Monday, November 12, 2018

Open Your I’s to Customer Comfort

A salesperson’s use of the pronoun “I” when talking with shoppers can demonstrate that the salesperson is showing empathy in serving the shoppers and is prepared to take action to benefit the shoppers. The consequences include higher intentions to purchase from the salesperson, according to studies at Wilfrid Laurier University, University of Alberta, and Simon Fraser University. “I am happy to help answer your question,” is better than, “We are happy to help answer your question.”
     The effect is strongest with shoppers previously unfamiliar with the salesperson. When a shopper already knows the salesperson or similar salespeople in a store to be empathic and ready to go into action, the use of “I” versus “we” is less necessary.
     Other research agrees. For example, in responding to a customer’s complaint, it’s better for a store employee to say, “I’ll take care of it,” than, “Our store will take care of it.”
     Yet in coaching yourself and your employees to use “I,” realize it can be overdone. Other research has found that an unusually high frequency of “I” indicates the salesperson is excessively focused on themselves at the expense of the client or even deeply depressed, neither of which facilitates selling. Keep your eyes open for the proper blend of the personal pronouns.
     Researchers at University of Florida, Stanford University, and Turkey’s Koç University explored when, if ever, a misplaced “we” implies an intimacy which irritates shoppers. First, they created three versions of a Wells Fargo Bank ad to use in their studies. The difference was in the wording of one sentence:
  • “Together, we make whatever decisions necessary to ensure your life goes uninterrupted.” 
  • “Together you and Wells Fargo make whatever decisions necessary to ensure your life goes uninterrupted.” 
  • “Wells Fargo makes whatever decisions necessary to ensure your life goes uninterrupted.” 
     For current customers of the bank, the first version led to the most favorable attitudes. They liked the idea of the bank and the customer acting as if one. For non-customers, the outcome was more complex. In general, the wording made no difference. Non-customers had no psychological investment in the relationship with the bank, so probably weren’t assessing the differences in the language.
     However, when another group of non-customers were specifically asked to pay attention to the differences, the “we” phrasing was less well received than the “you and Wells Fargo.” It seems the “we” did portray a smarmy congeniality.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more:
Save the Group Hug for Familiar Customers
Resolve Customer Complaints Carefully
Show Complainers Respect, Concern, & Empathy
Function Better by Noticing Function Words
Go for Greed over Green

Monday, November 5, 2018

Wise Up Your Shoppers

Wisdom in your shoppers is of value to you. Wise guys and gals are less susceptible to fraud, allowing you the comfort of profiting from the practice of ethical retailing.
     Wisdom has been prized throughout cultural history, but the definition of wisdom varies among cultures. Researchers at College of William & Mary and University of Virginia set out to define wisdom in consumer culture. They interviewed a set of Americans living in different areas of the nation and ranging in age from teens to 90s. Each of the interviewees had been described by others as a wise consumer. The interviewees were probed about what characterized their purchase decisions.
     The sample size in the study was only 31 people, and the selection technique was snowball sampling. A snowball sample is gathered by asking people you interview to nominate others who fit the criteria you’ve set. Snowball samples, especially when of limited size, are prone to bias. In fact, the conclusion of the study, defining what qualifies as a wise consumer, pretty much matched the definition given at the start: A shopper who balances emotions with logic, the future with the present, and others’ needs with their own. Still, people in the study fitting this description did show more specific characteristics, such as:
  • Cultivates a clear idea of what lifestyle is meaningful in that it aligns with their distinctive values and available resources 
  • Intentionally refrains from spending money and time unless they can clearly identify a reason which feels right or makes logical sense 
  • Contemplates the results of past consumption when making decisions for future consumption 
  • To master negative emotions and facilitate positive ones, seeks specific situations which promote wise consumption 
  • Displays patience fitting the significance when making consumption decisions 
  • Maintains openness in considering a range of consumption alternatives, such as renting or sharing instead of purchasing 
  • Transcends self-interest by preferring consumption options which avoid harm to the community, other consumers, or animals 
     To cultivate target audiences of shoppers with wisdom, appeal to these characteristics in your marketing.
     A New York Times article based on an abundance of research points toward ways sales people and marketers can help consumers develop and use wisdom:
  • Present shoppers with more than one alternative to satisfying a need or fulfilling a preference 
  • Tell stories about what it would be like to actually use each alternative 
  • Encourage the shopper to tell their own stories about use 
For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Condemn Snowball Samples to Hell
Know How Much Emotion to Deliver
Accent the Emotions when Imminent Usage
Bag Consumers with Future Images
Publicize Social Consciousness
Add Rentals as a Profit Center

Monday, October 29, 2018

Curtail Quantity Sensitivity by Here-and-Now

When would people resist paying more to visit an amusement park with twelve attractions than one with six? Or to purchase three video games instead of a single video game? Or donate a greater amount of money to a fund to save four pandas rather than one panda?
     Stated in another way, of direct importance to the retailer, “Under what circumstance should we hesitate offering more products or experiences in a single bundle, realizing that the shopper isn’t interested in paying a higher amount for the larger quantity?”
     One answer has to do with satiation. When a customer has had enough for now, they don’t want a bigger set. But researchers at Columbia University and Singapore Management University have another answer, this one related to what consumer psychologists call “scope insensitivity.” When purchase decisions feel psychologically closer to the shopper, the shoppers are more likely to show scope insensitivity, in which a higher product count won’t strongly command a higher price.
     In the studies, psychological closeness came from saying the trip to the amusement park would occur in just a week, where the comparison group of study participants were told it would occur next year, the video games had been created recently rather than in the early 1980s, and the need for the panda-protection contribution was imminent. Prior studies found that psychological distance—the opposite of psychological closeness—is higher when a shopper:
  • Believes they’ll need to travel a longer way to obtain the item 
  • Is selecting an item to be used in the future rather than now 
  • Is selecting an item for use by someone else rather than for their own use 
  • Considers returning or exchanging an item purchased by someone else rather than by themselves 
     It’s not that people would be unwilling to pay more for a larger quantity in the set. Instead, it’s that people resist paying more than when there is psychological distance and therefore generally require extra persuasion.
     The explanation for the scope insensitivity effect is in the psychological closeness affect. Emotional decisions are, by definition, less logical than well-thought-out decisions, and consumers get more emotional when a decision is closer to the here-and-now. According to studies at University of Colorado-Boulder, University of Oviedo in Spain, and Lieberman Research Worldwide, this is true for positive emotions—such as the thrill in having the item—and negative emotions—such as anger at flawed product performance.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Limit Availability to Overcome Satiation
Drive the Psychological Distance

Monday, October 22, 2018

Externalize Surcharges in Partitioned Pricing

When I stay at the Eldorado Resort Casino, where University of Nevada-Reno houses me for my teaching commitments, the bill includes debits not just for the lodging itself, but also for a resort fee and a tourism surcharge. If when consulting with retailers in Boston, I’d chosen to rent a car from Hertz at the airport, I’d have been subject to an airport concession fee, energy surcharge, and convention center surcharge. Choosing a taxi wouldn’t excuse me from the extras, though. There’s still an airport surcharge and possibly a surcharge for a rush-hour ride.
     What are the best ways to present surcharges to shoppers? asked researchers at Pennsylvania State University, University of Groningen, and Iskander Business Partner. More pointedly, can services retailers employ a surcharge strategy to increase profit margins without incurring the full thrust of shopper fury often resulting from price increases?
     The research-based answer is yes:
  • Minimize the number of separate surcharges. When there are multiple surcharges, the consumer becomes more likely to hold the retailer responsible regardless of the explanation for the surcharges. At the same time, findings from Adelphi University, University of Alabama-Huntsville, and University of Dayton indicate that the amount of any single surcharge should never exceed 20% of the base price. If a surcharge is a high percentage, consumers will consider the entire pricing structure unfair. That affects not only the current purchase, but also the potential for future business from that shopper. 
  • Lead off with surcharges that draw attention to other providers. A “convention center fee” is better received than a “rush hour fee.” When it isn’t possible to present surcharges as the responsibility of others, it is best to present an all-inclusive price. 
  • To the degree possible, state the reason for the surcharge in a way that highlights the benefit to the consumer. “Business center availability” can do this when “business services fee” doesn’t. 
  • Avoid labeling the surcharge as temporary. When faced with a temporary surcharge, a shopper concludes they’re paying more than others will in the near future, this leads to feelings of unfairness, and the general negative tone makes blame of the retailer more likely. 
  • Consider surcharges a form of partitioned pricing. Research finds that compared to bundled pricing, partitioned pricing increases purchase intentions with products and services that carry some financial or psychological risk for the shopper. Partitioned pricing makes less difference in purchase intentions for routine purchases. 
For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Explain Price Ups & Downs to Customers
Use Partitioned Pricing to Highlight Benefits

Monday, October 15, 2018

Elevate Expected Prices with Hot Cues

As a rule, when the weather is warm, people become more comfortable paying higher prices for products and services. Yet what’s true in general is not always true for specific cases. If the product is a snow shovel and the service is repair of the furnace, a willingness to pay more is likely to come into action during the cold months instead of during hot ones. And studies at Clicksuasion Labs in North Carolina, University of Auckland, and Western Sydney University find that the effect of warm temperature reports on price anchors operates most clearly when consumers are making their purchase decisions without complete amounts of information.
     Notice that those studies talked about reports of warm temperatures, not just warm temperatures. Participants in one of the studies who were asked to think about their activities during an 85º day subsequently estimated higher costs for a service than did participants asked to think about their activities during a 35º day. By prompting your shoppers to consider their experiences in warmer weather, you increase their comfort at paying more in circumstances where they’ll be making purchase decisions based on limited amounts of information.
     Enhancing this effect is that higher temperatures stimulate impulsivity. Shoppers during hot summer months prefer mental shortcuts to detailed analysis in making purchase decisions.
  • When the weather is temperate, people would prefer to get their necessary shopping done with so they can move on to leisure activities. 
  • Pleasant heat after a time of less pleasant cold raises people’s spirits, and happier people get more interested in shopping. 
  • Prolonged high heat wearies shoppers’ muscles, thereby making them less alert and less resistant to spotting weak reasons for buying or not buying. 
  • Higher temperatures when shopping—as long as they’re not too high to be pleasant—lead to consumers being more likely to purchase what others in the vicinity are buying. 
     Correspondingly, colder weather leads to more deliberative decisions. University of Pennsylvania researchers analyzed the enrollment decisions of 1,284 college prospects at a campus known both for its academic strengths and its limited recreational offerings.
     If the day of the college prospect’s exploratory visit to the campus was especially cloudy, the odds that the prospect would choose to apply to that campus increased markedly.
     What makes the most difference is change. Pleasant heat after a time of cold stimulates impulsiveness. Cloudiness higher than average leads to more deliberative decision making.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Heat Up Sales Revenues
Dog Decision Rigor During Dog Days