Practical Value in Marketing: Useful Products Sell

This article is an excerpt from the Shortform book guide to "Contagious" by Jonah Berger. Shortform has the world's best summaries and analyses of books you should be reading.

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What is practical value in marketing? How can you effectively provide value for your customers?

A key aspect of contagious products and ideas is that they are useful to the customer. You can add practical value to your product or idea by creating an amazing discount, or by providing useful information for your customers once they’ve brought your product.

Keep reading for more about practical value in marketing.

Provide Practical Value

The fifth attribute of contagious products or ideas is that they provide practical value—they’re useful in some way. People love gathering practical information that will make their lives easier. As such, customer value in marketing is something to consider. Most commonly, they like to collect information that will help them to complete tasks more quickly and easily, or information that will help them to save money.

Crucially, people also love sharing this information with other people. They do so because they want to help the people they care about. Therefore, if you make your product or service a source of practical value, people will talk about it because they’ll want to share its value with others. In short, you’ll generate word of mouth.

There are two ways to add practical value to your product or idea:

Create an amazing discount and apply it to your product. This will capitalize on people’s love of sharing money-saving tips.
Provide useful information to your customers once they’ve bought your product. For example, give them practical advice on a topic relevant to your product or service. Do so in an easy-to-share format like an email or a magazine so your customers can pass this information on to their loved ones.

Create an Amazing Discount

The first way to add practical value to your product or service is to give it an amazing discount. If your product or service is a real money-saver, people will want to tell their loved ones about it.

To make your discount truly amazing, there are four principles to keep in mind. First, make your discount big. People are more likely to tell their loved ones about a big discount than a small one because the former is perceived as much more helpful. Telling someone about a 5% discount won’t save them that much money. However, telling them about a 50% discount will help them to make a big saving.

Second, limit the availability of the discount. Make it scarce and exclusive. For example, create a discount that’s “store members only” or only available for a limited time. Scarce and exclusive discounts appear much more valuable to customers. People tend to think that a deal must be really good if a store limits access to it. Likewise, they’re more likely to tell other people about a discount that they think is valuable.

Third, apply the Rule of 100. This rule states that if a product’s original price is under $100, a percentage-based discount—for instance, 30% off—will appear more attractive to customers. Likewise, if a product’s original price is above $100, a numerical discount—for example, $50 off—will impress customers more. If you apply this rule when creating your discount, you can maximize its attractiveness and increase the likelihood that it’ll be shared.

Finally, make your discount obvious. For instance, put stickers on items to indicate to customers that they’re on sale. As you learned in Principle #4, things need to be publicly visible if people are going to share information about them. Discounts are no exception to this.

Provide Useful Information

Another thing to consider when focusing on customer value in marketing is the importance of information. In addition to creating an amazing discount, you can add practical value to your product or service by finding a way to provide useful information to your customers. Once they’ve engaged with your product or service, send them advice or practical tips that will make their life easier in some way. For example, if you’re a financial services company, send your customers a newsletter with money-saving tips. If you sell groceries, include a free healthy eating advice pamphlet with every purchase.

When your customers receive this information, they’ll pass it on to friends or family members who they think would benefit from it. In the process of doing so, they’ll inform other people that your company exists. They’ll spread word of mouth about your business.

Maximizing Information’s Sharing Potential

People are inundated with information every day. They probably receive multiple email newsletters, read dozens of articles and blogs, and get offered many free pamphlets. In this information-rich landscape, it’s easy for your offering to get lost in the crowd. You must make sure that your method of sharing information stands out—that people choose to absorb and share your practical tips, not those sent to them by your competitors and other businesses. Your information must be as engaging and shareable as possible.

One way to make your information shareable is to package it in a concise and accessible way. People respond better to short, snappy text, not something that’s going to take them a long time to comb through. Don’t send your customers a three-page essay filled to the brim with useful information. They won’t read it all, and if they don’t read it, they won’t share it. Even if they do battle through your wall of text, they’re not going to pass it on. They’ll be too worried about boring people and losing social currency.

Instead, limit the information you share to three or four simple yet engaging points. For example, send customers your four most effective money-saving tips, not every money-saving tip ever to exist. Likewise, make sure you make these points clear and streamlined. Don’t embed them in lots of exposition. People won’t take the time to comb through fluffy text to find the point of what you’ve sent them. They’ll quickly get bored and move on before they’ve had a chance to absorb and share your information.

The second way to make your information shareable is to ensure that it’s relevant to your target audience. Your customers aren’t going to read or share information if it doesn’t have any relevance to them or their loved ones. For example, if you’re a financial services company with a predominantly US-based clientele, there’s no point sending your customers information about the best bank accounts currently available in Germany. This information is very unlikely to be useful to your target audience or anyone they know. Keep your advice US-centric.

The final way to ensure that people share your information is to make it targeted, specific, and likely to appeal only to a set group of people. For example, don’t send out a newsletter that contains financial tips that anyone could implement. Send out targeted advice, such as tips specifically for people who are buying their first house.

This might seem counterintuitive. Surely information that’s relevant to lots of people will be shared more widely? However, Berger argues that just because someone can share the information with everyone they know doesn’t mean they will. In fact, he suggests people may be more inclined to share information that reminds them of just one other person. Because the information seems to be so uniquely suited to this individual, the customer feels like they just have to share it with them.

For instance, imagine you decide to target your financial services newsletter towards first-time buyers. When your customers receive the email, they’ll immediately think of any first-time buyers in their social circle. They’ll forward the newsletter to these people because it would seem silly not to. The information is incredibly useful to the first-time buyers and perfectly matches their situation. As you can see, considering customer value in marketing is essential for a compelling product or idea.

Practical Value in Marketing: Useful Products Sell