Grasp Profits from Enjoyment of Crafting

In my tale for today’s post, a man possessing fine aesthetic tastes comes across a distinctive handmade vase at a craft fair. He locates the artist to express his admiration and present a special request. “I’d like to purchase two more which look just like that one to give to friends. How much would it be for the three?”
     The artist thinks for a bit, then replies, “You saw that I want $75 for the vase that’s there. My price for the second one would be $100 and for the third one, $150.”
     “I don’t understand,” says the man. “Why would you charge me more for the copies?”
     “It’s because when I make duplicates, it changes the joy of craftsmanship into the burden of toil,” explains the artist.
     An explanation consistent with conclusions from a study at Tilburg University, Northwestern University, and Lehigh University. Well, actually, perfectly consistent with the obverse of one of the conclusions. The researchers report that sellers will accept lower prices for merchandise they enjoy making and services they enjoy providing.
     But it’s an additional conclusion which is of more interest to retailers: Shoppers are willing to pay higher prices when they learn that the seller enjoyed producing the items. Shoppers are also more likely to click on ads for the items and to end up purchasing the items. The researchers’ explanation, supported by their studies, is that both sellers and shoppers view production enjoyment as leading to higher quality outcomes, but only the shoppers rely on this view when determining a proper item price.
     An important condition is that these conclusions apply only when the shopper believes that creating the particular item requires specialized skills. We don’t expect to see it with automated mass production or simple manual assembly.
     The production enjoyment effect is quite different from the commonly experienced endowment effect, in which, with items carrying an emotional attachment for the seller, sellers tend to set noticeably higher prices on items than shoppers are willing to pay. A possible reason for the difference is that the endowment effect is usually encountered when the seller is not the same person as the manufacturer, such as with sales of secondhand merchandise.
     When facing the endowment effect, consider lowering prices. When facing the production enjoyment effect, consider raising prices. And for items which require specialized skills to produce or provide, give shoppers evidence of your enjoyment.

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Harvest the Joy of Selling Your Creativity 

Wash Your Hands of the Endowment Effect 

Gimme Some Lovin’ Handmade

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Slow Shipping to Reduce Returns

Provide customers ample time to work through regrets about purchasing from you. That’s a takeaway tip suggested by a study based at Julius-Maximilians-Universität Würzburg and Goethe University.
     The researchers analyzed data from about 1.8 million ecommerce customer orders. The average delivery time for an order was about five days. With an important exception, the rate of item returns for items delivered in a shorter time was significantly higher than the rate for items delivered in a longer time. The exception: When delivery was substantially delayed, rate of item returns climbed.
     Two explanations for this exception are that customers get irritated at the retailer when a delivery date promise is not met and that when delivery is substantially delayed, people find another source of supply.
     The researchers’ explanation for the main effect of somewhat longer delivery time decreasing item return rates is in terms of cognitive dissonance, a phenomenon familiar to every introductory psychology student, often via its nickname “buyer’s remorse.” Often at some point in time after making a nonroutine purchase, the consumer doubts the wisdom of their decision. The highest probability for buyer’s remorse is shortly after the purchase, so this is when we’d expect item returns to be most likely. As time passes without an item return, the consumer begins rationalizing the purchase, generating for themselves reasons the purchase was not, in fact, deserving of remorse. We’d expect the rate of returns to drop. And this is what happened in the study when delivery time was longer rather than shorter. The cognitive dissonance explanation was supported by an informal follow-on study in which some customers were asked about reasons for their returns.
     The researchers report the evidence from past studies that shoppers are attracted by promises of prompt delivery, and they recommend that retailers balance this factor against the advantages of lowering costly returns. Their filtering of the data collection is still another argument for using the study results as an impetus for your own exploration of what delivery times are most profitable for you. Data in this study were collected from only U.S.-based shoppers at one very large online retailer and excluded transactions in which it appeared the customer was ordering a large number of similar items because they weren’t sure which size would fit best, for instance.
     If longer delivery time promises aren’t advisable, consider other research-based methods, such as putting a clock image on the order form, to reduce item returns.

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Delay Assumptions About Fast Shipping 

Sharpen Time Sensitivity to Reduce Returns 

Quote Measurement Units for Future Buys 

Shower Cold on Regretful Customers

Motivate the Rushed Toward Motivated Reasoning

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Disconnect Crowding for Socially Disconnected

In his year 2000 book “Bowling Alone,” Robert D. Putnam described a fading of interpersonal social support in culture compared to the period of 1950 to 1960. Americans were joining fewer clubs and serving less often on political committees. Although the number of bowlers had increased, the number of people who bowled in leagues had decreased.
     Mr. Putnam attributed the phenomenon to the burgeoning of technologies such as television and the internet which satisfied needs absent mingling with others.
     Since publication of that book, we’ve reason to think the trend may have turned. There certainly has been ample political activism these days which requires more than reading a newsletter and electronically donating. Social media channels are alive with friending, liking, and meaty conversations. At the same time, though, there are countervailing pulls. For example, the COVID-19 pandemic left a legacy of isolating ourselves to avoid contamination. Severe political polarization leads to selectivity in companionship. On balance, then, social disconnectedness may be a common characteristic of contemporary culture.
     In a set of studies, University of Macau researchers find that this has an implication for retailing which is counterintuitive at first glance: We might think that a consumer who feels socially disconnected would welcome opportunities to shop alongside a crowd of others and to purchase experiences which include large group activities. But in reality, the socially disconnected want to stay away from crowds, on average. The explanation is that social disconnection sensitizes a consumer to potential threats and crowds decrease a consumer’s feeling of being in control. Disconnected consumers don’t consider a crowded environment as a way to reconnect with others, but rather as an unwelcome threat to their personal space.
     The researchers emphasize that people differ in their desire for belongingness, that some social density when shopping and consuming is often welcomed, and that the optimal level of crowding depends on the consumption situation. A level of crowding which would add to the excitement at a football game might be highly stressful when strolling through the streets of Venice. Recognize the aversion to crowding as a factor for you to test and calibrate as you design the optimal user experiences for your shoppers and customers.
     Also recognize how consumer perceptions of crowding can be influenced by your introduction of servicescape stimuli. Foliage generates calm in crowded areas. A peppermint fragrance during shopping or consumption relieves a sense of being uncomfortably crowded.

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Haul Retailing Through Usage Expectations 

Reap Loads from Solo 

Calibrate Store Congestion & Clutter 

Plant Advantages with Foliage 

Spice Up Store Sales

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Slope Down Discounts for Slope Use

It’s better to tell customers they’re paying less than to say they’re paying more. An Inland Norway University of Applied Sciences study found that a sample of alpine skiers and snowboarders living in the eastern part of Norway considered a pricing structure to be fairer if told that a discount is given for use of the ski area slopes during the week than if told a surcharge is applied for weekend use.
     But the discount magnitude made little difference in perceptions of fairness for discount amounts ranging between NOK 50 and NOK 150 (equivalent to about $5 to $15). The researchers conclude that managers can adapt discount levels based on their price optimization models without major concerns about how the discount level will affect the perceived fairness. In my email exchange about the study with Per Kristian Alnes, the lead researcher, he points out that this does not necessarily mean setting small discount amounts.
     The researchers then analyzed the effects of discounts for advance purchasing on perceptions of fairness. To what extent would a customer of ski slope use consider it fair or unfair if someone who purchased the pass 30 days in advance pays less than does someone who purchases their pass the same day as they use it? For this survey, the intervals presented to the participants ranged from 0 to 30 days and the discounts ranged from NOK 100 to NOK 300.
     The study participants’ responses showed a trend in which a greater discount for a greater number of days of advance purchase is considered fair. This was true both for survey respondents asked to imagine they’d gotten the early bird discount and those asked to imagine they’d not gotten it. However, the differences between same-day and 7-days-advance were noticeably larger than the differences between 14-days-advance and 30-days-advance. And for the 30-days-advance, a discount of NOK 300 was not rated as significantly fairer than a discount of NOK 100. Based on this finding, the researchers recommend that service providers set small discounts for early bird purchases.
     This set of studies did not directly explore how perceptions of unfairness impact shoppers’ purchase likelihood. The researchers do note prior studies showing how perceptions of a retailer’s unfairness can reduce customers’ subsequent buying intentions and can increase customers’ criticism to others about the retailer.
     Are these recommendations valid only for ski area proprietors serving alpine skiers and snowboarders living in the eastern part of Norway? Almost surely not. Discount amounts and pre-order intervals might differ, but the general conclusions are supported by other studies. The amount of a promotional discount has less consumer impact than does the discount’s availability.

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Fare Well with Fairness Intuition 

Theme Your Storewide Sales Promotions 

Cure Feelings of Retailer Betrayal 

Premiere Items with Gifts for Preorders

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Gaze at How Eye Contact Shows Charisma

Charismatic speeches by workplace leaders –compared to standard speeches or performance-contingent financial rewards – increased workers’ output by 17%. Researchers from University of Liechtenstein, University of Innsbruck, and Free University of Bozen-Bolzano report this compelling finding from a prior study in order to highlight the importance of charisma as a persuasion tool.
     The researchers also point out a gap in that and many similar prior studies: The studies fail to tell leaders what specific behaviors produce charisma impressions. Aiming to remedy this problem, their own studies find that one behavior is gazing at the eyes of the audience members. Leaders exhibiting more pronounced eye-directed gaze were rated as more charismatic in ways which inspired audiences to exceed workplace performance expectations.
     The surprise in the studies was not that charisma was associated with persuasiveness. Three of the survey items that raters used to measure charisma were “Has the ability to influence people,” “Has a presence in a room,” and “Knows how to lead a group.” What is more surprising is that a technique seemingly as simple as an eye gaze is closely associated with those three characteristics, which themselves have shown a statistical and conceptual association with each other.
     When you gaze at someone, you capture their attention and you verify their importance to you. You’ve considered them worth focusing on. Moreover, eye contact facilitates a synchronization of brain waves between two people, which is associated with synchronization in their opinions.
     These were correlational studies, so we can’t confidently conclude that all you need to do to impress as charismatic is to simply start gazing at the eyes of your audience members. The more defensible conclusion is that eye-gazing is part of a set of behaviors which hold promise for signaling to audiences your leadership skills and thereby for improving your persuasiveness. The nature of those behaviors is suggested by the wording of the other three survey items used in the rating of charisma: “Can get along with anyone,” “Makes people feel comfortable,” and “Smiles at people often.”
     The researchers argue that the significance of eye gaze arises from it not being simple to do correctly. Maintaining the gaze requires attention. Yet for the gaze to achieve desired results, the leader must also maintain attention to the message intended for delivery. The researchers also caution that their studies haven’t identified how to avoid irritating others with contrived or confrontational eye contact.

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Twin the Shopper Subtly to Double Rapport 

Dwarf Giant Smiles So You Won’t Look Dopey 

Flirt with Deep Acting 

Look Out for Where They’re Gazing

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Weigh Disposal Over Depletion for Less Waste

People use three justifications for purchasing products manufactured in wasteful ways: 

• Finances. “Especially now, when money is so tight, I want to get the most for what funds I have. If a product is manufactured or packaged in a way which produces waste, but gives me more value for my money, I deserve to be able to purchase it.” 
• Institutional dependency. “The government and the industry leaders should be setting the standards that will minimize waste. If I go it alone, my individual actions won’t make any noticeable difference.” 
• Cynicism. “To succeed in the competitive marketplace, every business has to engage in wasteful practices at least occasionally.”

     These justifications often lead shoppers to show willful ignorance of waste in manufacture of their purchases. Still, because shoppers generally do want to consider themselves as socially conscious, include waste minimization as a selling point. For best impact, feature that information prominently in ads the prospect sees before shopping with you.
     Also, emphasize announcement of the type of waste avoidance which is most important to consumers. Studies at University of Kentucky and Pennsylvania State University concluded that this is reduction in discharge into the environment of scrap after the manufacturing process. Of relatively less importance is reduction in use of raw materials taken from the environment. In the study, participants were presented a Facebook ad with the message “Outland Denim. We use up to 50% less water. We consume up to 50% less energy” or with the message “Outland Denim. We discard up to 50% less wastewater. We generate up to 40% less energy emissions.”
     The clickthrough rate was significantly higher for participants receiving the second message.
     Both types of waste are destructive, however. In a survey conducted by the researchers, a group of sustainability experts said that production waste arising from excess resource use is as important as waste arising from excess disposal, if not even more important.
     Results from the researchers’ further studies indicate that marketers can boost relative consumer attention to decreases in raw material usage by adding a resource scarcity or a long-term orientation prompt. The resource scarcity message was, “The Earth’s natural resources are finite and increasingly scarce. For example, water and other resource shortages are growing around the world.” The long-term orientation message was, “The future of the Earth is under threat. For example, our actions now will create growing environmental problems around the world for future generations.”

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See Through Anti-Waste Consumers 

Acknowledge Customers’ Willful Ignorance 

Talk About Social Consciousness Early 

Chimp Away Sales Resistances Using Scarcity 

Give Customers Long-Range Perspectives

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