So your product or service was passed over for a competitor’s? Good news: New research tells us the fight’s not over yet.
As marketers or sellers, we often give the proverbial 110% when trying to land new customers or keep our current customers. Countless campaigns and methods lead customers down a “path of purchase” or help them navigate a “customer journey.” But all too often, there’s a step on that path or journey that sellers and marketers ignore – the “not this time” (NTT) step.
We can relate to NTT in our everyday lives. It can be a decision as simple as buying Crest toothpaste versus Colgate, or as complex as purchasing a Toyota versus a Honda. While making NTT decisions, we subconsciously know there will be another opportunity to purchase the forgone alternative. It’s time for marketers to leverage that knowledge and opportunity, too.
Prior research studies have shown that after a customer makes a selection, their perceived value for the foregone alternative decreases while the option they chose increases. So naturally, in our car A vs. car B example, if you were car A and a customer passed you up for car B, you may feel that all’s lost with that customer and that your product is permanently devalued. But that’s not the case.
A recent research article by Zachary Arens and Rebecca Hamilton published in the Journal of Consumer Psychology adds hope for brands that were passed over in favor of a competitor. In summary, the study offers proof that as a customer reaches a sense of “consumption completion,” the value of the foregone alternative will rebound back to its initial valuation.
For marketers, there are three key takeaways:
Takeaway #1: A customer lost to the competition isn’t forever lost
It absolutely makes sense to market to customers who have selected a competitor’s product. For rapidly consumed products, that means marketing to them all the time. This includes restaurants, cosmetics and personal care items, cleaning products, etc. Per Arens & Hamilton, “consumers should be more receptive to promotions recommending their forgone alternatives after they had consulted their chosen alternative.” So when a customer abandons their shopping cart full of dish soap, keep reminding them every week or month to come back and buy it.
Takeaway #2: Timing really is everything
The timing of your communication should align with the estimated consumption completion of the competitor’s product. Some examples of this timing include:
- Lease termination date
- Cellular contracts
- Proliferation of new styles in clothing
- Serviceable end date on major appliances
- Seasonal services/items (e.g., Thanksgiving turkeys)
Once you’ve determined a customer has foregone your product by choosing a competitor’s, enter them into a program that will promote your offering to them at the appropriate consumption completion time. Solutions like Watson Campaign Automation can use dates as triggers and decision points to move customers through a series of reminder messages
Takeaway #3: Create a sense of closure for the customer and competitor
In your messaging, create the consumption completion reality for them. As Arens & Hamilton explain, “consumption closure reflects and internal, psychological state of completion rather than an external state.” Tell them they’re done with the competitor’s product. Get them to acknowledge and accept consumption completion. Instead of “Your Lease is Expiring,” use “It’s Time For a New Lease.” One statement infers we’re at the tail end of the consumption period. The other proclaims it’s already over.
Some industries already leverage NTT marketing programs (see auto-lease conquests), but many more should adopt these programs as well. Of course, further studies need to be done for subscription-type services such as Dollar Shave Club, print magazines and auto-renewed B2B SaaS software. For these types of products and services, there are micro-consumption events (e.g., using up your monthly allotment of razors). There are also the long-term contacts that customers may feel are yet to be consumed. As marketers, we need to explore what can be done in these industries and create new best practices.
 Zachary G. Arens, Rebecca W. Hamilton, The rebound of the forgone alternative, Journal of Consumer Psychology, Volume 27, Issue 3, July 2017, Pages 318-332