Psychology of Consumer Spending

Before we go into the psychology of consumer spending, let’s take a look at the story of a salesperson’s experience working at an all in one department store.

One summer, a young man named Tom from North Dakota moves to Florida and goes to a big “everything under one roof” department store looking for a job.
Boss: “Do you have any sales experience?”

Tom: “Yeah. I was a vacuum salesman back in North Dakota.”
The boss was unsure about the boy’s capability, but he liked the kid and figured he’d give him a shot, so he gave him the job.
Boss: “You start tomorrow. I’ll come down after we close and see how you did.”

Tom’s first day on the job was rough, but he got through it. After the store was locked up, the boss came down to the sales floor.

Boss: “How many customers bought something from you today?”

Tom frowns and looks at the floor and mutters, “One”.

Boss: “Just one?!!? Our sales people average sales to 20 to 30 customers a day. That will have to change, and soon, if you’d like to continue your employment here. We have very strict standards for our sales force here in Florid . One sale a day might have been acceptable in North Dakota, but you’re not on the farm anymore, son.”

Tom took his beating, but continued to look at his shoes, so the boss felt bad for chewing him out on his first day. He asked (semi-sarcastically), “So, how much was your one sale for?”

The young man looks up at his boss and says “$101,237.65″.

The boss, astonished, says: “$101,237.65?!? What the heck did you sell?”

Tom says, “Well, first, I sold him some new fish hooks. Then I sold him a new fishing rod to go with his new hooks. Then I asked him where he was going fishing and he said down the coast, so I told him he was going to need a boat, so we went down to the boat department and I sold him a twin engine Chris Craft. Then he said he didn’t think his Honda Civic would pull it, so I took him down to the automotive department and sold him that 4×4 Expedition.”

The boss said: “A guy came in here to buy a fish hook and you sold him a boat and a TRUCK?”

Tom said: “No, the guy came in here to buy tampons for his wife, and I said, ‘Dude, your weekend’s shot, you should go fishing.’”

The above story is linked to today’s article as it shows the psychology of consumer spending and how they justify their spending.

The following infographic shows how consumers spend and how they justify their choices:

A good example of how consumers spend on items that they think they need is Daiso. Daiso works like the above scenario where a guy wanted to buy tampons but ended up getting more than he needed.

So how does Daiso do it?

1. They don’t sell their products directly
2. They understand consumers need for cheap products
3. They place their products strategically so that consumers think they will need the products

At Script Consultants, we don’t just edit or help you copyright, we delve deeper to look into what your clients want and need.

Sources:

http://www.dr4ward.com/dr4ward/2012/02/what-is-the-psychology-behind-consumer-spending-infographic.html

Written by: (www.script.com.sg) Edited & Illustrated by: Script Consultants Pte Ltd