Marginal utility is probably not what you think of when you think of marketing, you probably don’t even know what the term means. Which is fine. I didn’t either until a few days ago.But it’s a principle you operate your life and your business on
But it’s a principle you operate your life and your business on every day without even really realizing it. And it’s the reason your customers buy from you (or don’t).
So, let’s start with a definition.
What is Marginal Utility?
Marginal utility is an economic theory that essentially states that the value of something is determined by the incrementally consumed unit, one human choice at a time. It was discovered in the 1870’s and proceeded to overturn most of the economic thought of the day. In short, it was an insight into how humans make choices that could change the world.
Prior to the idea of marginal utility, economists were baffled trying to understand the total value of something in terms of its value to society. Things like water were a mystery. Water is extremely valuable at least in terms of survival, everyone needs it and wants it, and yet it’s extremely inexpensive compared to other things like diamonds which are basically useless.
This is where marginal utility sorts things out, “sort” being the operable word. It basically says that everyone has a ranking in their head, all the time. When presented with a choice, all the possibilities are stacked and ranked in order of importance, and inevitably the option on top wins out.
We don’t make choices based on the broader perceptions of the world on the options presented to us, we make them based off an unbelievably nuanced and complex set of personal preferences and experiences.
How does Marginal Utility play out?
Take your typical customer as an example.
They may really want to play Magic at your shop tonight. But playing Magic is one of many possible choices they could make tonight. They could also study for an upcoming test, take their significant someone out on a date, play Hearthstone at home, walk their dog, go to the gym, call their parents, and a nearly infinite number of other things that are competing for that top spot.
But they can only choose one option, so whatever is on top will win out. If this hypothetical customer decides to go on a date tonight instead of playing Magic, it doesn’t mean that they think Magic is a bad choice, just that the special someone is a better one. And that’s what makes marginal utility important, it shows that the world is not a place of black and white, good and bad, but actually a world of subtlety and personal choice.
And this is where your marketing comes in.
Getting to the top of the rankings
It’s your job as the game store owner to make your store’s offerings are enticing enough that it takes that number one spot in your customer’s mind. This is why social media is part of the foundation for many modern businesses today.
As game store owners, we should be taking our cue from the movie and theater industry. Games occupy a similar spot in the leisure activity mind space as movies do and theaters face the same challenges of convincing customers to go see a movie on a Friday night. A popular night of the week to do any number of things.
Movie trailers, interviews, and magazine articles are all part of the effort that the movie industry puts in to move “buying a ticket to the movies” to the number one priority spot of their customer’s hierarchy of desires. So how can you use this information?
It’s really simple, actually.
Social media platforms like Facebook, Instagram, and YouTube have given every business a place to broadcast their message for free. Take advantage of this fact. You may not be able to produce studio quality video but you can still get out your smartphone and create a solid video that showcases you, your brand, and your business.
You don’t need a script, or great lighting, or any special equipment. You just need to have an idea about what to talk about and then actually create something. Games are fundamentally social activities, so be social.
Talk about the games you sell.
Talk to your customers.
Talk about the latest collection you picked up.
Talk about the breaking news in the community.
Talk about something, take some pictures, record some video, and put it online.
Use the tools that are at your fingertips and in your pocket and start talking to your potential customers about your business. Often times it’s just a matter of reminding someone about the awesome new game that was released this week to tip the mental scales in your favor and get the customer through your doors.