How a bank sold all its credit inventory without cutting rates, why customer inertia is your biggest competitor, and how to beat it to grow faster
How customer beliefs affect your brand's believability
One quote:
“Just because I am 55, live in this zip code, and have that income, it does not cause me to buy the New York Times today.” — Clayton Christensen, on why you shouldn’t market based on demographics
Customer Inertia
In the early 1970s, Fidelity Bank had a lot of money to lend.
But nobody was asking for a loan.
So they hired Ogilvy & Mather agency to make a new campaign.
Now, imagine you are an Ogilvy copywriter.
You have to write an ad to sell more loans.
But there is a problem.
All banks sell the same product.
The interests and conditions are more or less the same for all.
So how do you sell this thing?
They did something smart.
As the product was essentially the same, they decided to focus on customers.
Why do customers get loans?
To buy new stuff or handle an unexpected payment.
No useful insights here.
But why don’t they get loans even though the bank is ready to give them money?
Well, most people think they might get rejected — even when they are suitable for a loan.
People like buying stuff.
But they don’t like rejection.
So the anxiety of a potential rejection keeps them away from applying for a loan.
Ogilvy’s copywriters decided to focus the campaign on this anxiety.
If their advertising could reduce it, they could sell more.
After a few weeks of work, they came up with one of the simplest headlines in advertising history:
Here’s the funny thing.
Other banks also had money available for lending.
That’s what banks do — and everybody knows it.
But Ogilvy’s genius ad showed The Fidelity Bank was ready to lend money.
There was nothing to be anxious about.
Sure, the other banks also wanted to lend money to customers.
But they were talking about interest rates and conditions.
The Fidelity Bank said:
“Just come and ask for the money, we’ll give it to you.”
You know the result?
They lent all their capacity.
Why customer inertia can be your biggest competitor
The Fidelity Bank’s campaign is an interesting story.
But listen to this.
After analyzing 2.5 recorded sales conversations, Matthew Dixon and Ted McKenna found out that 40% to 60% of deals —including transactional and complex sales— end up with no decision.
So people look for a solution, they compare alternatives, and talk to them, yet they still don’t buy any.
Why?
Because they get paralyzed.
Sometimes because of anxiety about the new solution.
Sometimes because of the existing habits.
Bob Moesta formulized this in his book Demand-Side Sales as progress-making forces.
He says there are four forces that lead customers to make a decision on a purchase.
I’ll use a fat loss example to explain:
Push of the situation (+): Frustrations with the status quo (e.g. not liking yourself in the mirror or not fitting into your clothes)
Magnetism of the new solution (+): The benefits to be gained from the change (e.g. looking good, being healthy)
Habit of the present (-): The existing behaviors that created a comfort zone (e.g. consuming a lot of alcohol and sugar regularly, free time in the evenings instead of going to the gym)
Anxiety of the new solution (-): The anxiety comes from the cost/effort to change or a possible failure (e.g. the challenge to stick with a strict diet or “what if this training program doesn’t work”)
So what does that mean?
It means when the positive forces are not strong enough to beat the negative ones, inertia wins.
Customers continue business as usual.
And they don’t make a purchase.
So your brand doesn’t only compete with other brands — but also with customer inertia.
And to break inertia, you need to increase the positive forces and decrease the negative ones.
How?
Here are four ways:
1. See the world through customers’ eyes
Progress-making forces are based on one core idea.
Selling is about the customer’s life first.
What are customers trying to accomplish?
What are the moments that lead them to look for a solution (remember buying triggers)?
And why do (or don’t) they buy?
Once you see everything from their perspective, you can help them make that progress.
You can talk to their real needs with your marketing.
You can relieve their anxiety about the change.
And selling becomes easy.
So forget about your service, product, or offer for a second.
Find the real progress customers are trying to make beyond functional ones.
Sometimes people buy stuff to show their identity.
Sometimes they purchase a tool to stop listening to their direct reports complaining every week.
And sometimes they contract a service to have peace of mind.
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