Spending power and the power of spending

At a time when almost everyone is trying to spend as little as possible, it’s worth remembering why we do some of your spending in the first place. At its most basic level we need to exchange money for survival - payment for food and utilities - but even in these straitened times, there is still a lot of room for exchanging money for meaning. Spending is a power activity - the buyer has power in the form of money which they can deploy for the purposes of self-fulfilment. Every time we buy something that we want - as opposed to something we really need - we are using our spending power to get the item in question but also to get the power-of-spending ‘rush.’ When a customer emerges from Brown Thomas with a lipstick or a pair of cufflinks they may have gone in for a dress or a suit. They didn’t get what the item they wanted but they couldn’t leave without the rush so they opted for a consolation prize, a Match 4 instead of the jackpot. [Link]

Customers and Custom

Be careful to distinguish between customers and custom. Many companies describe their business in terms of market share. Market share, however, is a measure of custom rather than customers: a business that has 20% of the market may get business from 30% of customers in that market but because not all the customers buy the same brand every time, it averages out at 20%.

This is why promotions are not good at winning customers in any permanent sense: all they really do is let you bring the tide in towards your brand when you are promoting but leave you watching it go out to your competitors when their promotion starts.

Know That Your Consumer Knows You

Whenever we work on B2B projects we find that our clients are often surprised by how much their customers know about them - things like changes in ownership structure, or re-financing, or HR issues that the client assumes have been kept under the radar but, more often than not, are well-known by the customers. It’s worth remembering that these customers have a vested interest in the success of their suppliers. Good suppliers make their jobs easier and often make them look better in the eyes of their customers. So, apart from the very human interest in ‘shop talk’, your customers will want to keep an eye on you and maybe the best response is to keep your door open rather than pulling the curtains shut. [Link]