them. Why is that? Because when you know how to divert their attention, to make them distracted, the buyer will lose their careful consideration and will be easy to make a decision immediately. Those who have been in a casino probably already know. In a place like this, they play loud music, a bit flashy, and you can barely hear each other. This is done to make you feel disoriented and to make you lose your careful consideration, to make you dare to make a quick decision, to play games without hesitation.
In the network marketing industry, some companies that sell health products also market in this way. They invite thousands of people to participate in their program, and they play loud music. People sitting next to each other can't even hear each other. Then they arrange for sales staff to talk to you, showing you the benefits and effectiveness of it. The situation is chaotic, the music is loud, coupled with the sound of them cheering and clapping, plus there is a discount for a limited time, you also decide to buy from them. You don't care if it's effective or suitable for you, you just buy first and think later. This is a very good example where they use this third psychological principle to distract your attention, so you don't think too much. And in sales, this strategy is truly effective. The above are the second important points that were raised from the method of setting a marketing strategy by observing the psychology of the buyer.
The author has raised three psychological principles that we should pay attention to. First, everyone is afraid of losing what they are about to receive. Second, if you want your relationship with customers to be close, you must know how to rely on them for something small. And third, know how to distract the buyer's attention, so they don't consider too much before buying. But the author also added that there is no technique that can be used for everything and is always effective. As a business owner, you should know how to analyze the problem, study the situation, and then decide on your own path. Next, we will answer the last question. How to build a good relationship with customers? When we talk about customer relationships, we have all heard a phrase that says, "The customer is king." What does this phrase mean? Does it mean that if you have money, you must be served like a king? Are there other ways? If you just want to provide good service, high-quality products, and maintain a good relationship with buyers, what should you do?
Many companies have given a high value to customers. Some companies shout slogans every morning, "Customer first, employee second, company third." "The customer is king." "Never let the customer be dissatisfied," and so on. Everyone understands this. Everyone knows that the customer is important. But not many companies can actually do it. So what should be done to maintain a good relationship with customers? At this point, the author has raised three methods. First, think for the customer. Second, find people who clearly understand the customer to be your employees. And third, act as a customer, using your own products or the products of your competitors to get the feeling that the customer gets.
First, let's talk about the first method. Think for the customer. When we think for them, they also think that we are one of them. But it's not about seeing a customer and immediately thinking of a way to get money out of their pocket to buy our things. We have to think for them, "Is this suitable for them?" Ask them, "What are you buying this for? What's the best way to buy it to save money?" for example. One example. If you are the CEO of a company that sells a certain type of product, you are very busy. Day in and day out, you only think about strategies to make the company grow, to make sales boom. In your office, there is a lineup of your company's products, from toothpaste, toothbrushes, to shampoo, all of your brand.
Doing this does not make you see anything new. And it will make you obsessed with your own products. The right way to do this is to take all the competitor's products that are on the market, including your own products, and put them on a shelf together, and then sit and look at what makes your product special and different from others. Because this is the view that the customer sees when they are choosing to buy. With so many products like this, the choices are numerous. What makes your product special? What makes them choose you and not the competitor's product?
I'll give another example to confirm that thinking for the customer, understanding the real needs of the customer, is very important. You all probably know 7-Eleven, which is a famous convenience store. There was a time when they wanted to do a promotion for sushi. Buy two, get one free. Increase the quantity, price remains the same. After 7-Eleven announced this promotion, sales did not change at all. It was even harder to sell than before. What was the reason for this?
In fact, this promotion of increasing the quantity while the price remains the same is only applicable to poor countries. In Japan, most families are small, with only two or three members. Increasing the quantity more than before like this is not the real need of the customers. The large quantity is not finished, and the leftovers make them feel pressured. Therefore, marketing is not something you just do. You have to know clearly what the customers really want. A clear example is the computer manufacturing company IBM, which once chose its old customer, Mr. Louis Gerstner, to be its CEO.
Mr. Gerstner did not understand computer technology. He also did not understand this industry. But because he did not understand and had been a long-time customer of IBM, he knew clearly what the customers wanted. As soon as he took office in 1993, he made many reforms, both in the company's organizational structure, relationships with distribution partners, and creating products that met the needs of the market, for example. Which has saved IBM from a company that lost more than 8 billion dollars a year to making more than 3 billion dollars back in 1994. You probably wonder, "So, the tens of thousands of IBM employees, did none of them see this problem?" Actually, no one really saw the problem.
It's no different from a chess player. The player only thinks about playing. But the person behind can see and consider more broadly. Therefore, making yourself an outsider to look at your own problem can truly help you analyze it from all angles and more reasonably. Putting yourself in the customer's shoes, using your own products or services, you will know where your shortcomings are. This is why some large companies such as Apple, Xiaomi, for example, often take their own customers to be their employees. Finally, let's summarize the important content in this book. First, the author raises the new generation of marketing strategy, the 4C principle, which is a new marketing strategy model that focuses on the customer. In addition to this, the author also emphasizes the importance of research on the market before setting a strategy.
Next, we have raised three psychological principles that marketers or every business owner should know. First, everyone is afraid of loss. Therefore, you must make the customer feel that if they don't buy, they will surely regret it later. Second, if you want to gain their trust, you must rely on them for something. And the third method, if you want them to buy, you must create an atmosphere that makes them distracted, so they don't have time to consider too much.
Finally, we have raised the method of maintaining a relationship with the customer, and letting the customer use and test the product or service of ours, so they can provide feedback and constructive criticism for the institution to develop itself. And we ourselves must act as customers, using our own products, testing the products of our competitors, to know where our weaknesses are.
This book was written more than 10 years ago, but these strategies and techniques are still usable and not outdated.