Why your customers don’t want what they need
- Do the people you serve really want what they need?
- If you provide a product or service you know they need, will they buy it?
- And, by the way, did you get gloves and socks for Christmas?
It’s the first week of a new year and up and down my street, overflowing trash dumpsters stand at the curb in silent witness to the psychology of our wants and needs.
Let’s wind things back to a Christmas about 50 years ago. Under the tree is a long box – with my name on it – containing a Lionel Wabash Cannonball electric train set. It’s my equivalent of Ralphie’s “official Red Ryder, carbine action, 200-shot, range model air rifle.” Except there was no risk of shooting my eye out
Also under the tree was a small, soft package from my grandparents containing a new pair of tan knit gloves with reinforced fingers and palms. In my mind, I neither needed nor wanted them.
To understand that gift, you have to understand my grandparents. They were born poor by today’s standards and raised their children during the Great Depression. Basic needs, such as shoes and gloves, were treasured. Electric trains couldn’t prevent frostbite on a cold winter’s walk to school.
A life of hard times taught them a different lesson of needs vs. wants. Today I understand my grandparents. I love and appreciate their care for me. But, the holiday boxes spilling from my dumpster today show I live a different definition of needs vs. wants.
In economics, a classic definition is that “wants” are things we desire while “needs” are what we must have to survive.
Let’s focus on the word “desire.” Merriam-Webster tells us the word means “to long or hope for : exhibit or feel desire for.” In short, desire is an emotion.
The economics definition of need – what it takes to remain alive – is starkly unemotional. At its most basic level, it includes food, water, heat, shelter. However, it becomes frighteningly emotional when access to those basic needs is threatened.
And that leads us to a discussion I had this week with a group of leaders with a great deal of experience in the retirement industry. Their concern and mine is that many who desperately need to engage in retirement planning fail to do so.
Why does this critical need fail to drive want: The desire to take self-benefitting action?
After more than 15 years of working to engage plan participants, I’m confident there is no single answer to this question. But, I’ve seen data that points to one possible explanation related to my grandparents and the hard times they lived through.
In one study, more than 11 percent of plan participants always struggled to pay for basic expenses. Another nearly 25 percent frequently struggled with basic expenses.
First, I’ve led research that found that those with more income and money in retirement savings tend to be more engaged in retirement planning. Perhaps not a big surprise.
Significantly, however, a study I led two years ago found more than 11 percent of plan participants always struggle to pay for basic expenses. Another nearly 25 percent in that plan frequently struggle with basic expenses.
Who did we find struggle the most?
- Couples with middle/high school age children
- Singles with middle/high school age children
- Singles with young children
A reasonable conclusion is that providing essential needs such as groceries, clothing, and shelter takes all the money and emotional energy available for the third of plan participants that struggle financially.
The struggling third is the same group that may benefit most from retirement and financial education. Yet, facing the potential for a painful retirement in the distant future is outweighed by the present reality of day-to-day survival.
While this study focused on retirement, I suspect we can apply this to those who forgo basic health and dental care to keep the lights on and milk in the refrigerator.
So, let’s revisit the questions we asked at the top.
Do the people you serve really want what they need?
The data suggest you should first seek to understand the diversity of “need” from their perspective. My grandparents understood my need to be gloves and shoes. I experience a need – perhaps just a want – for faster Internet speeds.
Who do you serve? Does one strategy to meet their needs reach them all?
If you provide a product or service you know they need, will they buy it?
To buy something, I’m asking you to reallocate your time or money to meet a need you have come to believe is more than important than other things.
If those you serve have more funds and time, they may have easier choices.
Are you serving the third who live on the financial edge? How can you make your product or service relevant, urgent, and affordable to those experiencing life as a day-to-day struggle?
I’m convinced we can help both the affluent and working poor in our retirement plans. As a plan administrator or consultant, do you see this as an urgent need or an unnecessary want?
Interested in making a difference? Contact me. Our participants need us to make a difference.
