Customer knowledge affects sales strategy

One of the chief suspicions aroused in a customer when he’s sold to is, “What do they know that I don’t?” If the item is a bargain, it must have a defect. If it’s more costly, the seller’s trying to rip him off. With greater complexity and a higher cost comes higher suspicion. A car sale is more suspicious than a rummage sale. Companies have adopted ways to encourage customers to take the risk by offering money-back guarantees, warranties, and test drives, and. The seller has always had the knowledge advantage, but that’s changing.

Companies like CarMax have discovered customers engage with more information about their product (used vehicles) than ever before (Pink, pg. 59). They know if a car has been in an accident, they know what the going price is, how much wear-and-tear it ought to have, the common defects, and a host of other items which before they risked discovering after they’ve driven off with the car. Most people can identify with the knot of fear as they drive away with a used vehicle, their imagination whirling various worst-case scenarios and the snicker of the salesman. CarMax has embraced the shared knowledge by expecting and offering it freely in their offices. Their posture is to partner with the customer to find the right car, and they modify their sales strategy to accommodate this new method by supplying both their customers and their employees a different experience.

Companies who misjudge the information available to their customers won’t survive. A negative review can damage the possibility of future customers, while a lack of awareness in buyer’s interests can leave them peddling outdated wares with outmoded methods. A wise entrepreneur will glean what he can from yesterday’s methods but will incorporate the changing dynamics caused by the ubiquity of the Internet and mobile access via smartphones to modify his approach to customers.

When I purchased my first car, the salesman had me right where he wanted me. Out of fear of caveat emptor I bought a brand new vehicle when all I needed was a reliable, fuel efficient car that could make it over the Rockies. Pink’s stories about car sales hit home because I had been there. Nonetheless, I think Pink hasn’t noticed the next gulf between business and customer - data on the customer themselves.

While access to information has changed the way customers interact with businesses, other companies have found fresh new ways to gain an edge by gathering electronic data on customers. New forms of discrimination (granted, not all negative) are possible when I’m able to judge your reactions at a knee-jerk level from an unobtrusive camera, to determine the number of times you’ve entered my store, to find out how many children you have, what colors they prefer, where they live and what they like to eat (Borden). While caveat emptor may have originally meant, “What does the seller know about the product that I don’t know,” we’re entering a time when the phrase will mean, “What does the seller know about me that I don’t know.

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