Category: Increase Sales

How to Re-Anchor Your Client’s Willingness to Pay

Johannes WinterhalterLeave a comment on How to Re-Anchor Your Client’s Willingness to Pay

and how to avoid leaving money on the table.

When we think about ordering a service and have some information about offers and a clear picture what we want, we have a Latitude of Acceptance of prices in mind. WTP is Willingness to pay for a service or product, and we may need to re-anchor the frame.

Price confidence is not about believing in your value; it’s about having the data to prove the client’s risk is greater than your fee.

Re-Anchor Your Client's WTP to Avoid Leaving Money on the Table -use the Assimilation-Contrast Theory

The Problem: Weak Anchors

As we discussed, most clients default to weak, external anchors:

  • Competitor Prices (External Anchor): Easy to find, but instantly anchors the WTP low, leading to sub-optimal pricing.
  • Trade Association Guidelines (External Anchor): Provides safety, but ignores the consultant’s unique value and capacity.
  • What the client paid for similar projects before (Internal Anchor)

These weak anchors by clients result in an unknown Willingness-to-Buy (WTB) and fear of the Pricing Whiplash on the suppliers side – a wild haggling with prices without foundation. This is if an originally called price is too high or too low, and the seller needs to recalibrate his prices without changing the offer fast. This is the fastest way to loose clients trust.

The Cost of Not Buying, Anchoring It and Sharing It

We may focus on the Cost-of-not buying. When we have this, we have the strongest argument we can get. The latitude of acceptance for the client is drawn by the clients’share of the CoNB. Fortunately identifying the CoNB is not rocket science. I do not want to go into details there because it differs between for example lawyers, hairdressers, graphic designers, coaches and real estate agents.

How Pushy E-Mail-Marketing Destroys Trust

Johannes WinterhalterLeave a comment on How Pushy E-Mail-Marketing Destroys Trust

There is a fundamental flaw in common recipes for E-Mail marketing that destroys trust.
Many E-Mail-Marketing services suggest sending a cadence of 8-12 emails until the customer finally buys.
What if the recipient bought the product just before and does not need one more for months or years? Or just does not need the offered product right now or has a good relationship to another supplier?

If an enterprise whose product I’m not interested in sends me 8-12 emails, I mark them as spam and never buy anything from them. They are marked as pushy spammers and have actively destroyed their capital: Trust.

The Misalignment of Funnels

: The reason companies send 8–12 emails is because they are using a Commodity Sales Funnel (high volume/push) for a product that is often not a commodity (their unique service). The assumption is that low frequency equals lack of interest in selling on the sellers side.

For me, as a Strategic Analyst, constant “hammering” is not marketing—it is a destruction of capital.
The cost of that friction is paid by the marketer: I and many others hit unsubscribe or adjust my spam filter. The company spent money to acquire my address and then sent messages that actively drove me away.
They paid a Cost of Friction that was higher than the value of the potential sale. The Expert’s Rule:
You cannot build a high-value relationship with low-value tactics. If your solution is not a commodity for daily use, your sales funnel shouldn’t be either. You must attract, not hammer.

What Your Spreadsheet Can’t Tell You: The Hidden Financial Value of Human Conversation

Johannes WinterhalterLeave a comment on What Your Spreadsheet Can’t Tell You: The Hidden Financial Value of Human Conversation

If a customer walks out of your store without buying, looking at the security camera footage won’t tell you why. You can analyze the video (Data) all day, but you will never know if they left because the price was too high, or because the music was too loud.

To find out, you have to run out to the parking lot and ask them.

In the corporate world, we rely heavily on ‘Security Camera’ data—web tracking, AI analysis, and big spreadsheets. These tools are excellent at telling us what happened. But they are terrible at telling us why.

Here is why the most profitable companies still invest in human conversations, and how you can use them to fix your pricing strategy.

AI is a Mirror, Not a Window. AI can only tell you what customers have said in the past. It cannot tell you what they would pay for a new, innovative product. That requires a human “Store Owner” intuition.

The store owner talked to people – he or she never missed the value of human conversation.

How to make qualitative interviews worth the effort

Qualitative Interviews done by a good interviewer who makes the interviewees talk in the right direction gives direct access to the thoughts of our clients and target groups. This includes thoughts which do not exist in a written language.

The Cost of Not Knowing

Compare the 300 € interview cost to the cost of launching a product with the wrong price. “Is it expensive to pay 300 € to find out your customers would have paid 20% more? No. That 300 € just made you 20.000 €.

This additional publicity pays for a part of the survey. The other one is additional sales following an improved strategy.

Stupid interviewers are a no-go

For best quality of interviews the interviewer has to dive into the world of the interviewed person. The interviewer has to direct the interview and add questions if necessary. This requires a lot of experience and knowledge for the interviewer. Hiring a random person without knowledge is the first step to disaster. Less experienced interviewers need the first interviews in a project for training, experienced interviewers do not need that. They can relate to previous experiences

References

This article is based on about 20 years experience with qualitative interviews and the usage of some form of artificial intelligence since 1992.

From 1,000s of Views to 0 Sales:

Johannes WinterhalterLeave a comment on From 1,000s of Views to 0 Sales:

My $200 Marketing Mistake and the Lesson That Redefined My Consulting” or “Why ‘High Traffic’ Can Be a Useless Metric: A Case Study on Targeting ‘Doers’ vs. ‘Dreamers’

I use this as a simple example for something much bigger: a year ago, I launched a promoted post for an article I had written. I spent a modest budget on Facebook… The results came in: thousands of views, plenty of clicks. I was thrilled. Then I checked my sales dashboard: Zero. Nothing.

The article was a philosophical piece... It was perfect for attracting an audience I call ‘Dreamers’—people who enjoy thinking about business in the abstract.”

But my service isn’t for Dreamers. It’s for ‘Doers’—founders, entrepreneurs, and managers who need to make a decision now. It is about finding the target group.

I thought publicising a philosophical piece of text will help my brand and so elevate my sales. It did not – there were many people who like my way of thinking, but hardly any of them needed my service. The connection trom the philosophical article to my services in market value, marketing ROI and brand value calculations and research was not present for the readers, or they did not need it.

How This “Failure” Makes Me a Better Consultant

“This experience is why I am so passionate about data-driven validation. Before my clients spend a single euro on ads, it is important to ask the tough, practical questions that separate ‘Dreamers’ from ‘Doers’:

  • The Message Test: Is my content speaking to the person who thinks about the problem, or the person who pays to solve it?
  • The Alignment Test: Does my Call to Action (CTA) on this post align perfectly with the service I’m selling?
  • The Market Test (The ‘Doer’ Question): Have I calculated my Serviceable Addressable Market (SAM)? Do I actually know how many people are in my target niche and what their potential value is?
  • The Metric Test: Am I measuring the right thing? (Stop tracking ‘Views’ and start tracking ‘Qualified Leads’).”

The market test is not expensive – see my order page. You, the reader, might even do it yourself and decide if you want professional assistance. Most successful campaigns are the result of contributions of multiple persons:

  • The business owner or Chief Marketing Officer
  • The consultant helping defining the target group and messaging with the help of AI
  • The responsive clients who help developing strategy and product by answering questions
  • The designers who do the final graphic appearance

Lets start it and find the marketing mistake.

Searching the Marketing Mistake
Measuring water depths does not necessarely help with marketing mistakes.

Recommendation Network or Artificial Intelligence in Sales – which one has warmer Leads?

Johannes WinterhalterLeave a comment on Recommendation Network or Artificial Intelligence in Sales – which one has warmer Leads?

We are looking for people and organizations with a web presence or at least a listing in Facebook, Linkedin or some municipial business directories. AI cannot find others.

Recommendation networks – do they have qualified leads?

The power of recommendation marketing lies in its ability to effortlessly drive sales when a product aligns with a broad audience, eliminating the need to vet leads. Personal referrals, customer reviews, and influencer endorsements pave the way for seamless transactions without added complexities.

Ideally the other members of your recommendation network are looking for customers for their network and are warming up leads before. The prospect expects to be contacted when the seller reaches out.

This is an ideal setup. In practice most recommended leads are not warm, sometimes it is required to hire service people with bad quality just to please the guy who gave the recommendation.

However, the flip side emerges when the product caters to a niche market or appeals to a limited segment of potential buyers. In such cases, relying on recommendation marketing with personal endorsements can result in frustration. Vendors like myself may find themselves inundated with unqualified inquiries, while those offering recommendations witness their efforts to connect buyers and sellers go unrewarded, whether in commissions or praise.

AI is more than just talking about AI – Artificial intelligence in sales

How it is supposed to be:
Professionals in this area use AI-powered tools to personalize customer experiences, optimize marketing campaigns, and predict sales trends. They understand how to leverage AI for tasks such as customer segmentation, lead scoring, and content creation. A creative mindset combined with an analytical approach is key to suc
The reality:
Many of the ones selling products claiming to be AI-powered tools do not use AI for their own outreach to prospects. So it stays less personal, the approached clients get annoyed. AI applied correctly helps finding the ones who are open for the products.

AI is really good in finding information about prospects – it can read and digest complete web presences in less than a second. So just use it.

How to find investment opportunities that combine getting rich and being a good person?

Johannes Winterhalter

This article is about finding good investment opportunities, getting at least a little rich and being benefactor for society. Reading this article the spirit of Adam Smith, the author of Wealth of the Nations 250 years ago, may be with us.

An investment opportunity is supposed to give us gains and make us happy this way. Posession can satisfy: we are proud of having a part of this enterprise or owning some of these krypto-currencies. If it is possible to make the buyer also happy the world is becoming a better place.

Example: I buy an house for one million Euro. Two years later I sell it for 1.5 million Euro. I enjoy the gain, my buyer enjoys the beautiful he got for his money. Everbody is happy.

I calculated risks and gains and put money on real investment chances, which are a net worth for society. The worth of housing in general did elevate, and my gains are part of that. The house I sold has increased in value, the reason being the higher price the buyer paid,

Another way is to become active, found a business and calculate the perceived earnings per customer

Becoming millionaire with 10 € starting investment in 17 years

Many people got rich with less. For example, starting with 10 € which double themselves every year creates 1.31 million € after only 17 years.

No organism grows continuously over an indefinite time. So the growth will stop after some time. Or the investor looses interest, takes the money and moves to a hurricane-ridden Caribic island to satisfy other human needs and wishes there.

Benefitting society and becoming a little rich is possible

Is there anything in the world I can improve and I get a share of the money created from the use of the thing? This applies even for the ones who make us happy with their videos on tiktok or YouTube. Marc Zuckerberg created Facebook and got rich with that. He forced  competitors out of business. His solution worked better and therefore he had more users and more advertising.

Let’s talk about a investor called Robert. He likes to sell and buy real estate or shares on real estate. Also he wants to contribute to modernization of energy supply. At this moment he has about 50.000 € available. Also he is thinking about selling natural dogfood online. He read that this can be a nice sidejob with little investment.

At first Robert is confused of the many good and bad investment opportunities. What does need to free his entrepreneurial spirit?

From an economical view, getting rich also means to benefit society. People buy things which are useful for them. The entrepreneur provides these goods and services and keeps a part of the revenue.

To find an easy way full of fun to success Robert has to consider the following:

1. What he likes to do

2. What others like him to do

3. What he think he likes to do ( notice the difference to #1 – this is about self-reception)

4. What Robert believes others want to buy from or the enterprise he bought a share

5. The limits of his environment – the world is bigger than the area he can take notice of

6. The hard numbers – is there really a big market for the products?

7. Where he can really improve the perceived life situation of others.

What is the next step?, Ok, consulting me or another business coach/consultant looks good. Some can discuss the matters with mentors and friends, who are good in business, others do better with paid assistance.

After having a free mind without barriers from culture and family background, there is a chance to see the next big thing, for you and society.

The real important steps are:

#7 is the most important thing: this is your working next best thing.

For researching #4 and #6 I am a good fit. I have a lot of data for calculating your market and possible success.

Robert looks for a good way to invest his money and having control about his money

Separating good investments from bad investments is similar to start an own business. Robert has to look at point 4 to 7 of the previous paragraph and do the analysis. If all goes well, he wants to buy. Thats it – buy after best possible analysis and wait for earnings. The investments have to be checked regularly and maybe sold at the right time.

More Success in Price Negotiations With Decision Tree

Johannes Winterhalter

Going into price negotiations without a lot of preliminary information mostly ends up in suboptimal results. This post is about structuring in the information in a decision tree stuffed with probabilities for the events. These probabilities are the result of market research.

The party with the most information has advantages in negotiations. They know the negotiation scope of the other side and th bargaining power do both sides. Other questios are: What do I want? How to avoid getting lost in bargaining? After looking into auctions, where for psychological reasons it is difficult to make rational decisions, I look at the decision tree with estimated earnings and probabilities.

Auctions – the risc of following the group

Auctions are popular for antiques, used items and real estate. In the bidding war the offers may run away while the auctionator counts highet and higher. This war requires at least two bidders. Participants see and hear competitors bid higher and higher and infect one another. The bidding continues, so the race goes on for not having a defeat. Giving up means the object is gone. Due to the short decision-making period and the group, spontaneous decisions are made, which be confirmed experimentally. As soon as the bid is accepted, the bidder goes back to his rational normal and recalculates: the high purchase price makes the investment unprofitable. The buyer tries to get out of the contract. This phenomenon occurs less often if a security deposit to be presented limits the bids.

How a decision tree helps

We try to look at every possible scenario and calculate the probability of that scenario. The example is about a freelance teacher, who applies for teaching a class. How much money will she get?

decision tree usable for price negotiation – probabiliy and earnings

Sandra is applying to be a lecturer at the Montgomery Training Center. She has no experience and is pretty much broke right now, so she urgently needs paid work, her lower limit is 20 euros an hour. But she wants to achieve the maximum possible hourly rate in order to look good in front of her friends and colleagues and to earn money.

Sandra negotiantes with the dean, Ms. Dr. Teufel. She wants more earnings for the school and save money spent on teacher salaries. If teachers are scarce or one has special qualifications, she can pay up to 40 euros per hour. She tells the applicants that there are lecturers who work almost on a voluntary basis. So it tests their price scope downwards. That the training center also hires expensive lecturers is not for the appliants ears.

Doing background research helps

Sandra asks herself how much she could ask. She estimates that the school can spend up to 50% of the participiants fees for lecturers salaries[2] . The difficult question about the income of the training center can be answered with the help of price lists of the company, sales figures from the Federal Gazette (corporations have to publish there), inquired or estimated numbers of participants. Sandra does the math and comes to a maximum of 40 € per hour.

Sandra analyzes her competition. What is the likelihood that another qualified person will do it cheaper? This is very high when teaching in university cities. Public statistics on wage levels can help, or a survey among friends. Industry associations often have fee statistics. She heard from friends that they often only pay 25 euros per lesson. So what to do in the price negotiations?

Price Negotiations and Background Research: Add Probabilities to the decision tree and play with scenarios

The probability that a sufficiently qualified applicant appears charging only charges 25 euros per hour is 50%. Let’s figure out whether Sandra should play it safe and demand 25 euros per hour or whether it is worth asking 40 euros per hour. The contract lasts for 200 hours, i.e. 5000 euros at 25 euros per hour and 8000 euros at 40 euros per hour.

Sandra realizes that she still doesn’t know enough about the lecturer market. What is the probability that in the case of a rejection by Dr. Teufel, a new job of the same type appears that brings in at least € 40 an hour? It is not possible to ask the competition, they will hardly tell the truth. Miss Dr. The devil is also talking about volunteering, so no wages at all.

Looking at the decision tree: if demanding 25 € per hour Sandra has the job safe and gets 5000 Euros. Demanding 40 € there is a 50% chance that she will earn 8000 Euro and 50% that she needs to go cleaning houses for 12,50 Euro each hour, that makes 2500 €. In addition and weighted by probability this goes to 5250 €, slightly more than talking about the low price.

External Factors – Prestige and Feeling Safe

Sandra possibly thinks she definitely needs the teaching job. She no longer wants to clean and needs references. Then she plays safe and only charges 25 € per hour. Demanding high prices is only worthwhile to a limited extent, as the previous analysis shows. The opportunity costs in the form of stressed nerves can be an argument for low claims.[3]
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  1. [2] To know this average value, information about the business model of the schools is necessary. The basis is the commercial calculation with cost price, handling costs – and profit surcharge and sales price. The lecturer’s fee is the cost price, the remuneration paid by the participants per lesson is the sales price. The trading surcharge includes rooms, advertising, administration and risk. [3]
  2. [3] Between 2008 to 2010 I did some tests with groups of 30 participants about that subject. The results were that very young people tend to ask too little money, older people tend to ask too much in price negotiations for work.