I hate snakes! It is primordial. I hate them for no other reason than I do. You couldn’t give me enough money to walk in woods known to have snakes. I would go to jail rather than obey a government rule that says I have to walk down a path where I can see snakes.
My fear of snakes is akin to the challenge businesses face as the economy begins to reopen during this coronavirus pandemic. Will customers shop if they fear of getting the coronavirus? The issue of fear cuts to the core of behavioral economics and how businesses can grow sales.
The pre-coronavirus marketing 101 path to winning customers and growing sales begins with building a business culture where the customer is always right. Which, of course, is not true. But having a business culture where saying “yes” is the expected outcome is a huge competitive advantage. Amazon’s innovation of offering free delivery and no-questions-asked returns is a great example. Now the race to winning customers by saying yes revolves around whether a business offers same-day delivery or pick up.
Price bargains is another proven path to growing product sales. Customers love bargains. In behavioral economics terms nothing sells like the thrill of winning. A price discount thrills a customer because it makes them feel like a winner. It is a proven psychological path to getting consumers to buy more (two for one!) and to buy impulse products because their discounted prices are just too low to resist.
But neither the immediacy of product acquisition or promotional pricing will grow sales if customers are too fearful to shop. In such an economy the only path to growing sales is through building authentic trust. I have held a snake because I had authentic trust that it was not poisonous and the person handing me the snake was authentic in telling me the snake would not bite me.
Right now, Walmart is grabbing market share because they were deemed essential by government decree. The result is a crushing of small businesses.
But Walmart’s Achilles heel is that their stores are not bastions of authentic trust. I shop at Walmart. I do so because they are open. But every time I shop there I believe I am endangering my life. I feel that way because I do not see them successfully implementing these in-store key steps for containing the spread of coronavirus:
1. Universal wearing of face masks by customers and work associates
2. Hand sanitizer at all contact points like shopping carts and check out
3. Enforced social distancing
4. Engaged work associates focused on my safety.
As our economy re-opens I am now seeing small businesses realizing their competitive advantage against big box stores is their ability to execute an attention to the details that overcome consumer fears. Today, this may be small businesses’ only hope for survival. If they win by assuaging consumers fears then they will win back market share.
My dentist is an example. They text me to announce that they are reopening. They also sent me an email outlining their step by step procedures for ensuring my protection. The email’s call to action was a request that I be in touch to discuss making appointment. On the phone, the dentist’s administrative assistant was well prepared to answer my questions. She eased me into a September appointment. Her closing statement was something like, “No worries, you can always cancel if a coronavirus second wave occurs.” She shared that they are experiencing really strong customer demand for appointments.
The lesson learned is that winning consumers’ trust based on authentic and transparent health protective actions is now the new foundation for winning customers and growing sales.