Ronn Torossian is the CEO of New York Public Relations Firm, 5WPR. He is well regarded in the industry as an expert in the field of fashion PR.
In recent months the American department store chain, JC Penney, learned a strange and painful lesson. Their customers prefer the illusion of savings to actual savings. Those customers are surely not the only ones. But this case study provides a compelling insight into customer behavior that should instruct anyone interested in the fashion public relations field.
When the new “fair low price policy” was instituted, Penney’s customers immediately voted with their feet. Whether they were suspicious, freaked out or just didn’t want to think about the math – they were gone.
This left many wise, experienced and uber successful CEOs – including JC Penney’s new CEO who had instituted the policy – scratching their heads. Don’t people shop on price? If so, what gives?
Well, that is one part of the psychology. But there are many other reasons people buy. And the simple low price policy simply didn’t take that into account. So, why do people love sales and how can other retailers learn from Penney’s painful lesson? CEO of top NY PR Agency 5WPR, Ronn Torossian, has the answers.
#1 – People like the challenge
There is something chemical about finding a really awesome deal. Even if the deal is not really a deal at all, just a percentage off an overpriced item, it still triggers something in a dedicated shopper. We love that feeling, and Ronn Torossian says consumer PR specialists would be well served to keep that in mind.
#2 – People like the emotional buzz of success
Success can be a solo activity, and that feels pretty good. But, more often than not, dedicated bargain hunters LOVE to share their success. That makes getting a deal a social activity. It connects us and creates a feeling of communal joy (and perhaps a twinge of jealousy). These are strong emotions and create an even stronger feeling than just scoring the deal ever could. That’s why we share. To amplify this success, Ronn Torossian says PR agencies should make it a part of their PR campaigns to encourage consumers to share company success.
#3 – Perceived value matters more than actual value
When something is priced high and then offered at a discount, it has higher perceived value. Perceived value is, ironically, priceless in the consumer PR field. When people see two items, one priced $12 and one priced at $24 on sale for 50 percent off, the vast majority will not only pick the $24 item, they will take two. It’s on sale after all. Those same people would never buy the $12 item because “it is too cheap.”
Ronn Torossian said this situation should be a stark reminder to anyone in the consumer PR business that people buy for many reasons … and you ignore those reasons at your own peril.
For more information on Ronn Torossian and 5WPR, click here.