How could thousands of Americans experience this bizarre situation every day? And what can we learn from it? It's simple really. The power of peanuts is about the power of context in every purchase decision.
Frankly, flying is horrible. After subjecting ourselves to humiliating security measures, we wait alongside hundreds of similarly irritated people to be herded onto a claustrophobic flying tin can. For hours, we sit uncomfortably close to strangers, enduring strange smells, droning noise and the constant cough of that pale, sweaty guy across the aisle. And we'll pay hundreds of dollars for the awful experience.
In a situation like this, when the purchase occasion is mostly negative and the customer doesn't feel as if he can do anything about it, incidentals like snacks and beverages become monumentally important to sales. These small, seemingly insignificant interactions provide opportunities to create differentiation and increase customer retention. Southwest Airlines, famous for inexpensive, on-time flights, always goes one step farther to make these small interactions just a little bit better. Whether it's having fun with the safety lecture, offering more than one drink or giving extra peanuts if requested, Southwest takes advantage of the stuff that matters in the context of the flight and enjoys higher customer loyalty because of it.
No matter what your industry, customers come to you with certain expectations established by the purchase context you create. Consider movie theaters. When someone decides to go to the theater, it is almost always a positive event. He or she is looking forward to being entertained, spending time with loved ones and munching on salt and sugar. Once the customer walks in the door, he leaves the real world and enters an enclosed system supported by artificial scarcity. So he will shell out $16 per ticket, $8 for a Coke and another $9 for nachos. He knows they're overpriced, but he doesn't want to miss the previews, plus he wants his loved ones to be happy, he's feeling a little care-free, and he deserves to splurge a little.
Things really get weird, however, when he or she goes grocery shopping the next day and brings along a handful of 49-cent coupons. Suddenly every penny counts.
To understand your business' customer-purchase context, ask yourself these fundamental questions:
In what context are our customers purchasing our product? Is it positive? Negative? Overwhelming? Rushed? Enjoyable?
What expectations do we set for our customers? What expectations do we fail to meet?
What are the main customer touch points along our customer life cycle? Where are we excellent? Where can we improve?
Are we looking for opportunities to innovate?
Do our offerings support our overarching brand strategy?
A shopper may think nothing of adding a $49 warranty to a $600 TV purchase. But ask the same person to spend an extra 25 cents on the dollar menu, and she may look elsewhere. In the same way, your customer's context shifts the moment he or she walks in your door. So ask yourself, are you taking advantage of the power of peanuts?