The Secret Recipe for Sales and Marketing Success
What Beanie Babies and Cash for Clunkers can teach you about selling cars
In the 1990s, Beanie Babies took the toy market by storm. Over the course of 10 years, Ty Warner went from being a midlevel executive at an existing toy company to becoming a billionaire entrepreneur.
How did he do it? What drew so many people to Beanie Babies and caused some of them to spend thousands of dollars or more per household on tiny stuffed animals with little to no actual value?
The answer is actually simpler than you might think. And although it may seem like a magic trick, there’s a scientific method behind this madness. You see, Warner achieved his success by mixing up what we like to call the “secret recipe” for marketing success. This secret recipe creates magnetic attraction and leverages sales. The best part? You can implement this same method in your own business.
Creating Scarcity, Believability, and Urgency
The secret recipe we’re talking about is creating a mixture of scarcity, believability, and urgency. When these three ingredients come together in any marketing effort, the effects are undeniable. Just look at how Ty Warner was able to leverage this method to create an explosive demand from adults and kids alike for tiny toys.
Warner started by creating a sense of scarcity around the small plush toys. Warner stumbled upon a way to create demand when he “retired” the animals after they spent a random, undisclosed amount of time on the market. Because he was initially toying with the designs of the animals, Warner accidentally created the first instance of a retired Beanie Baby when he discontinued an outdated design. Later, another Beanie Baby was retired due to a problem with a manufacturer.
These early instances of retiring discontinued models made the practice believable later when it became a regular occurrence. Soon Warner was purposely creating small batches of specific models to drive demand and increase value, but the shortages were believable because of the back story about the reasons for the retirements that Warner crafted.
By regularly retiring Beanie Babies, Warner generated demand by controlling how long each model would be available, peaking the public’s fascination. This scarcity led to a sense of urgency when Beanie Babies fans scrambled to complete their collections and win their favorite toys before they disappeared from the market.
As the fascination with Beanie Babies grew, the scarcity and urgency fueled bidding wars that slowly drove prices up from a mere $3.95 per doll to models that were worth from $3,000 to as much as $5,000, demonstrating that it is the inferred value of a product, not the inherent value, that sets the price. Keep in mind that all of the prices of these toys were completely arbitrary, based only on the public’s perceived value of them.
Applying the Recipe to Selling Cars
If Warner was able to use this combination of scarcity, urgency, and believability to make billions from small, bean-filled toys, you too can leverage similar techniques to create successful marketing of a more substantial product like a car or truck at your dealership.
A perfect example of using this technique in the car business is the government’s 2009 Cash for Clunkers program. Remember this program? If so, you remember the flood of customers and the bump in sales it brought to your dealership. Well, just like Ty Warner’s formula for Beanie Babies, Cash for Clunkers followed the secret recipe for marketing success.
Because the government backed it, it came with baked-in believability . . . not to mention the credibility of the president being the program’s spokesperson. That’s a double-whammy on the believability scale.
Initially, Cash for Clunkers was expected to last from July 1, 2009, to November 1, 2009, or when the $1 billion budget for the program was exhausted. The deadline and monetary allowance for the program added both a sense of scarcity and urgency. Even after Congress increased the allowance for the program to $3 billion, members of the public still responded to the notion that they might miss their chance to participate in the program.
The result? Cash for Clunkers exhausted the $3 billion dollar allowance on August 24, just 55 days after the program started, driving buyers who may have not even been looking for a car to purchase a new vehicle at breakneck speeds.
By employing these same techniques of creating a sense of scarcity, believability, and urgency in your advertising, you can recreate a similar barrage of customers to your dealership, the way Ty Warner’s and the Cash for Clunkers programs did for them.
Jimmy Vee and Travis Miller are the founders of Rich Dealers®, the nation’s leading experts on attracting customers, and the authors of Gravitational Marketing. Visit www.TrafficScale.com to request a complimentary Traffic Scale Report, which compares the quality of your traffic to other dealerships in your area and helps determine whether or not there’s potential business you’re missing out on. Use coupon code DMM1505.