WOLFBITES - Issue 41

Introducing the law of marketing every small business owner must know

The words yes, no and maybe, representing the options for consumers, the topic of a marketing blog by Toronto copywriter Wolfgang Franke, who is also president of Words at Work, a Toronto ad agency offering video marketing, web marketing and social media marketing, plus freelance copywriting help.

Don't make another decision about your small business until you have taken the following quiz, created to test your knowledge of the one marketing law every small business owner must know.

When balancing the short and long term pain and gratification associated with a purchase that requires a deposit and follow up payments, what does the consumer prefer:

A) A high deposit with a schedule of follow-up payments that minimizes interest charges (lowest total cost).
B) A mid-level deposit with a schedule of follow-up payments that extends interest charges over a longer period (second highest total cost).

C) A low deposit with a schedule of follow-up payments that extends interest charges over the longest period (highest total cost).

Click here for answer


Consumers want immediate gratification (low deposit) and delayed pain (high follow up payments). They do not want the opposite. That's worth repeating. Consumers want immediate gratification (low deposit) and delayed pain (high follow up payments). They do not want the opposite.  

Even if a little short-term pain means significant long-term gain, consumers cannot resist the desire to get immediate gratification. This is why so many savvy marketers reduce the upfront cost of a purchase (Get a BMW with just $2500 down!). Less savvy marketers do just the opposite – they raise upfront costs with extra charges such as an initiation fee. That's a big mistake because cash strapped consumers are unable or uninterested in buying anything with a big upfront cost, but they will make a purchase with the same value if it involves a low upfront cost. 

A real-life example of the pain-gratification law of marketing

A few years back we were approached by a plastics manufacturer that had come up with a new one-step Christmas lights installment system. No more putting lights up in advance of the holiday season – and taking them down after the holidays. Instead, the lights would be concealed in a "light locker" that could be opened or closed, depending on the time of the year.  

There were two significant "long-term" potential benefits:

  • Hours of time savings in the years after the first installation
  • Fewer injuries and deaths from falls because home owners would spend much less time working at heights, particularly in the years after the product was installed 

The cost of production was low, but the clients argued that the price should be high because of the significant long-term benefits. I can still hear them saying, 'By year five, the cost benefit will be through the roof.' They then told me the price: $499. I asked them to reconsider, based on my concern that the target price was in direct violation of the pain-gratification law of marketing.

They responded that the price was not negotiable. I realized at this point that the client was about to become an x-client, but I made one last bid to save the day by suggesting the target audience be changed from home owners to retailers with multiple locations. They might be interested, I said, because the payback would be faster (installing lights on commercial buildings is not cheap) and they tend to think more long term. The clients said no – and became an x-client. Happens. 

About six months later my former clients showed up on the Dragon Den TV show promoting their light locker. Guess what? All but one of the dragons summarily rejected the concept because of the price point. "Nobody will pay that upfront cost," said one of the dragons wisely.   

And why was one dragon interested when all the others were not? He had a chain of retail locations and could see some opportunity to save on installation costs…

Wolfgang Franke is President & Creative Director of Words at Work Advertising & Marketing, a full service communications company established in 1988. Our growing list of valued clients are found throughout our local market, Markham and the Greater Toronto area, across Canada in cities such as London, Ontario, and Edmonton, Alberta, and an expanding list of international locations ranging from The Big Apple in New York to Kanturk, Ireland.

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Avoid the plague of equalism – treating all prospects and customers the same. They are not all the same. You need to identify your best prospects (and customers) – and then devote the majority of your resources to those targets. That's marketing planning.

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