Kevin Hogan

International Speaker

Latest Articles:  Stopping the Black Swan Can You Become a New Person?

1): The $9,999 Key Strategy

Perfect Price for Selling House, Car, Product

There are very specific two pricing strategies that have proven effective in consumer research and in retail profits. One of those strategies I save for Influence: Boot Camp. Here’s a thumbnail sketch of the other.

For decades retailers have used the “99” strategy. And now consumer research has shown that it IS effective. But how effective depends on one key criteria. First an explanation of what the “99 Strategy” is….

  • Gas is 1.99, not 2.00.
  • A car sells for 24,999 not 25,000.
  • A house sells for 649,900 instead of 650,000.

OK. Does it really matter in terms of sales, if a product or service is priced a penny or a dollar lower?

What, if anything, is working here? Any of them? Really?

The answer is that if your 99 is going to change the FIRST digit in your price, it’s likely to have a significant impact on sales. If the 99 is NOT going to change the first digit of your price it is NOT going to have an impact on sales.

So, 25,000 vs. 24,999 shows no significant difference in sales.
But 30,000 vs. 29,999 shows a dramatic difference in sales.

450,000 vs. 449,999 shows no significant difference in sales.
500,000 vs. 499,999 shows a very significant difference in sales.

100 vs. 99 shows a significant difference in sales.
80 vs. 79 shows only a minor increase in sales.

So as odd as it may be, the difference of a penny or dollar in a 20,000.00 product DOES make a difference but it is significant and pronounced when it determines whether the first digit is a 1 or 2.

The “99” helps bypass resistance to pricing, because the product is *less* than $100. When the price odometer rolls over, it’s a big difference. That edge has remained consistent for quite some time and I expect it to continue in the future.

2): The Tommy Hopkins Close

Increase Sales with Price of a Coffee Technique

Consumer research has now shown his old strategy to be effective in raising sales. (I probably should have used it more often!)

One of the renowned real estate sales trainers of all time said you should reduce the price of a product to the ridiculously low price. A $100 item is only 29 cents per day over the course of a year…“less than the price of a cup of coffee.”(Ironically enough!)

Consumer research now shows that this approach *does* increase sales. And there are a couple of ways to create a frame that help your customer say “yes.”

Women will tell you that it isn’t the cost of the sweater, but the cost per use. I remember the first time I heard this I flinched. I thought I had heard everything. It turns out the cost per use is a *real* justification for purchasing women’s clothing.

And for various other retail products the “reduction to the ridiculous” bypasses resistance and makes a sound message palatable and easy to say “yes” to. Here’s to the price of a cup of coffee!

If I were to do further study on this technique, I would test phrasing like, “…and you still get to have coffee every morning.”

I’d also test, “for the price of a bottle of water…”

Finally I would look at products like, “a pack of gum.”

You can do the same and see if other phrasing helps as not everyone drinks a cup of coffee or is familiar with the cost of that cup.

3): Stop the instant “No” gut reaction.

Anyone who is meeting you for the first timresistancee will have a couple of different responses to you. One reaction they have will be based upon your appearance. You and how you adorn yourself. But that’s for another day.

The key reaction you will face almost daily is gut level and it is negative. Everyone will be at least somewhat distrustful, somewhat disliking, and feeling uncomfortable. Count on it. You were wired that way. “Don’t talk to strangers.” Every culture has that notion because strangers have proven over the years to be unpredictable or unsafe where people that you know are more predictable.

You don’t know the intentions of someone you’ve never met. You bet they are self interest (and they are). The question is whether there is “your interest.” All defenses are up and they will only be let down if you are aware that they are up and that you are doing everything possible to help bring their defenses down.

Use a few of the Alpha or Omega Strategies (resistance and reactance lowering strategies discussed in the Science of Influence Library) to bring down their defenses. Once they are down THEN you can begin to share your message. Until they are substantially second nature you simply can expect that your attempts to communicate are all shot down.

Alpha Strategies often help build security and a feeling of safety in your future client. There are dozens of specific techniques you can use to accomplish this. One is a letter of introduction. Another is a testimonial. Yet another is a respected third source validation of whatever it is you are selling. Inducing Reciprocity.

Someone sent me to a website the other day saying, Hey Kevin, what do you think of this book? Do you really like it? I told them I didn’t know anything about it. Then I realized that about a year ago I reviewed the book, found it useful for a special niche of people, and said so in the form of a testimonial. The very first thing on their website was a picture of me and my testimonial.

Sales and Integrity, Kevin HoganBy leveraging my words and putting my face out there (which I think is safe to say, that I’m typically read as someone with unbreachable integrity, someone you feel comfortable with, someone you trust and believe) they immediately drop the instant fear reaction of their potential website. (Needless to say I was a bit embarrassed!)

I might not have recalled reviewing the material, but a lot of other people bought the book based upon that review!

4): Rediscover Differences and Benefits

This is the most exciting of today’s tips!

Look at your product or service today as if for the first time and from the experience, eyes and mind of someone using it. What does your customer see in your work as it’s greatest benefit and what do they see that is different.

You look at your work and see something VERY different than your clients and customers. If your customers are return customers then find out what your service or product is doing for them…and do it soon!

Example: We get a lot of e-mails about a number of our programs. The most common email is about the Science of Influence Library. What are people saying? There is a cluster of common themes. (I paraphrase)

a) “I like it because I can use it today and have, to make more money.”
b) “I love it because I’ve never heard this before.”
c) “I love listening to you and how you present the information.”
d) “I learned so much!”

Now, I take that information and make sure that those factors appear in the promotional copy of anything I write. That’s either done through a written testimonial or through the promises of the program to the future customer.

These are the responses of my customers. The stimulus was their buying the program. Don’t I want to hear that even more?

It’s important to remember that the way you present yourself, your product, your service is based on your training and your own feelings and opinions about any of these things. How other people experience you, your products is truly an entirely different thing.

You can find out what these things are not by saying, “what’s best about my stuff,” but “how do you use the widget?” Another excellent question is, “what do you find to be the most valuable aspect of the widget?”

5): Leverage Customer Feedback.

Once three people who don’t know each other, share something about you or your product, you can make an adjustment in how you present it. I always listen and take action on what my customer doesn’t like…even if it doesn’t make a lot of logical sense. In once case that did make logical sense, it was easy to change…

For a long time we used labels on all of our CD’s. Some people took the time to write that they didn’t like them. After we heard this from a few people we changed well over 80% of our CD’s to reflect those wants of the customer and by the end of the year will have everything re-done.leverage customer feedback

My customer doesn’t have to have a reason for what she feels, she only has to tell me. (I appreciate hearing a reason but reasons are usually justifications for reactions which are instinctive. In other words…they matter but not that much!) We heard two significant recurring themes last year.

We were also told that sometimes a track on a CD would not be clear. (For some reason it didn’t burn properly. We stopped using service A and switched to service B. That was easy.

Make the changes that you can control when your customers are talking to you.

6): Bring out Your Weaknesses so They Don’t Have To

The best salespeople on the planet communicate their product’s weaknesses early and clearly. Every product has some drawback or even flaw that makes it imperfect. Because people instantly react negatively and look for the holes in your proposal bring out your products negative feature early in your message. Be bold, Be honest.

Customer appreciate honesty

A Lexus is a fine car but it isn’t cheap and you can tell that to your customer. He knows that to be true and therefore was thinking about it. If you are selling life insurance and your policy is $10 higher than your competitor point out the fact that your company is rated A vs. their B and that is far more important than $10. When people are presented with honesty instead of “walking around the weakness language” they respond appreciatively.

7): Be Time-Conscious.

Time is arguably your most valuable commodity. When I communicate with someone I am very conscious of their time (as well as mine). If I’m in the position where I’m asking someone for their time (not paying for it) then I will have set a razor sharp specific amount of time to communicate my message to that person. Without further permission, I will not take up any more of their gift to me than what I asked. This earns great respect from most people (probably from everyone who can make a decision about anything!). You do the same and your sales and your business will appreciate dramatically.Respect your Customers Time

Never underestimate your intrusion on even one extra minute of time and always consider the enormous benefit of using LESS time than you suggested. Busy people will only listen to a short, get to the point message.

The very busiest people are the most likely to be your best customers.

They are the most successful!

Respect their time and you win them over for life!

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Author of The Psychology of Persuasion, Irresistible Attraction, and The Science of Influence, Dr. Kevin Hogan is trusted by organizations, both large and small, to help them help their people reach their personal peak performance and maximize influence in selling and marketing. Kevin is an internationally admired keynote speaker and corporate thought leader. In Coffee with Kevin Hogan, he shares his research, observations, and how you can apply them in your life – both in business and at home.

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