Monday, January 26, 2015

Double Down on Cause Marketing

“Cause marketing” refers to a business donating part of their proceeds to charity. The aim is to fulfill social responsibility and gain good will. Done properly, cause marketing adds to your profitability. For example, your occasional promise of a charitable contribution of $1 for each item purchased at the regular price has been shown to produce a higher average percentage gain in sales than offering a discount of $1 off the regular item price. Plus you’re helping the charity.
     Another angle on the “plus” here was explored by researchers at Temple University, Hanken School of Economics, and Sichuan University. What’s the effect on retail sales if you give a discount to the purchaser plus contribute part of the discounted sale price to charity? Inspiring their inquiry was the researchers noticing how Macy’s department stores have done this with once-yearly Shop-for-a-Cause promotions.
     Analysis of results from actual purchase decisions by 17,000 consumers showed that a moderate discount in this sort of situation works better than no discount or a deep discount. The moderate discount used for the studies was 30% and the deep discount was 50%. In discussing their results, the researchers say a discount in the range of 10% to 30% would be best for increasing sales.
     Why doesn’t a deep discount boost sales as much as a moderate one? Because the deep discount erases the motivation of feeling charitable. People are buying for the price alone.
     The higher effectiveness of the lower discount is fine for you. It’s easier to turn a profit with a discount of 10%-30% than with one of 50%. After all, in this version of cause marketing, changes in sales volume should be only part of what you look at. Doubling down with both discounts and contributions could cut into sales revenues even if the volume is up.
     Another way to increase the effectiveness is to make your offer of the discount-plus-donation for moderately popular products and/or brands. The percentage increase in sales for items that are already selling well won’t be as great as with less popular items, so don’t make the offer for items that are already quite popular. But because we’re talking about percentage increases, also don’t make the offer for products and/or brands that are not selling well at all. A 20% increase in unit sales of 100 is much less than a 10% increase in unit sales of 500.

Click below for more: 
Pair Contributions with Purchases 
Get Out of the Way of Individual Donations 
In Cause Marketing, Portray Effectiveness

Monday, January 19, 2015

Puff Down for Authenticity

People are more likely to buy from you when they perceive your store, the brands you carry, and your salespeople to be authentic. That’s a repeated finding about consumer behavior. But what goes into consumers considering a retailer to be authentic? Research findings due to be published soon in Journal of Consumer Psychology identify four interrelated components:
  • Continuity. A store being in business for a longer time and carrying the same sorts of merchandise. Low staff turnover. 
  • Credibility. Store policies and practices which are easy to understand. 
  • Integrity. Evidence that the store and its staff intend to earn a profit by serving customers well rather than by selling each customer as much as possible. 
  • Symbolism. A store image compatible with the shopper’s self-image. 
     The researchers—from University of Lausanne, University of Bern, and Concordia University—caution that bragging about these characteristics risks leading target audiences to question the authenticity. This is consistent with earlier research findings from University of Wisconsin-Madison, which documented how Starbucks had become a victim of their own successful branding of the shops as an authentic coffee experience. Many customers, after being convinced of the importance of such an experience, decided Starbucks was talking too much about their authenticity. Those customers gave up on Starbucks and aimed for other shops which showed more humility. Consumers figured that the more you highlight your authenticity, the less authentic you are.
     Shoppers’ search for authenticity could be attributed to the abundance of fake claims all around. The recommended remedy: Sensitize your ongoing customers to the degree of certainty in what’s said about your store and the items you sell.
  • When making a claim to a shopper, state the certainty you intend. “I can guarantee you,” is different from, “Most shoppers say.” 
  • When shoppers or customers bring claims to you, ask about the degree of certainty the customer gives to it. The degree of certainty associated with a claim is forgotten much more quickly than is the content of the claim. When assessing for authenticity, people benefit from being reminded about credibility. 
  • Use puffery cautiously. Puffery consists of lavish, often exaggerated, claims about a store or about items the store carries. If you sell quality products and services and you maintain a staff with acknowledged expertise, expose shoppers to your puffery. Let the puffery demonstrate the abundant enthusiasm you have for what you’re offering. But don’t push it too hard. 
Click below for more: 
Authenticate Subtly 
Sensitize Customers to Degree of Certainty

Monday, January 12, 2015

Naturalize Citizens to Serve Your Store

Consumer behavior researchers have long noticed how some people frequenting a store go out of their way to help the retail business serve its customers. The researchers named this phenomenon Customer Citizenship Behavior (CCB). The help might include assisting other customers who happen to be shopping in the store at the same time; giving suggestions to the store owner for improvements; and enforcing store standards, such as tipping off staff about a shoplifter.
     We’d like to cultivate CCB. A tool for doing that is service scripts. I’m a fan of scripting what we say and do with shoppers. It’s not that I expect the retailer to recite the exact words I suggest or carry out the precise actions I propose. It’s that I find scripting a good way to explain what I mean. Then I recommend the retailer be flexible in adjusting the phrasing and behaviors to fit the personality of the store and the salesperson’s style.
     The scripts also should fit the shopper’s style, and that introduces another three-letter acronym: CNK for Customer Need Knowledge, defined as how well the salesperson accurately and promptly identifies each shopper’s needs and desires.
     Researchers at University of Sydney, University of New South Wales, University of Jena, and University of Muenster find that when CNK is high, service scripts usually cultivate Customer Citizenship Behavior. But when service scripts are performed by employees with low customer orientation, the service scripts discourage CCB. Shoppers exposed to these scripts become less likely to provide unsolicited feedback to store staff or to express interest in giving the store more business.
     My guess is that this is because low CNK leads to the script being delivered with little sensitivity or sincerity. It also can be because the salesperson fails to identify the type of talk the shopper wants at that point. Create your scripts with three sorts of language:
  • Conventional. Initiating conversation about the latest Hunger Games flick or sports scores develops rapport and passes the time of the service or product delivery more pleasantly. 
  • Commercial. We’d like our verbal transactions with shoppers to end in commercial transactions. Ask for the sale. 
  • Ceremonial. Culture dictates what we say to the consumer if we want to create store loyalty. With certain people, it might be “Hello, sir,” while others expect, “What’s up?” The “Have a nice day” fits fine with some shoppers, but strikes others as smarmy. 
Click below for more: 
Branch Out Scripts to Allow for Rituals 
Guide through Rituals with Ceremonial Language 
Staff Your Store for Customer Need Knowledge 
Warm Up Cold Calls 
Show Respect in Front of Customers

Monday, January 5, 2015

Go for Greed over Green

A clear sign that your new hire for the selling team won’t work out: While shoppers are browsing around, the new hire is wearing earbuds and gyrating to a rhythm completely divorced from any background music you might have playing in the store.
     But even without the earbuds or gyrations, if that new hire—or any other of your staff—is spending lots of time tuned to station WII FM, it’s trouble. WII FM is “What’s In It For Me?” Our focus should be on the shopper. We win our payoffs by fulfilling consumers’ needs and wants.
     From the shopper side of the transaction, though, WII FM is to be expected. We should continually be asking ourselves, “What’s in it for the consumer?” Regarding environmental conscientiousness, the answer is closer to greed than to green. Researchers at Yale University described to study participants a company’s intention to update a line of household cleaning products. Some of the participants were told that the company’s primary objective was to make the products better for the environment. The others were told that the product developers had discovered that a side benefit of the updates was that the products would be better for the environment.
     Those participants told the green gain was unintentional, not the main objective, were more likely than the other group to predict that they’d buy the product.
     Cleaning effectiveness is more important to consumers than is their going green with cleaning products. This is not to say you should downplay the benefits to the environment of products and services you sell. A University of Indiana analysis of 75 product introductions during the years 2009 through 2009 indicates that green claims improve the attractiveness of offerings and of the stores carrying them. Instead, the message is to emphasize quality advantages to the purchaser over sustainability advantages to the environment.
     A few years ago, the initial marketing thrust for Bardessono Hotel & Spa, a boutique hotel in California’s Napa Valley, was broadcasting the place’s platinum environmental credentials. But consumers seeking luxury understood the word “green” here to mean sparse and uncomfortable. As a result, it was the hotel bookings that turned out to be sparse, making the owners highly uncomfortable.
     Now the Bardessono website gives equal billing to the Leed Platinum environmental award and the 2014 Conde Nast Traveler Readers’ Choice Award for “Best Hotels in San Francisco & Northern California.”

Click below for more: 
Claim Effectiveness over Environmentalism 
Hook Going Green to the Excitement of Nature

Monday, December 29, 2014

Color Me Scared Blue

Life insurance sales professionals regularly bring up to prospects the rather frightening possibility that the prospects could die at any time. In certain circumstances, there are many other sorts of retailers who can make a sale more likely by arousing in the customer a sense of fear—fear about the consequences of not making the purchase or buying into the course of action we’re proposing. Fear has also been identified by University of Pennsylvania researchers as one of the top emotions—outrage being the other—which motivate consumers to distribute shopping advice via social media.
     The words you use in the fear appeal make a difference. Raise enough fear of a real danger to win the customer’s attention and motivate action, but only to the degree that you’ve a guaranteed way to substantially reduce the risk. Don’t oversell. Researchers at Auburn University find that if the fear becomes too intense or if the shopper doesn’t see a way out, the shopper becomes defensive and starts thinking about why they don’t need the item you’re wanting to sell them. Or if they do end up making the purchase, chances are they’ll associate painful emotions with your store, making it less likely they’ll come back again.
     The colors you choose also have an effect. Recently, studies at Vrije Universiteit Brussel found that a background of blue in ads, signage, and promotional materials employing fear appeals will work especially well in arousing in the viewer feelings that the threat can affect them personally and is worth attending to.
     When first learning of this research finding, I was surprised. In consumer research, blue is associated with leisurely, deliberative shopping. People prefer ads with a backdrop of blue to those with a backdrop of red. American Express named its credit card Blue because their market research showed the color was associated with positive feelings about the future.
     Upon further reflection, the finding does make sense to me. Blue provides that patina of optimism which keeps the fear in the sales pitch from overwhelming the prospective customer. Even then, the Vrije Universiteit Brussel color recommendation holds only for relatively low threats. With high-threat messages, people pay only limited attention to the background color.
     For high-threat pitches, have the shopper relax, without inducing big pressure to make the consumption decision, and complete the sale in steps rather than deciding it all has to happen at once.

Click below for more: 
Scare Customers into Buying 
Arouse Emotions to Drive Online Sharing 
Craft Fear Appeals 
Exercise Cultural Sensitivity in Color Use 
Call for Scrutiny of Groundless Fears 
Stop Threatening My Buds