Monday, August 22, 2016

Be Present

Researchers at Stockholm School of Economics begin by noting how consumers, since they are human beings, feel better when in the presence of other people who seem to be hospitable. It’s one example of what evolutionary psychology calls the most basic sales pitches of all: Our distant ancestors sought alliances in order to evade physical harm
     Then the Stockholm researchers moved on from the prehistoric savannah to the retail sales floor, where they found that those other people making us feel better could be store staff and those others do not even need to interact with us for it to work. The mere presence and visibility of a hospitable employee significantly increased both shopper pleasure and purchaser satisfaction.
     However this “Be Present” tip for retailers does differ from the “Be Present” of mindful meditation. The Zen Buddhist meaning is, “Whatever you’re doing right now, focus completely on doing that one thing. Attend to every aspect of what you’re doing, to your body, sensations, thoughts.”
     This state of mind wouldn’t mesh well with good retail customer service. The interception rate would suffer mightily. Business researchers define “interception rate” as the percentage of consumers entering a shop who are spoken to by a salesperson working for that shop. The idea of attending to fruitful contact with each shopper is an important one. Such contact enhances the probability of closing a sale and convincing the customer to return to the store.
     I do agree, though, that the “interception” part of the term makes it sound like the salesperson is blocking the shopper’s path, which is a pretty bad way to earn good will. The Stockholm research reassures us that we don’t need to swoop in immediately. We can acknowledge the shopper, then be present for a bit.
     In these cases, why would a shopper initiate the contact? Researchers at Justus Liebig University and Zeppelin University say some of the reasons are what you’d expect. It happens when the shopper knows what they want, but isn’t sure which of the available alternatives to select. No surprise that this is a factor. Still, the research findings did provide a twist: To raise the interception rate, train yourself and your staff to sense how much time and mental energy the shopper wants to spend considering the shopping decision. If a shopper fears that you’ll be giving too much information in reply, they’ll avoid asking you.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Evolve the Most Basic Sales Pitches of All
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“Check Out This Item!”

Thursday, August 18, 2016

Wash Up to Enjoy Dirty Deeds

You will sell more sweet desserts at your restaurant and sweet treats at your candy counter if you hand out a hand cleanser before asking.
     Researchers at Iona College, Baruch College, and University of British Columbia had groups of consumers either wash their hands or not wash their hands prior to being asked to select from more hedonic or less hedonic food items. Those consumers who washed their hands showed added interest in the pleasure-oriented foods. Similarly, washing hands after eating a sweet item reduced the amount of reported guilt about the indulgence.
     One explanation for this effect is that cleansing the hands washes away raging emotions. This was seen with the endowment effect. The “endowment effect” refers to people placing a higher value on objects they own than equivalent objects that they do not. Among other consumer behaviors, it helps explain why people resist selling used items at a price others will find attractive and why people hesitate tossing foods with an expiration date from last week when they wouldn’t eat the same food at a friend’s house if the expiration date had passed.
     Researchers at University of Vienna came across a novel method to ease bias from the endowment effect for both retailers and shoppers, for both physical goods and virtual goods. That method is hand washing. The researchers asked groups of study participants to consider exchanging an owned product for another item which was of objectively equivalent value. The endowment effect would cause the participants to overvalue the owned item, and so decline the opportunity to trade.
     Those who washed their hands were twice as likely to do the exchange as those who didn’t wash their hands.
     Another explanation for the rise in sales of sweets after hand cleansing has to do with closure. “I washed my hands of the whole matter,” is a well-worn way to say we’re moving on. The cleansing ritual frees us up for the switch from entrĂ©e to dessert. Acts of closure work afterwards, too. Researchers at London Business School presented shoppers 24 chocolates and asked each to select one to eat. Some of the people were asked to replace the lid on the tray before eating the chosen chocolate. The rest of the people were not asked to replace the lid. Afterwards, those who had replaced the lid reported higher enjoyment and more confidence they had made a good choice.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, August 15, 2016

Slap the Category for Price Image Effect

During the parent conference, a mother is told by her son’s teacher that the boy, although seeming to be shy, does regularly misbehave in class. “He should be behaving himself,” the mother agrees, “But what you see as shyness is really sensitivity. My son is a highly sensitive boy. I suggest that when he acts up like that, you deliver a sharp slap.” “I should slap your son each time he misbehaves?,” the teacher asks, shocked. “Oh, no, no, no!” corrects the mom. “He’s much too emotionally sensitive for you to do that! I’m saying he’ll shape up fast if you slap whatever kid is sitting next to him at the time.”
     Okay, it’s an old joke. Which explains why I thought of it when considering how slapping prices on psychologically adjacent item categories influences your store’s price image. Store Price Image (SPI) is the general belief your target markets hold about the level of prices your store charges compared to what other stores charge for similar items.
     Studies at New York University, Tel Aviv University, and IDC Herzliya conclude that shoppers usually choose a retailer they believe is less expensive more often on the items that interest them than a retailer they believe is consistently cheapest on average over all items carried. Keeping the everyday prices of these items low or, better yet for most small to midsize retailers, regularly discounting them will have a minimal impact on your store profitability.
     Yet, what of the situation where it would eat into your profitability excessively to consistently discount a particular item category which attracts your shoppers? Here’s where my slap joke comes into play. A set of studies at University of Auckland and Unitec Institute of Technology showed how consumers tend to group their impressions of item categories in certain ways. Most of the groupings in those studies seemed perfectly obvious: Consumer electronics with computer hardware/software and electronic games/consoles, for example. The reason for other groupings took more thought: Sports equipment with toys, vehicle accessories, and collectibles.
     Once you’ve figured out how your store shoppers group their impressions of products and where deep discounts would do less damage to your bottom line, discount a category associated with the category that’s popular, but where regularly discounting that one would eat away excessively at profits. Keep your business in shape by slapping down prices on the category next to the troublemaker.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Thursday, August 11, 2016

Title the Entitled “Risky to Please”

You can’t make everybody happy. But you’d think that if you do satisfy customers, they’d say that the product or service they got from you was more valuable. It often doesn’t work this way, according to University of Tulsa researchers. Season ticket holders for a National Hockey League franchise were asked for ratings of satisfaction with customer service and value from their ticket purchase. The finding was that many of the fans believed they were entitled to great customer service and therefore didn’t think great customer service added value.
     This falls in line with another set of findings at University of Georgia and University of Southern California, which looked at a variety of retail purchase types more typical than sporting events. Here, too, customers who believed they were entitled to great customer service weren’t particularly impressed when receiving it.
     Actually, customers might not even notice if you do manage to exceed expectations unless the excess is dramatic. When shoppers’ expectations are exceeded, shoppers with a sense of entitlement often take it for granted and don’t give lots of credit. It’s when expectations are not met that there’s an impact on the entitled customer’s evaluation of value.
     The risk in aiming to always exceed expectations is it nudges expectations up for the next time the customer visits. At some point, it is no longer profitable for you to keep raising the bar for yourself.
     For two reasons, this entitlement split between satisfaction and a sense of value is especially strong with retail transactions like those NHL tickets. First, season passes to name-brand sporting events are expensive, and when you’re paying a lot, you do start to feel entitled. Second, fans of a team tend to consider themselves part of what are known as “consumer tribes,” and members of such tribes reinforce each other’s sense of entitlement.
     Whatever you’re selling, when a group of your customers share not only an allegiance to your store, but also a passion for shopping with you, and when those customers share their passion with each other, you’ve created a consumer tribe.
     Historically, consumer tribes have been more exclusive than inclusive. A source of the members’ emotional devotion was a conviction that they were distinctive. However, in the interest of getting better returns on your customer service work, I recommend you encourage fans to invite others in rather than you creating a sense of entitlement for tribe members.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, August 8, 2016

Fly High on Trend Winds

Trade winds influence how fast a jetliner can fly east-to-west. Trend winds influence how high a retailer can fly up in profitability. For as long as the trend is driving sales consistently, the retailer can hold on as effortlessly as a kid would hold onto a kite flying in a consistent breeze.
     However, when the breeze dies or switches direction, the kite can promptly come crashing down. Monitor trends. Sometimes you can predict with high accuracy when the changes are about to happen. A classic example is the nature of American fashion trends in the 1940s. In recent years, researchers at Florida State University and Texas State University systematically evaluated the effects of War Advertising Council posters issued during World War II that urged women to make the best use of limited resources without yielding their individuality. The resulting trends included slimmer profiles and shorter hemlines in clothing in order to conserve fabric and more durable textiles in order to prolong the life of garments.
     Predictably, when WWII ended, these trends moved around.
     Spotting trends within trends improves your retail profits. In 2012, fashion clothing and shoe sizes began trending larger while fashion accessories were trending smaller. Large handbags—15 to 18 inches tall or wide—were highly popular before the Great Recession, but during the recovery accounted for only about 26% of dollar sales. Pulling ahead were midsize handbags—at least 12, but less than 15 inches tall or wide—which accounted for 43% of dollar sales. This during the same period that car companies were positioning pedals farther apart for bigger and wider feet and toilet seats were getting larger to accommodate expansion in other areas.
     Understanding the shopper psychology rationale for trends within trends or the relationships between associated trends gives a bonus lift. Researchers at Cornell University, State University of New York-Binghamton, and State University of New York-Buffalo noticed that people were getting heavier and they were using credit cards more often to pay for food. Sure enough, there was a relationship. The researchers studied the shopping behavior of 1,000 households over a period of six months. They found that shopping carts had a larger proportion of fattening food items when shoppers were using credit or debit cards rather than paying by cash.
     It may have been that the pain of paying by cash led to shoppers exerting more self-control when conducting their food purchases.

For your profitability: Sell Well: What Really Moves Your Shoppers

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