Propensity is an inclination or natural tendency to behave in a particular way. For example, propensity to buy would be to say that most men living in Florida prefer to buy Ford trucks as opposed to GMC, Chevy, Dodge, or Toyota.
Here, the propensity to buy model is designed to tell which customers are ready to make their purchase so sellers can find whom to target. Having an idea who is ready to buy and who is not helps determine the right level of aggression in the offer.
For instance, consumers who are likely to buy will not need high discounts while others not likely to buy may need to be swayed with a zero interest rate and/or a rebate, thereby bringing in incremental revenue.
Shown in Figure 1, is Billy Fuccillo who owns more than 25 auto dealershipsbased out of New York. Fuccillo is huge on marketing. He has been blanketing Tampa, FL, running non-stop TV ads to promote a new Kia dealership in Wesley Chapel. People here follow his commercials, even if they don’t want to buy a new car.
Fuccillo, a huge guy, reaches out with arms spread wide and walks through TV commercials that run day and night, promising to give away cars. He stands on sales lots in sunglasses, bellowing about “huge!” deals and “huge!” savings. His commercials have spawned YouTube parodies.
Huge works because Fuccillo bets on consumers’ propensity to engage and convert. “And remember folks … Billy will do whatever he can to earn your business — huge discounts, huge inventory, huge trade-in allowances…” Gregarious or not, this promise is what gets people to call his telephone number, click on the website, and visit his dealershi
Targeted offers like a $300 payment on a new $55,000 car and a free HD TV, sound bar and DVD with any lease or purchase of new or used car help offset the relatively high cost of TV marketing.
There are also other propensity models.
Propensity to up-sell helps tell which customers are most likely to buy more at the time of purchase. Having an idea of this, helps determine whether to suggest a higher-end version or multiple of the same product at a better price.
There is also propensity to cross-sell, which helps tell which customers are more likely to buy a product that is usually bought with another specific item; and propensity to unsubscribe, which helps tell how likely a customer is to bolt from a loyalty or unlimited program.
Models like business plans are great but they are useless if they cannot be applied against day-to-day operations.
Consider how each of the washes shown above attempt to engage and convert consumers with street signage.
Bill’s offers assisted-services and promises to be simply the best. Rocket attempts to convert pass-by traffic into customers via the uniqueness of the world’s longest wash, whereas the third wash does so via low-price and added value.
These examples certainly aren’t “huge,” but they are more effective than a sign that simply reads Bubbles Car Wash.
Marketing experts say hugeness is achieved by appealing to the lowest common denominator in terms of product content. They say the pay-off comes from getting everyone possible to hear the advertising message.
The best place where ads get lots of looks is TV. However, people don’t want to watch the same old one-size-fits-all, plain-vanilla commercials. Perhaps this is why “huge” works so well.
Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at firstname.lastname@example.org.