Utility, Effort, and Sales

On April Fools' Day I published a rather tedious post that arrived at a conclusion that common sense should have yielded in the first place - that customers consider the benefit they will derive from a product (utility) in comparison to all the costs and tasks required (effort) to derive that utility in determining whether the purchase is desirable to them.  And further, the factors involved in assessing these qualities are non-quantifiable with any degree of precision.

The degree to which the utility and effort compare yields a general sense of the level of effort that will be required to sell a product to a customer.   I'd like to get a bit more granular about that correlation, though not quite as granular as before, to derive some general observations.

It is likely worth mentioning that this comparison deals with actualities rather than perceptions - the level of effort that is actually required and the amount of utility that will actually be derived as perceived by an informed and objective prospect - rather than the misconceptions a prospect may have, whether through his own delusion or a salesman's deception.   That is an entirely separate matter.

The Soft Sale: High Utility, Low Effort

Where a purchase proposes to offer high utility in exchange for a low level of effort, it is very appealing to the prospect by virtue of that comparison.  To sell such a product to the user often requires little more than making them aware of the item's availability because no further motivation is needed.

No further elaboration should be necessary here: the product that offers a lot for a little requires no salesmanship, and practically sells itself.

The Hard Sale: High Utility, High Effort

The hard sale occurs when the purchase proposes high utility but requires a high investment of effort.  In such instances, prospects are often indecisive, and will deliberate over whether the utility is actually as high as they believe it to be or whether their resources might be more efficiently directed to other utilities that come at a lower price.

A sale of this nature requires ethical hard-selling tactics (and it is necessary to mention ethics, as many hard-selling tactics are misused to make unethical sales, documented later) that involve convincing the prospect that the high value is worth the high effort, such that even when his perception of utility and effort are rectified (and not distorted) he will be willing to undertake the effort to obtain the value.

In other instances, it may require the salesman to address the proposition itself - to take practical measures to increase the utility or decrease the effort so that the balance shifts to a positive assessment.

The Impulse Sale: Low Utility, Low Effort

An impulse sale occurs when a purchase has little value to offer, but requires little effort to effect.   In general, customers are indifferent to these purchases: they are not very important, and there are likely better uses for capital and time, but they are "fair" propositions given that the effort-for-utility is balanced.

A sale of this nature generally requires making a proposition at the right time - when the prospect is unconcerned with more serious matters and is in a congenial enough mood to entertain the idea of taking a little effort to gain a little utility.

Arguably, adjusting the proposition to require less effort or deliver more utility can be effective in shifting the prospect's assessment - though it would likely be difficult to accomplish: because the effort is already perceived as low, making it marginally lower would be unlikely to succeed, and because the utility is low, making it marginally higher would also fail to have an adequate impact.

The Unethical Sale: Low Utility, High Effort

Customers are simply not inclined to enter into transactions in which the utility they receive is far outweighed by the effort required - this is a losing proposition and no marginal adjustment can overcome it.   It would, in fact, be highly unethical to attempt to sell a customer a product that offered him little benefit in comparison to its price ... not that ethics are much of an impediment for firms that think only to their own motives.

In such situations, a sale can only be effective if the prospect can be deceived or manipulated into grossly miscalculating the utility or effort involved.   There are tactics fro doing so, but I do not consider them worth exploring - as the only acceptable solution is to walk away: find a prospect for whom the product delivers genuine value, decrease the effort to match the existing low level of value, or improve the value of the product or service offering.

Idiosyncrasy

It likely needs to be considered that the assessment of utility and effort are highly idiosyncratic.  To apply these observations in an overly generalized manner is likely, and almost certainly, a mistake.   That is, a sales proposition for a given product does not have the same utility and effort for all customers in all situations, but must be approached with specific needs and circumstances of the customer in mind, aggregated into target markets that are well defined by their needs rather than by their demographic qualities (though demographics may correlate to a need).

A person's need for a product correlates to their need for a solution to a problem or their need to achieve an objective.   This will differ from person to person and time to time.   There is also the matter of the anticipation of need, which may derive from the unpleasant memory of a past event or the hope for a future event more so than the actual conditions of the realistic present.

This, however, would lead to a separate consideration in which general observations are even less applicable.