Home > Consumer Behavior > Luxury vs. Necessity

Luxury vs. Necessity

Do you sell a necessity (need to have) or a luxury (nice to have) and how does knowing the difference impact your sales and/or marketing efforts? - by Community Mailbox
I don't know what I sell, here you tell me... Now I'm asking you, Sir, what one thing, more than any other, determines your standard of living? Most of us would probably say "My Earned Income" Would you consider that accurate?

Would you find it unusual then, that when we don't properly plan for our families welfare, that the money necessary usually comes from their standard of living?


When we die, its out survivors who pays the price if we're not prepared. When we're disabled, we pay the price along with them.

Do you or have you made any arrangements to protect the one thing that pays for the things we pay for?

A disability can affect our standard of living. If we require care, whether skilled, or especially unskilled, if the disability is chronic, Long Term Care can destroy all we've worked for. Do we want to sacrifice the hard earned dollars we've accumulated as wealth, or would you consider in effect, taking out an estate preservation loan instead?

At age 50 the cost a Long Term Care Contract, our theoretical or so called loan, is about .4% per year. Is $175 month worth a million bucks to you?

Life Insurance. A lifetime of coverage will also cost you less than 1 1/4% annually at age 50. The nice thing about Life Insurance is that it pays cash immediately. The nice thing about life insurance is that there is no taxes. No income taxes, no capital gains. You don't have take opportunity cash out of circulation to pay for estate settlement costs when you have life insurance.

Where would care to start our conversation? The Luxury of preserving our families standard of living and Quality of Life, or the necessity of it?

Aloha...... shds; ;bg - by rattus58
When you deal in consumer items you usually sell both.

What I mean dear sales readers is simple; if I work at a Mercedes Benz dealership ... there is both the Smart Car and several luxury vehicle models to choose from too. Now if you work at a Ferrari dealership this example may not apply but for most the option exists to up-sell and down-sell.

If you sell time sharing on private jets, for certain it is all luxury. In my case I sell an item that saves money and reduces green house gas emissions too. Most would say it was a luxury I think - if we did a poll. Whereas I know it as a necessity - one that everyone will understand once the price of energy reaches what Europe already pays!

Perception is reality.

Poverty consciousness will cause many buyers not to buy value, they buy price. They think the more expensive item is luxury when, it often is not (exception; buying a NAME).

Quite often the more expensive item costs less in the long run (EXAMPLE; High Efficiency Furnace). The same item that the majority would suggest was luxury if polled could, for example, produce a much lower cost per BTU. Go figure.

Food for thought. - by Gold Calling
How does knowing the difference impact your sales and/or marketing efforts? - by Community Mailbox
Well in my case, the only luxury items I think I sell might be Muzzleloaders and grandkids and in that case, I think you're given more latitude, or at least I take more liberties. I'll get to parents/grandparents and life insurance also in a minute.

For me, selling a necessity for 90% of my clientele falls into competition for other of life's necessities as well and the emphasis is clearly different, where I am focused mostly on making sure that we get the mostest for what we're comfortable with spending to preserve a standard of living. Selling a luxury is making the most of the standard of living we're already enjoying.

A standard of living we enjoy = X number of dollars. The closer our income comes to X, the harder the job is for me to protect it. If income = X+ or Y, the more Y exceeds X the easier it is to protect that standard of living and ASSURE its future. From there, it's easy to approach a parent or grandparent and suggest that the future of their kids TODAY may completely depend upon what WE do today to give them ADVANTAGE. This besides the moral side of things, demands MONEY. I'm here to help them spend it on the things that they usually love most.

When I'm selling a Muzzleloader, or an Annuity or Life Insurance Policy on a Grandchild, I'm competing with golf and bridge... or sailing... so to speak.

I'll spend the money on a luxury, where I'm allocating funds on a necessity.

Aloha... Tom... if all that makes sense....shds; ;bg - by rattus58
Do you sell a necessity (need to have) or a luxury (nice to have) and how does knowing the difference impact your sales and/or marketing efforts?
I don't think the categories break down into lururies vs. necessities as much as we might think.

I believe it breaks down into selling luxuries/necessities vs. ideas.

Selling luxuries is not a very different process than selling necessities---in both cases the prospect wants what he/she wants.

When selling an idea, i.e., introducing a marketing or advertising venue to a business, you have initially to identify the prospects goals rather than the features and benefits that they think they want out of a necessity or luxury. - by Ace Coldiron
I'm doing some work with a premier electric power generation company as a guest of the Broker that "owns" this account.

I happened to have my Life, Disability, Accident and Cancer plans with me for no particular reason, but as I sat down with one of my employees and asked him if he had any particular interest in the 5 products we are offering... Term Life, Universal Life, Critical Illness with Cancer, Accident and Long Term Care, he indicated that the Accident Plan was what he wanted. Good deal... done deal...

I spotted my Life Insurance Policy and asked him if he had any permanent Life Insurance? No I don't, we have this great plan with the company, and they do. Me... to him "you know, you ought to get some Universal Life coverage while you can for two reasons... 1) I'm here. 2) Here check this out... you see what my monthly premiums are ($417) for $150,000? Let's see what $100,000 would be and you can go up or down and have a feel for premium... $100,000 = $68.00 a month for this gentleman...

So I asked him you know when you wait, it'll cost you about $300 a month for $100,000, for what you can get for $68 now. I spend $300 a month you'd spend $68... tell me, does my beneficiary get any more money than yours would for $68? No... Can I have something less? Of course... $50,000 would be $34, would that work? "Go for it"... Alright... !!

Lesson.. I re-learned something that checkout clerks have known for ages.... Is there anything else I can help you with... a magazine, gum, candy... a Soda for the ride home... do you need batteries... flashlight for your keychain... etc.

So... what do you think has happened with the rest I saw .... yup... and yup... :)

For all you youngsters out there as well.... If you don't have insurance, do it now, later is no bargain and doesn't serve your family as well as doing it now does for you. Anything age related and it will ALWAYS beat out the alternaitives.

Ask for the upgrade.. not related to luxury or necessity purely maybe, but if you've the extra cash and you give your family extra money, a luxury today might be a necessity later...

Off topic... but aloha... :cool: - by rattus58
"Luxuries" and "necessities" are nebulous terms and don't matter much. What is one person's "luxury" is another person's necessity. Using these terms forces all purchases into one of the two categories, and in many cases, this is an exercise that results in frustration.

Most of what people buy are not necessities. Few of us bought the least expensive home we could buy. Few of us buy the least expensive of anything to get buy.

What is more important to understand than these nebulous terms is understanding the full range of customer's needs and desires on a macro level and a micro level. Understanding these needs gives us great insight into the buying motivations of our prospects and the buying potential of these prospects, too. - by Skip Anderson
Seth Godin's short blog post about marketing in a recession touches on consumer perception and the stories we tell ourselves when buying this or that. Understanding how the stories change for a product/service (ie; a necessity become a luxury) might prompt you to change your sales and/or marketing efforts.

"The challenge for marketers is to figure out how to change the story they are living so that their customers can change the story they tell themselves. What you make, where you make it, who makes it, how it's priced and sold and ... it all adds up to a perception. If you change these elements the story will change too." - http://sethgodin.typepad.com/seths_blog/2008/02/marketing-in-a.html - by Community Mailbox
I don't think the categories break down into lururies vs. necessities as much as we might think.

I believe it breaks down into selling luxuries/necessities vs. ideas.

Selling luxuries is not a very different process than selling necessities---in both cases the prospect wants what he/she wants.

When selling an idea, i.e., introducing a marketing or advertising venue to a business, you have initially to identify the prospects goals rather than the features and benefits that they think they want out of a necessity or luxury.
According to studies in symbolism, we never buy the "thing." Rather, every sale is selling an idea and only an idea without exception. All objects function as a "prop" to be used on our personal stage of life to express our unique drama of meaning.

Knowing if a prospect is looking to buy a luxury or to fulfill a perceived desire or need is very important in how you language your opening, middle, and especially the close. After all the meaning has shifted.

How many of us have up-sold our products? That is, the prospect explains he or she is looking for a car between 25K-30K but the sales rep moves up to the 30K to 37K group. The prospects begin to hesitate. The sales rep can no longer talk about how practical the car is because for that prospect it is not.

At this point, the prospect is trying to reason through leaving the safely of "thinking practical" and moving into the area of "personal reward" or luxury. This area is fraught with questionable self-worth issues.

To make this social climb often requires the sales rep to begin using language of "deserving" and leaving the more "pragmatic" approach.

Finally, research also shows that given any perceived "need" (necessity) upon analysis, it will always be reduced to a single primary need. This primary need is the criteria for our belief system and sense of personal self over time. All other "needs" are illusions falling under want or desire.

For seasoned sales reps such as yourself, there may not be a noticeable difference. Luxuries/necessities, can become melded together because he or she is so unconsciously competent the move in and out of various categories are blurred beneath natural thinking processes.

(As an experienced driver, we think about where we are going but no longer need to think about the act of driving even though there are many aspects occurring at once.)

Finally, it is also suggested that luxuries and perceived "necessities" come from the same single true need of personal expression but must be addressed separately for best results. - by John Voris
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