Wednesday, March 4, 2015

THE BUYING BEHAVIOUR TRIANGLE THEORY - DO YOU BUY WITH YOUR BRAIN OR WITH YOUR HEART?


by Emmanuel Kuehn

Consumers are the same all over the world!
You might disagree with this statement, and argue that a Chinese consumer is totally different from an English one. However, consumers are human beings, regardless of their country of origin. In fact, outside of skin colour, language, and culture, there is absolutely no difference when it comes to consumer behaviour.

Let's begin by defining what are the keystones involved in the purchase process: the brain (the rational aspect), the heart (the emotional aspect), and the wallet (the financial aspect).

The brain asks: "Do I need that product?"
The heart asks: "Do I like that product?"
The wallet asks: "Can I afford to pay for that product, and is it worth the money?"

Those 3 components can be displayed in a form of a triangle entitled, "The Buying Triangle". At the top of an isosceles triangle is the brain. At the base on the left is the "wallet", and on the right is situated the heart.

So why is the statement "consumers are the same all over the world", true?

Look closely. They all have a brain, a heart and a wallet, in some form. What differentiates one consumer from another is the way these 3 key elements - brain, heart & wallet - interact with each other. Despite the variations, all three elements are clearly in play during the decision to purchase any product or service.

Traditionally, the brain operates like a control panel constantly evaluating, assessing situations, and behaviour. The mind and brain have been designed for this function. Nonetheless, we could argue that by thinking too much, some people struggle to make a decision. The situation becomes more complicated when other elements such as emotions (heart) and finances (wallet) are involved in the evaluation process.

The marketing "gurus" who build advertising campaigns try to play and manipulate these key elements. What counts most for strategists is to trigger the emotional side of each consumer's response nature. So, if you find yourself liking something, don't be surprised to find that your brain is struggling to convince your heart not to buy the product.

Price is also a key factor in the "struggle" or purchase decision. The price point needs to be "right" to get the consumer to commit.

Consumer durables are one thing. Now what happens when we consider luxury goods?

Clearly, the emotional element plays a significant role in the decision to buy. The purchase decision is based on the delivered emotional perception and value of the product. Rationally, if you need to buy a car, one car is as good as another in theory. Providing that the car is operational, any car will take you from place to place. Now, let's throw caution to the wind. What about acquiring the new Aston Martin Vanquish?

Emotional Decisions

People shell out a bundle for a big car splurge when it appeals to their passions and emotions. Certain car manufacturers build and design these cars with exactly this purpose in mind. A car becomes more than a vehicle for transport. It morphs into a dream machine of mechanized form of fantasy.

Emotion, sex appeal, and status definitely influence these type of high-touch purchase decisions. Emotional decisions are also predicated on notions of self-worth, self-identity, and reward and recognition.

IT Toys, Gizmos, & Laptops

Apple is another good example of a successful marketing machine. They do not just sell cutting edge products with an innovative design. They are providing us with visual and tactile stimulation. What is this? Another set finely honed emotional responses. The marketing strategists for Apple know how to play our emotions. They also know the utility of their products and when the messages are properly conveyed, they are able to generate "must have" purchase responses.

Are Mac products worth the investment? I think they are and so do many others. I am always impressed by the way they turn "want and desire" into "need".

The Impact Of Credit

The banking sector is another example of how marketing can shape the way we decide on financial services. In the "old" days, people put their savings into a checking and savings account to pay their bills and keep their money safe.

Credit however, represents big profits for the banking industry and no more so than the use of credit and bankcards. "Plastic Money" gives us the illusion that the money is not real and makes us feel that we have the power to spend more than we have. Most people today, do not settle their payments with cash. Previously, you could picture someone with a wallet full of bank notes. With each purchase the notes shrink and you are filled with a sense of "loss". Credit cards give you a different sensation. It is easier to spend money because it has become more imaginary in your mind.

Let's be honest, if we had to buy only with our brain and a wallet, we probably would buy and consume a lot less. Ultimately, we do not need very much to live and survive. Human nature however is always looking to acquire what it does not possess. More is never enough, and so to fill this emotional gap, we look to buy and consume more.

Price Tag Positioning

In retail outlets the position of the price tag in either the sleeve or clipped inside the garment, makes the consumer look for the "price". Examine now the engaged action. You have held the item in your hands. You have caressed the cashmere, and in your mind, the jumper is now part of your collection. Mentally you have bought the item before actual payment has been made.

Were the price up front and visible, would you react the same way? Perhaps? Or perhaps you would be more reflective on your purchase decision.

The only products with price tags at the front are bargains. The price tag is now used as a trigger to invite people to buy without considering need. "Bargains" are usually strategically placed at the entrance, acting as a magnet. Think of your local supermarket. Product placement is driven to get people to react quickly without thought and consideration. Even children are targeted with the positioning of sweets in front of the cashier. Temptation has been built into the retail experience.

The Evolution In Consumer Behaviour

Historically since World War II, Western economies have experienced a tsunami of products. Durability was once a hallmark before planned obsolescence became part of the business model. Remember, business is in business to sell. This means every time something is new, it is portrayed as better, more efficient, or more glamorous. You can quickly appreciate the draw of the "emotional" nature and power of effective advertising and marketing.

What do we do?

As committed consumers we buy more and more


Market shares in Western Europe are saturated and hard to increase. The credit crunch has also dampened spending.

So emerging markets such as Eastern Europe, China and India are the new targets to pick up the slack. They represent massive potential economic growth. These "new" consumers wish to be like their Western counterparts in terms of style and status. Their emotional side is open to be triggered and it works! They are buying more and more. Increased revenues and DPI have made this possible.

In the West, we have been told that unlimited credit was fine until the recent crisis. Emotionally we liked this proposition. No wonder why we have come to a situation where people could not afford to reimburse their debts. Inherent wisdom tells us to put the triangle back into balance. Finding the "right" compromise is necessary for emotional and financial stability.

Next time you find yourself in the midst of a buying scenario, pay attention to the complex triangle process. The next time you hesitate buying something, think first before you react.

The challenge is even bigger when couples buy products together. Most of the time, the man and the woman are not tuned to the same frequency. The sales person has to be smart enough to stimulate the party who hesitates.

So who's going to be the winner the next time you buy something?

Your brain or your heart?

Or will you simply connect both to buy wisely?

About The Author

Emmanuel Kuehn is a Management Consultant, Leadership Coach & Trainer for both corporate organizations and individuals.

Emmanuel Kuehn is a certified mBIT Coach (www.mbraining.com)

Business Is A Matter Of People
Emmanuel Kuehn | WisePoint B.V.

Friday, January 16, 2015

TRUST YOUR GUT! - INTUITION IS THE ULTIMATE NAVIGATION SYSTEM




by Emmanuel Kuehn

Imagine we are in the European summer holiday season, and August is when the most people take to the road. Given the state of highway infrastructure, driving is easy, roads well maintained and convenient. Unless you are going to a major tourist centre most of the interesting holiday locations are off the beaten path and require car transport.

When I grew up, it was more common to travel with a glove compartment full of Michelin maps. Today, travel has been drastically changed by technology and the use of "SatNav" (Satellite Navigation). This system is easy to use once properly installed. Human beings have taken to this technological aide like bream to seawater. Why is it that we place so much trust in electronic devices?

The problem with this relationship is our shift to dependency. Blind trust robs us of our freedom to make our own decisions or other choices. Putting our trust in high technology sounds logical, and so most us succumb.

In my view, over the last decade, we have become "dumb". We place too much trust in electronic devices. For example, recently, a woman on holiday vacationing in France called her travel assistance hotline after getting lost following the posted directions on SatNov. I know this sounds incredulous, but it is a true story.

The humour in the drama to me is self-evident. We have abrogated our power to make decisions. It almost seems that we have lost our instinct to know when something is right. Have we mislaid our instinct with the neglected roadmaps?

It seems we as though we have.

Let's talk about intuition. When was the last time you used your intuition and felt comfortable doing so?

Knowing how to use and rely on intuition takes some practice. It is as it were our natural internal guidance system. When it functions, it rarely let's us down. The more we use it allows us to build a reflex response to a multitude of issues. It is an excellent tool in the quiver of decision makers.

What I find peculiar is that many people are afraid of their own inner voice. Bad decisions lead people not to listen to their inner voice, and this failure cuts them off from the "universal intelligence"  that can guide us if we are open and if we listen and feel.

To follow the right path, requires directions.

Similarly to the "Tom-Tom", intuition guides us back on the right track. This happens even at the unconscious level.

The challenge for all of us is to learn how to trust our internal voice, which guides us. Why should we trust a "Tom-Tom" and not our own inner feelings?

In business, the most successful professionals are those leaders, who have come to rely on their intuition in the decision making process. Only bean counters rely just on the statistical data. A second benefit to harnessing your intuition in business and personal life is the power to exercise your judgment with a stroke of self-confidence.

Remember tools are just tools. It is how the tools are used, which makes the difference. I don't counsel abstinence in the use of tools, quite the contrary. Just understand that they are aids not solutions to the proper use of judgment. If you follow this advice, you will arrive at your destination and your intuition will blossom.

Have a great journey on the path of your own choosing.

Trust your Gut!


About The Author

Emmanuel Kuehn is a Management Consultant, Leadership Coach & Trainer for both corporate organizations and individuals.

"Business is a matter of People!"
Emmanuel Kuehn | WisePoint B.V.

Sunday, November 23, 2014

PLAYING THE GAME


by Emmanuel Kuehn
(The following article is Part 2 in a Special Report on "Innovation In Business")

Innovation in business to an entrepreneur is like a fish in seawater. It is a natural environment. A key risk to small entrepreneurs is when they focus too much on their own organizations.

Most entrepreneurs recognize the importance of vision sharing coupled to a global understanding of the economy on a macro-economic level. It is impossible to deny what others are doing even if you are a trailblazer aka Steve Jobs. He knows through the fire of experience what happens when a firm is too focused on itself, or considers itself as so unique that no one will bother to change to your platform even if it is stimulating and innovative. It is simply unrealistic not be aware of what happens in other competing organizations and on other continents.

New entrepreneurs tend to look at business through a "telescope" as I discussed in my previous article. Like Google Earth, an entrepreneur can zoom in and zoom out depending on the criteria.

Consider that although Google Earth enables viewers to zoom in close to your home with street finder it can never open your front door and highlight your leather club chairs positioned next to the fireplace. Entrepreneurship demands a double view whether in a small or medium sized structure. They have the reflexes to move quickly and adjust policies or products to perceived market changes or forces. This can only be accomplished when you have a "broad" strategic and organizational view.

Some of us hold the idea that large global corporations understand the impact of social media and the ramifications for their business practices. Oddly enough some do and others are still dragging their feet. Some get it like Google and take appropriate action, but even Google can overplay or underplay their hand. For example, the original founders are now back in the drivers seat taking the firm back to its "entrepreneurial" start-up origins by making the firm leaner and more efficient.

Google is in a better than most firms to exercise the microscopic and telescopic points of view regarding management strategy. After all, they are one of the firms, which have successfully shaken business in general to enter a "new" age of doing things.

To say that social media have transformed business practices and communications is an understatement. New media has given business an overview of what happens in global markets as well as the world at large.

It has not been my intention to criticize diverse approaches to running organizations. Rather it has been my desire to encourage managers to put more stress on a telescopic approach to market analysis and organizational management. Business is global in a way it has never been before and the challenges are relentless without end. No longer do we have time to take a "breather". We must consistently stay on top and this means building the right "mix".

In my view, the days of the large corporation are numbered. Organizations will forge alliances with suitable partners and keep their own streamlined and lean. Firms will further specialize and thus focus on their unique assets. Specialists can regroup under an umbrella organisation when they feel that that a "new" type of economy of scale can deliver added clout.

What remains to be seen is what I refer to as the human factor. Will partner players be empowered? How much shared ownership will there be? Right now the game is open. How do you want to play the "game"?

About The Author

Emmanuel Kuehn is a Management Consultant, Business Coach & Trainer for both corporate organizations and individuals.

"Business is a matter of People!"
Emmanuel Kuehn | WisePoint B.V.



Tuesday, November 11, 2014

THE NEW RULES OF INNOVATION IN BUSINESS MANAGEMENT



by Emmanuel Kuehn

I have got this pet theory of either looking at business through a microscope or a telescope. Before I kick off, let's first define the difference between these two engaging instruments and their usefulness.

A microscope has the power to take an object or policy and to scrutinize parts of the whole close up. It has the power to magnify. A telescope on the hand has the power to bring someone up close, but only something, which is far away and perhaps not visible to the naked human eye. Call this a type of global overview.

Now, let's apply this principle to business professionals. There are two kinds of people: One type enjoys examining minutiae and the small details. The other personality type enjoys looking at much bigger objects or projects from a distance in hopes of drawing the object or project closer for inspection. Both perspectives are valid and indeed, complimentary.

In business the close up snap shot is vital to root out problems. The other perspective relies on a establishing a helicopter point of view before delivering an analysis. Prior to the wave of social media and micro-management of branding and ideas, business ownership were perhaps more concerned or focused on their own organizations than a "global" market and its impact on operations and profitability. Multinationals grew to gigantic proportions across markets and in essence wound up replicating job functions across national or regional markets.

Control was portioned out according to the business practice and specialists were appointed to manage "their" practices in product development, marketing production, logistic, sales finance, IT and so forth.

The end result made the internal organization so complicated that even the senior management could not really control and command, let alone empower people in the decision making process.

This lead to large organizations calling in the McKinseys" of this world to conduct an audit of the organisation and to restructure its activities to be more cost effective and efficient.

These external trouble-shooters would look at the company from the inside by zooming in to more closely examine the details to get a better understanding of the situation. Management consulting exercised in this capacity is certainly the "microscopic" approach to orgainsational management analysis.

Senior management of the organisation would continue to view their firms through the lenses of their hired management consultants. The more complex an organisation, the more difficult it was to understand how it operated with awareness. Complexity clearly demanded closer scrutiny. The only problem here is that if you stare too long at details, you begin to forget the bigger picture. Both market environments and the competition move on whether your firm does or not. This can create an uncomfortable dilemma.

Recent business "history" has shown us what the consequences can be when this happens. Large firms disintegrate, break up or even disappear. The cliché, "too large to fail" comes immediately to mind.

The catalyst to further intensive change has clearly kicked in with the onslaught and continued growth of social media. Today, there is no or little "lag time". Results and changes take place in seconds. Procedures are on hyper-drive and this can also cause further confusion.

Spending too much time organizing and re-organizing a company internally using a microscope creates a huge gap between what the assets the company may have and the reality of the market potential and its requirements.

Since 2000, the market place has drastically changed. You do not need to be a rocket scientist or a Nobel Prize winner in economics to see this. "Mammoth" organizations were so complex that to survive, they were in a word forced to streamline their operations. This was done using the "proverbial" microscope to get deep within the company's structure and operational processes.

Some organizations, clearly suffered and others did manage to become more cost effective, in line with the market requirements. A quick analysis of the automobile industry in the USA will bring a few stirring case studies.

A remedy to these shortsighted strategies was forthcoming and it was when senior management recognized that to "win" an entrepreneurial mindset and action plan was obligatory. React fast, think globally and get a helicopter view of the situation. Here the "telescope" metaphor becomes more poignant.

Examining business organizations today compared to those ten years ago and you will see the forces, which propelled these shifts. Today's business is an interaction of people and companies. I like to think of this as a "web of satellites".

A company no longer acts as if it operated on an island. Inter-connectivity is the key and social networks have provided the fuel to accelerate these changes. Both the firm and its customers appreciate the added value above and below the line. Think of this as innovation in business management. This has become so important that these processes are now instituted within major business schools across the world at the graduate degree levels.

(The above article is Part 1 of a Special Report on the impact of innovation in the workplace.)


About The Author

Emmanuel Kuehn is a Management Consultant, Leadership Coach & Trainer for both corporate organizations and individuals.
"Business Iis a matter of People!"
Emmanuel Kuehn | WisePoint B.V.

Tuesday, October 14, 2014

SMILE AND THE WHOLE WORLD SMILES WITH YOU



by Emmanuel Kuehn
You have probably heard people saying that communication is all about action/reaction. When you look at somebody who is also laughing, you tend to laugh as well. Laughter is communications beyond language. The power of this type of communications defies logic, but it is so. Words can sometimes be superfluous.

People in business by definition tend to be primordially goal focused. When visiting customers, they concentrate on their sales targets rather than an emotive form of interaction. Although there is much to said about a "rational" tact, their emotional and intuitive sides get shunted aside so that there is no bond. I believe that this approach to business is a shame.

You may not perceive your client or colleague as a person with both thinking and emotional qualities, but they are. Both sides to the "relationship" are necessary to clinch any deal or beneficial understanding. If you don't engage, you risk underestimating the person's ability to "read" the situation. A misreading on your part could undermine an opportunity beneficial to you and your client.

Remember the key to sales is the first step, which is the "5 golden minutes". I have addressed this issue in previous posts. It is worth taking the time to establish a relationship with anyone with whom you come into contact. From my perspective and experience, I believe that it is the most important step of the entire sales process.

A cardinal mistake is to think that a deal is in the "bag". Emotional relationship building is fundamental. Why blame your "client" if your product is not sold?

With the right approach, you hold the reins to guide your meeting to a positive end and closure.

Let's examine one of the most common human responses. The act of "smiling". Smiling doesn't infer that you are silly or senile. It has a great power to transform any situation providing it is applied in the context of your environment. Every one reacts to human warmth. A "smile" can be worth a thousand words.

No need to follow any expensive sales trainings to practice this technique. No need to implement complex theories either. The business of forging workable relationships is not rocket science.

Do you find it that difficult to smile at someone?

For some of us who are hidebound this might be so. In principle however, it should not be. We smile regularly with friends and family. It is effortless. Why not in doing business?

The main reason could be that business people feel that business should be done in a serious way. The term "serious" should not be misread. I agree that business is not a place of entertainment like a circus.

Nonetheless, a dose of humor applied in the right manner allows for complicity and understanding. If humor is misused, it can clearly backfire. Don't be afraid of your emotions, but use them to a positive effect. Channel your personality do not stymie it. You can be serious and still show that you are human.

Is it possible to smile and at the same time being serious?

I have put this principle to work for years with positive results. So can you. Business can give much satisfaction when executed in a relaxed atmosphere. Why make the scenario more complex than it might already be?

Throughout my career, I have experienced the impact of a simple smile. Since any form of communication releases an action/reaction, the people with whom you share a smile are for the most part responding in kind. If they don't respond, no need to panic. At least you will be content with the effort.

Think of smiling as a free gift to share with others.

Not all scenarios are easy to navigate, I grant you this. For example, I once had to attend a meeting with four buyers who were not "user friendly". In fact, they took great pleasure in making the sales person feel terribly small.

When entered the room, I felt like a soldier in front of a military tribunal. The best response to that was to put a smile on my face. I kept smiling at them and realized they were slowly becoming "nicer", more human. Eventually, they defrosted.

Ultimately, we reached a stage in our communications where there was a shift so we could address each other as equals.

I guess my smile was strong enough to let them see that, although I fully respected their position and power that I was not impressed their initial game of intimidation. If a meeting goes nowhere, everyone looses. By the end, their attitudes shifted and they let go of their masks. Even they felt a sign of relief. I must add that although I did not make a sale, I succeeded in changing their behaviour, which was no mean feat.

In conclusion, I would like to share with you the following anonymous poem I stumbled upon and well describes the impact of smiling:

Smiling is infectious; you catch it like the flu.
When someone smiled at me today, I started smiling too.
I passed around the corner and someone saw my grin.
When he smiled, I'd realized I'd passed it on to him.
I thought about that smile then I realized its worth,
A single smile, just like mine could travel round the earth.
So if you feel a smile begin, don't leave it undetected.
Let's start and epidemic quick, and get the world infected!
Everyone needs to SMILE!!

(Author: anonymous)


About The Author

Emmanuel Kuehn is a Management Consultant, Business Coach & Trainer for both corporate organizations and individuals.

Business Is A Matter Of People
Emmanuel Kuehn | WisePoint B.V.