Within the world of economics, “cost” refers to the idea that the true cost of an item is not just its price. The cost of an item, such as a vacation, is equal to not only the money that you spend on the vacation but also the wages that you miss out on at home. Wise digital marketers can use this economic principal in order to influence potential customers.
One of the most powerful ways to use this economic principal is by reversing it. Instead of emphasizing the cost of an item, use your campaigns to bring focus to the cost of not buying the item.
Marketing campaigns for courses, fitness programs, and other self improvement products use this method all of the time. Think about a campaign for a class that teaches a client how to become rich by learning how to flip real estate. The campaign might ask the client to imagine life twenty years down the road, if they do not invest in the course. The implication is that life will be the same. The client might still be stuck in a dead end job, struggling with lack of money, and dreaming about what could have been.
The cost of not investing is driven home. The buyer is no longer thinking about price, and giving away money. The picture is bigger, more emotional, and feels much more urgent to the buyer. Digital marketing campaigns that use this technique trigger emotional response that was not possible when the advertiser focused more on “price” than “cost”.
Another way to use the concept of cost, from an economic standpoint, is to think about the endpoint product or offer of service in terms of what the buyer is actually sacrificing. If you are marketing a product and feel that you have come up with a fair price, take a moment to think about the true cost.
Yes, three hundred dollars might seem like it would be a fair price for an event ticket, when you focus on price. A marketing campaign that tailors their offer to fit with true cost will connect with viewers at a much deeper level. For example, if the advertiser says, “We know you will be missing out on valuable sales while you are at our event, and will be spending more on food and lodging than you would if you stayed at home”, they will get their viewer’s attention.
The customer feels that the people selling the event really understand the situation accurately. The event campaign can go on to say “that is why we are including meals with your event tickets, and offering you proven ways to increase sales so that you will overcome any missed opportunities while you are here”, or something to that effect.
The marketing campaign should always address cost, not only price. This can be done by reversing the principle and addressing the cost of not buying, or through connecting to a customer by speaking directly about true cost. A marketing campaign that is based on economic principles has a better chance of succeeding. As economist Andrew Charlton has said that he and his team of advisors “feel quite strongly that independent and accurate economic analysis and independent strategic advice’ can help businesses succeed. Using the concept of “cost” is one way that economic understanding can contribute to business success.