Whether you are in consumer retail or business-to-business sales, increasing sales revenue is often top priority. But if you are asking yourself how you can get more customers to shop in your store, you may be asking the wrong question.

There is a critical distinction between “shopping” and “buying,” said Margaret J. King, Ph.D., director of the Center for Cultural Studies and Analysis. To understand this difference, take a look at basic human primal behavior. “Our hunter-gatherer ancestors understood the difference,” King said. “Shopping is gathering — and most of what is gathered is information. Actual buying is much more like hunting — a dedicated search to isolate a single prey with the intent of bringing it home. Buying can involve shopping, but shopping isn’t dependent on buying.”

With big-ticket items, consumers begin the information gathering well before the purchase is made. According to King’s research, “people start noticing the difference between their car and other cars on the road at least six months before they even realize they are in the market for a new car.” Said King, “Overall, the car-buying process involves at least 18 months spent in scanning first the highways, then the ads, then the showrooms in order to funnel down to the best fit to our latest driver identity.”

Even with all that time spent gathering information, the final decision made by a consumer is more often than not based on intangibles rather than hard facts and data. “The key factor in the whole buying decision is the emotion,” said Pam Danziger, market researcher and author of “Shops that POP!” “In this day and age, the culture is shifting to more what you feel than the rational, quantifiable factors when buying a product.”

According to Danziger, there are four factors that turn shoppers into buyers: Need, product features, affordability and emotion. Need brings the consumer into the store, and product features and affordability draw the consumer’s attention, but emotion seals the deal. “When it all comes down to it, you are in the best position as a retailer if you can enhance the emotional perception of a product,” Danziger said. “Be it the color, be it the feature, be it the bling. Make them feel excited that it’s going to enhance their lifestyle,” she said. “This is especially true for the affluent top 20 percent of consumers.”

Too many retailers have the philosophy of, “Stack it high and watch it fly. Price it low and watch it go,” Danziger said. While this may lead to sales initially, it is short-sighted in terms of relating to customers and increasing the status of your brand. “That’s less and less attractive to consumers today, particularly the affluent,” she said. “The challenge is to increase the perceived value so that you can command the price that you need to be profitable. For small businesses today, profit is key to survival, and you can’t make a profit by cutting prices.”

Big-ticket items

Consumer buying decisions are even more complicated when it comes to big-ticket items such as a car or housing, where consumer purchases can fall into the realm of “expressive buying.” “The big-ticket items have even less rationality to them because we think we already understand what’s important,” King said. In reality, we are ignoring logic and making a purchase that we feel reflects our aspirational self. “We’re buying our future, we’re buying opportunity, we’re buying status,” King said. “That is especially true for cars, because the car is ‘you’ on the road. People associate you very closely with your car. You have spent a lot of hours in your car and it is an extension of your social status and self-image to the world.” Purchasing a home is also an expression of that aspirational self. King said that more than the style of the house, size or even cost, the location of the house helps to define the self, answering, “Where do I belong within the social geography of my world?”

What makes these big-ticket purchases even more challenging for consumers is that it is nearly impossible to determine the return on investment (ROI). “We never really know how well-spent our money is,” King said. “With big-ticket items, it’s hard to say. You have no way of comparing yourself at 28 different schools. What’s the opportunity cost of taking School C over School A and School B?”

Business-to-business sales

Emotion-driven purchases and anxiety over big ticket items, themes so common in business-to-consumer sales, are at play in business-to-business sales as well. Businesses-to-business sales can be challenging; the customers are often more sophisticated than the average consumer and are averse to high-risk purchases. Jim Drennen, marketing manager at Cat Pumps, understands that while a business owner may be savvier and more focused on the bottom line than the general consumer, emotion still comes into play.

“Experience is the product. The product is the souvenir. We think customers buy products based on functionality and features, when there is always an emotional component involved,” Drennen said. “Do I trust what you’re saying about the product? Am I confident in your ability to deliver or support us? Emotional components go beyond the product itself.”

Cat Pumps builds confidence in its brand by focusing on delivering excellent service through the entire customer journey, from how phones are answered to how customers are supported in the field. “The product itself has to be good; people expect that… but it goes beyond that. Once we understand that people make decisions emotionally and justify them rationally, then we start to understand how we can help our customers feel confident about the purchase they are making,” Drennen said. “We help them through the process so they feel assured we’re going to help them keep their car wash open on a Sunday. That’s really what they’re buying. The pump is a souvenir; they are actually buying being open and ready to take care of their customers.”

A Small Business Pulse survey conducted in September 2014 by The Alternative Board (TAB) business consultant group found that business owners often perceive vendor information as too sales-oriented. Drennen works with his sales team to take a different approach with his customers. “Suppliers need to quit selling; we need to reassure our customers,” Drennen said. “Suppliers have to put themselves in a position to offer information that is relevant to the customers and do that without a sales approach. We are selling, but we also want to be as neutral as possible and offer information about actual application and case studies.”

Crowdsourced feedback

When researching a potential purchase, business owners prefer to find information from vendor representatives and the company’s website. There is, however, a clear distinction between educating oneself on a purchase and actually making the purchase: Praise and positive reviews from other business owners, not vendor sales pitches, have the strongest influence on a business owner’s final purchase. According to the TAB survey, 46 percent of owners look to other colleagues in their field using the product or service to influence their decisions, 27 percent look to employees and only 10 percent choose the vendor.

Given the great emphasis placed on personal references, business-to-business vendors should develop an ardent referral group that is willing to share their testimonials with prospective clients. Charles Bonfiglio, CEO, president, and director of Tint World, LLC, provides ample opportunity for prospective franchise owners to speak with current owners. “Rather than giving them one size fits all, we give them one that’s been in business less than a year, one that’s been in business more than a year and a couple that have been in business several years. They can see over time how the owners are being treated from the beginning and over a long period.”

This trend is mirrored in the purchasing habits of the general consumer and continues to grow in importance as online shopping becomes more ubiquitous. The Nielsen Global Online Shopping Report published in 2010 indicated that more than half of consumers will not consider an electronic product without first consulting online reviews. Businesses in all sectors should be aware that the growth of customer reviews is a double-edged sword. Consumers with a negative product experience are more likely to share their negative review with others.

A negative review is a daunting prospect, but can be seen as an opportunity for growth. “If somebody’s had a bad experience, we want to hear about it because that’s how improvement takes place,” Drennen said. “We respond truthfully to a customer and try to better understand the issue. We would not make an effort to be defensive. We make more of an effort to understand the underlying cause and work on solving that for the customer.”

Creating a buyer experience and brand confidence are byproducts of emotional buying that work to the benefit of a vendor, but emotional buying can also work against sales. When a business owner finds himself in a money crunch because a key piece of equipment breaks down, emotional purchasing can cloud judgment.

Understanding cost of use vs. cost of acquisition

“We make a lot of penny wise and pound foolish decisions, because in the short-term, the cheapest equipment may look good for the bottom line,” King said. Accounting systems don’t always account for the opportunity cost of choosing one piece of equipment over another that may break down less often and provide more reliable service.

Vendors selling higher-end items costing more than the competition may find their products passed over in these scenarios, where emotions run high and logic is left behind. “A customer may think they are making an operationally good decision because they are reducing out-of-pocket cash, but they could also be reducing their future revenue stream should the savings today result in future downtime,” Drennen said.

Vendors need to help customers understand the cost of use versus the cost of acquisition. “The purchase price of a piece of equipment is only a portion of the decision. Customers should be looking at the product life, ease and cost of maintenance, and the energy to run the equipment,” Drennen said.

King compares the difficulty of these types of sales to that faced by the long-term health insurance industry and recommends the use of charts to demonstrate the added value one product may bring over the competition. Spending more money now will save the consumer in the long run.

Cutting through
the noise

Establishing confidence in your brand through a relationship with the customer will help guide customers back to your business in times of emotionally charged and urgent decision-making. Drennen works to remind people of the Cat Pump brand and brand promise by attending 14 to 16 trade shows a year and making sure information about the brand cuts through all the other noise on the market. “We have a philosophy here that you have to tell the market seven times in seven different ways… We look at our communication efforts as a continuous, ongoing process,” Drennen said. Drennen uses email newsletters, a Facebook page and YouTube videos to communicate with customers.

King takes communication a step further to hone its effectiveness and efficiency. “You don’t want to be broadcasting when you can be narrowcasting with social media,” King said.

She recommends conducting a study of your business’s best customers to help narrow the focus of your company’s communication and better understand the buyer’s value proposition. Create a profile of the customers who are most satisfied and successful with your product and then ask: How do I communicate to get more of these people? “This makes the advertising and communications job much easier, when you know who you’re talking to,” King said.

Knowing your customers, building relationships and identifying how buyer emotion comes into play when making a purchase will transform more shoppers
into buyers.