Pricing & pitching.

By Gonzalo López Martí  / LMMIAMI.COM

In the direct marketing business (aka direct sale or direct response) the product, the actual item to be sold, is the last piece of the puzzle.

Contrary to conventional marketing’s conventional wisdom, the direct response business model is built on a brilliant consumer behavioral trait (or insight, as we like to call it too): there’s an awful lot of people out there who will buy anything that costs less than 20 bucks.

• Pure unadulterated psychology.
• At its finest.
• If it costs $19.99 plus shipping & handling and I get satisfaction guaranteed or my money back, you got a dealeo.
• The Revolutionary Cucumber Chopper?
• Hell yeah!
• The Miraculous Anti-Wrinkle Ointment?
• You betcha!
• The Effortless Sweatless Ab Cruncher?
• Overnight it.
• The Mighty Magical Carpet & Upholstery Stain Remover?
• I. Want. It. Now.
• Must be an evolutionary wrinkle in our DNA.
• We just have an atavistic urge to buy junk.
• On the conventional marketing side of the fence, first & foremost we try to identify daily life problems.
• Only then we proceed to develop products or services to deal with them.
• The pipeline to go to market in the direct response realm is reverse engineered.
• They don’t really pay much attention to the item itself.
• They peddle solutions in search of a problem.
• Even if there’s no problem, they peddle the solution regardless.
• Did I say peddle?
• They hustle the hell out of it.
• They pump it to their core audience with a fire hose.
• Once again, these companies operate under one question and one question alone: can we sell & ship the SKU at a reasonable profit for $19.99?
• If the answer is in the affirmative, they pull the trigger, crank out a copy&paste script, shoot a déjà vu infommercial and duly proceed to fill their firesale-purchased graveyard airtime inventory.
• If the product is borderline telegenic they know for a fact that someone will buy it.
• And these guys have pretty permissive standards as to what is and what is not telegenic.
• Two words: Billy Mays (RIP)
• My respects.
• Long live Billy and his perfectly trimmed Just-For-Men hued beard.
• He was a go-getter, a square-jawed motor-mouthed visionary.
• Sorry.
• I’m getting emotional here.
• He was Fidel Castro in an alternate universe of feel-good guiltless crazy capitalist self-confidence.
• Why isn’t there a Hispanic Billy Mays making a killing in Spanish-speaking TV.
• We need one.
• Still, price and pitchman are not the only variables in the equation.
• There’s more to the brilliant, bullet-proof 19.99 consumer insight.
• Under the $20 threshold only a tiny fraction of shoppers will bother returning an item which might have not fulfilled expectations.
• In the mail order biz returning a product signifies repacking it, taping the box, paying a visit to the Post Office, standing in line, being in the receiving end of postal worker passive aggressive aggravation.
• It ain’t worth it.
• Genius.
• So you thing this is just an anecdotal footnote of our marketing & advertising noble profession?
• Think again.
• The department store concept and the entire American garment industry might be built on this premise too.
• You probably knew that if you pay full price for an item at, say, Banana Republic you have the right to stop by at the store when said item goes on sale and reclaim the difference (if you produce your receipt, that is).
• Of course, nobody bothers.
• Shop til you drop.
• After all you can return it later, right?
• Hence people buy stuff absentmindedly under the logic that they can try them on at home and bring it back to the retailer it if it doesn’t fit as expected.
• Which, you guessed it, rarely happens.
• America’s closets are chockfull of unused, unreturned merchandise, more often than not with the price tag still attached.
• Do the exercise of visiting a department store, take a stroll around the fitting rooms and see who takes the time to actually try stuff on: only foreign tourists do.
• Americans shop on the run, charge it on their credit cards and leave.
• Where’s your receipt?
• The attendant dropped it in your shopping bag.
• It’s gotta be there somewhere.
• Go find it (hee hee hee).
• Of course, there’s a tiny fraction of people with discipline, cunning or time on their hands to game the system and take full advantage of their customer service rights & prerogatives.
• Yet the percentage of shoppers that do so is less than tiny.
• Retailers couldn’t care less.
• By the way, did you know that one of the main sources of income for the gift card industry is unredeemed issuance?
• You’d be surprised, even alarmed at the sheer percentage of gift cards that go unfulfilled.
• It might be the best kept secret in said racket.
• I’d dare say it is the one secret of its success.
• As it is for Groupon.
• People buy the deal on-line with their credit cards, print the coupon, dump it in some drawer and forget about the whole thing.
• Millions of dollars in laser hair removal and manipedis waiting in limbo, where they’ll stay until kingdom come.
• I’d dare say, though I can’t prove it, that this simple logic is the bedrock upon which Amazons and eBay built their enormous edifices.
• Not to mention Home Depot & Ikea.
• This very principle applies to a myriad mindless expenditures of daily life.
• -low stake gambling (Lotto)
• -iTunes: 99 cents per song.
• -charity (wanna round up you bill for the boy scouts?)
• After years and years of honing the art of fundraising, organizations like Unicef have found out that some people donate and some don’t.
• Once you shell out a few bucks, they’ll hit you up forever.
• They put you on the list.
• They know you have what we could call the charitable gene.
• And now for the actual point of this article.
• In the ad business we’ve been complaining for years about that nasty habit our clients have of stifling our profitability with increased, allegedly unfair pressure: every fiscal year the scope of work goes up and fees go down.
• Maybe we should apply the Billy Mays logic.
• Dear client, how much d’you want to spend?
• $19.99?
• Ok, let’s get to work.
• Satisfaction guaranteed or your money back.
• Let’s avoid protracted negotiations that only create friction, animosity and bad chemistry.
• Things will fall into place.
• With one disclaimer (to quote a clever meme that has been circulating socially as of late):
• If you want good & fast, it won’t be cheap.
• If you want good & cheap, it won’t be fast.
• If you want fast & cheap, it won’t be good.
• Clients are smart and they will eventually understand.