How to Create Greater Demand for Your Products or Services!
The first step in creating greater demand for your products and services is to change how your product or service is perceived by your target market. Creating the public awareness of your product or service may take a little creativity on your part. Changing your approach will in turn change how your product or service is perceived by the general public and specifically your target market. Many years ago I heard a story that illustrates this point perfectly.
Create Greater Demand by Limiting Supply
In a rural area outside a large city, a farmer and his wife had three puppies that were ready to go to new homes. The very smart woman rang up the paper with the largest readership in the big city and placed a for sale ad. “Three adorable puppies for sale by appointment only.” As people called to make their appointments the very smart farmers’ wife scheduled all the appointments for the same day at the same time.
As the line of cars of city folk began to arrive they formed a line out the drive and down the street. Then at the appointed time she let in only one person at a time to look at the puppies. The people in the line began to wonder if there would be any puppies left by the time it was their turn. As the demand for the puppies became greater than the supply every puppy became very desirable. In less than an hour all the puppies had new loving homes. The people arrived thinking that they would be able to select the pick of the litter. Their perspective changed as other potential buyers also arrived and the demand for the limited number of puppies increased. Now each of the puppies became the pick of the litter. Part of creating greater demand for your products or services is innovation.
Create Greater Demand by Innovative Selling
As we are all aware the real estate market can fluctuate greatly and at times can be challenging, especially if you are a broker or a seller. That is unless you know how to be innovative. Barbara Corcoran tells how in the early 1990’s the bottom fell out of the real estate market in New York city. Barbara was getting ready to announce the closing of her real estate company when a large developer called her and asked her to appraise a group of eighty eight apartments in six different buildings on the Upper East and West Sides of the city.
The buildings had been on the market for a number of years. The developer and his investment partners had a $50 million mortgage on the buildings, making each apartment’s monthly maintenance fee 40 percent higher than the rest of the market. Buyers were also having a hard time finding financing (sound familiar?). The lack of financing combined with the high maintenance fees had made the apartments nearly impossible to sell. If that wasn’t enough, real estate values in general had dropped nearly 40 percent and many of the apartments needed repairs or renovations.
What seemed like an impossible task, Barbara turned into an innovative opportunity to create greater demand. She first explained her idea to the developer, then to the underwriting bankers, next to the lead lender on the project, and finally to the majority investor. With everyone on board, Barbara set about the work of preparing for the sale of the apartments. First she enlisted the help of two of her staff members. Next, she set about re-pricing all of the units. She added up all the asking prices of each of the units, and then divided that amount by the number of units in all of the buildings. Then she deducted 10 percent for the amount that the buyer would normally negotiate off the price anyway. All units went for the same price no matter what floor it was on, view or no view, new kitchen or old. Then she did her best to remove any objection a buyer might have. There was no board approval needed. One of the larger banks with a big stake in the properties agreed to provide mortgages to the buyers. Finally, there would be no maintenance fees for the next two years. She had included those fees already in the selling price.
Next, Barbara pulled out a custom made rubber stamp and brought it down with a sound thump on one of the eighty eight prepared contracts. The stamped clause gave the buyer two weeks to consult their attorney and return the contract for a full refund of their deposit. She called a meeting of all her sales staff and announced that they had eighty eight apartments to sell in six buildings in the Upper East and West Sides and that they were going to sell them all in one day.All studios would be sold for $49,000, all one bedrooms would sell for $99,500, and any two bedroom unit would be sold for $165,500. Then she did something very clever. She refused to give the addresses of the buildings to her sales staff. She told them that this sale would not be open to everyone and it would not be advertised. The address and unit numbers would be revealed only on the morning of the sale.
Barbara asked that her staff tell “only your very best customers and of course your families”. The sale would be limited to one per customer and on a first come- first served basis, and start at 9:00 am sharp! Two weeks before the sale she “added a little fuel to the fire” and quietly and confidentially expressed her concern to a few well chosen staff members that she was concerned that there might not be enough apartments to go around. A very innovative way to create greater demand is to also convey it to your sales staff.When the morning of the sale finally came Barbara was shocked to see a crowd of buyers outside of her office that stretched to the end of the block. The line had started at 4:00 am that morning and by opening at 8:30 am there were hundreds of potential buyers eager to get an apartment.
As promised at 9:00 am sharp a list of the apartments and an attached map with the unit number and address clearly marked were handed out. Starting at the front of the crowd and working their way back the staff members handed out the information. Once a buyer had made their choice, signed the contract, and left a deposit the property was immediately taken off the market. Buyers were urged to have several choices when they returned to the office in case their first choice had already been taken. It was organized mayhem. Some buyers worked in pairs comparing units in different buildings over cell phones. One buyer flew in from Paris to buy a one bedroom unit, sight unseen, on the highest floor in a building six blocks away from Barbara’s office after camping out on the sidewalk since 4:00 am that morning.
Barbara had started out that day with eighty eight apartments that no one had been able to sell in over three years and her own company near bankruptcy. At the end of that same day all eighty eight units were sold to happy new owners and Barbara and her sales staff had netted over a million dollars in sales commissions. Her innovative thinking allowed her to sell the unsellable and save her company which she later sold in 2001 for $70 million.
Create Greater Demand by Triggering Emotional Response
This last example I want to share with you is not only an example of creativity and innovative thinking, but also tenacity. “When the going gets tough, the tough get going”. Sometimes dealing with the competition can be difficult especially when it seems like you are in a David and Goliath situation. This last story is about how to turn the odds in your favor and come out a winner.
In a large metropolitan city two developers were building two large multipurpose towers. Commercial space on the bottom floors and luxury residential space on the upper floors. One was a new residential tower over a prestigious landmark building with a very fashionable address. The developer had publicly promised unlimited funds to build the finest building in all of the city and had hired one of the most talented and well known architects around. This building held all the promise of being a huge success.The second developer had achieved some success, but had yet to build the reputation and status of the first developer. He also had gotten a later start on his project than the first developer and was on a set budget.
Seeing that he would need to turn the odds in his favor to make his project a success, the second developer made a crucial decision. He chose to be very creative in the interior design of the atrium of his building so that it invoked a positive emotional response from all who came into the building. Where the first developer hung a wonderful collection of fine art on the interior walls of his atrium, the second developer created an atrium that was art in and of itself. He used a color palette that was unheard of in the commercial building world, but one that is commonly known to relax and uplift at the same time. The main entry was made twice as wide as was required by city code creating a welcoming and grand entrance into the main lobby and atrium. This same developer added a sense of luxury and drama by bringing in an eight story waterfall. Only the finest craftsmen were hired. Then he made one more crucial choice.
Create Greater Demand by Understanding the Needs of Your Target Market
The second developer began to think like the people he hoped would move into his building.
- How would they live?
- What would their daily lives be like?
- What is it that they would need or want on a regular basis?
Once the second developer answered these questions he quickly set about to make some important changes in his building. Instead of the usual two to three stories of retail space he created six and had his sales team bring the finest retailers, restaurateurs, and service providers from around the globe. Ultimately, a person or family living in this building would never need to leave unless they chose to. This innovative thinking created a building that was thoroughly modern, luxurious, and a positive emotional experience in the common areas of the building. The residents of such a fine building would typically engage their own interior designer anyway to personalize their apartments, so the second developer spent the bulk of his budget creating a functioning work of art in the common areas of the building.
Then the unthinkable happened. The local and national economy began to falter. In an effort to attract more buyers for the apartments in his building the developer of the first building began to drop his prices. He had the prestige, the location, the budget, and the reputation. The building was beautiful. It also had a co-op board that could pick and choose who could move into the building, a very unsavory thing in my mind. Many of the apartments sat like empty shells.As the first developer struggled to fill his building, the creative and innovative second developer with the tenacity of a bull dog did the completely unexpected. He actually raised the prices on his units. That’s right, he raised the prices. You see, he also knew his market. People who could afford to live in his building wanted the best, not the best bargain.
If you were raising your prices that meant the desire for your product, in this case luxury apartments, must be in great demand. If you were raising prices in a down economy and real estate market, they must be truly spectacular and in limited supply! This created an urgency amongst the second developers core clientele and within just a very short time the building was a financial and social success. Every time the demand for the apartments increased, so did the prices which only added to the mystique. All names of potential clients were put on a “waiting list” and then were contacted later as an apartment “became available”.
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