Monday, August 10, 2020

Convert Shoppers with Lucky Discounts

For a special sale, you could advertise a 20% discount good on any one item. But a set of University of Colorado, University of Connecticut, and Virginia Tech studies suggest you should instead offer a game of chance in which the shopper might get a 20% discount, a larger discount, or a smaller one. You’re more likely to make the sale and, for most of the game participants, produce feelings of good luck which stimulate further purchases.
     As you’d guess, the larger the discount the customer ends up winning, the greater the feelings of luck and positive store attitude. But even a small resultant discount shows the effect. In the study, those winning a 10% discount spent more money than an equivalent group who were just offered a 10% discount without needing to play the game.
     The effect does seem stronger for hedonic than for utilitarian items. For all items, the promotional game increases the number of customers who will subsequently make purchases. There is less influence on how much each customer spends.
     What about those who don’t win any discount? It turns out that they are no less likely to spend money than for an equivalent group to whom a discount in any form was not even mentioned. There appears to be no downside to using the game of chance beyond the costs of producing and managing it.
     For almost all shoppers, this type of game of chance adds fun to what could otherwise be a routine transaction. Studies at Ohio State University and Vanderbilt University indicate customers who believe they’ve gone above and beyond to patronize your store will be especially attracted to the game-of-chance discount. They already feel luckier when shopping with you. A shopper’s belief they’ve made an extra effort can arise in a variety of ways:
  • High frequency shopping with you 
  • Driving a longer distance to shop with you 
  • Selecting an item with plans to use it in the future rather than now 
  • Choosing an item for use by somebody else 
  • Shopping with children in tow 
     However, the widespread attractiveness of such a game of chance doesn’t hold with loyalty program rewards. People with an Asian mindset prefer large loyalty rewards earned with an element of fate. They’ll like the sweepstakes tickets. But people with a Western mindset want more certainty. Small rewards for fewer points, big rewards for those who save up points.

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Shape Benefits As Hedonic or Utilitarian
Show Devoted Customers How to Get Lucky
Tailor Loyalty Programs to Customer Culture

Friday, August 7, 2020

Address Ancillary Fees as Personalizing

Your customers might not recognize what the marketing term “drip pricing” refers to. However, they sure know what it’s like. It’s when a seller announces additional fees after the customer makes the initial purchase decision. It could be that your customers first encountered drip pricing when booking air travel. Want to check another bag? The price of your ticket just went up. Want more leg room? Sure, that’s available, but it’ll cost you. Or it could be that your customers learned to avoid retailers who tempt them with an unrealistically low item price and then quote a succession of fees to make the item usable. Drip. Drip. Drip. This is the malevolent form of what’s called “partitioned pricing.”
     Avoid the trust-busting of drip pricing by announcing your menu of ancillary fees before asking the shopper to commit to the purchase. That’s the research-based advice from an international team at California State University-Long Beach, Macquarie University, Seoul National University, and Gachon University. The advice is accompanied by news of a way to develop appeal of the menu: Present it as a way for the shopper to personalize their purchase. Consumers like personalization.
     With this approach, the researchers found that the degree of acceptance was as high for multiple added fees as for a single added fee. It didn’t come across as drip, drip, drip. However, the cost of each surcharge does matter. Research findings from Adelphi University, University of Alabama-Huntsville, and University of Dayton indicate that each fee should not exceed 20% of the base item price.
     Still, this approach won’t work in all cases. Your customers may have had eyes opened up to drip pricing while settling up the hotel bill. What’s this resort fee, never mentioned when the room reservation was made? The fee is not an option.
     The answer here, say the researchers, is to foster in buyers an appreciation for the seller deserving fair compensation. This happens when buyers trust the seller. Provide an explanation for the fee and, if possible, the way in which the basis for the fee benefits the buyer. Researchers at University of Pennsylvania and University of Florida found that customer anger is most likely when a retailer's explanation for a surcharge is something like transportation or insurance. They concluded that the explanations most likely to head off customer anger center on the cost of goods to the retailer from the supplier.

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Corner Risks with Partitioned Pricing
Drive Personalization by Fostering Narcissism
Buttress Trust with Clarity
Gas What Your Shoppers Are Worried About!

Monday, August 3, 2020

Scan Shopper Use of Handheld Scanners

Having your customers scan their purchases as they shop, using handheld devices you provide or an app on their own phone, could save you money in store staffing and speed the checkout process. But what are the effects on customers’ buying behavior?, researchers at Babson College, University of Tennessee, and University of Bath wondered.
     In a set of studies, they found that, on average, use of a handheld scanner increases the basket total. This generally came from the user buying more items rather than buying higher-priced items. The additional items were largely those classified as impulse or healthy. My interpretation of this is that people justified to themselves buying an impulse item by also purchasing a healthy item.
     This increase in basket total might not be what you’d expect to happen. Using the scanner increases awareness of how many items you’re purchasing and the price of each item. You could think this would stifle spending. However, the effect was the opposite in most cases. The many shoppers who stay conscious of their budget relax a bit when they can delegate the tabulation to the scanner. In fact, the minority of people who said they shop without a budget spent less, on average, when using the device.
     Parallel findings resulted with use of another tracking device. Researchers affiliated with Cornell University, Georgia Institute of Technology, University of Groningen, Maastricht University, and Wageningen University conducted a study in a set of Atlanta grocery stores using shopping carts containing a panel displaying a running total of purchase costs. In this study, budget shoppers spent about 22% more than those without that smart cart, while non-budget shoppers spent about 19% less.
     Such self-service purchase technologies slow the shopper down and cause them to pay closer attention to items. The devices also can be programmed to issue answers to questions a shopper has about an item. Shopper involvement builds. Expect handheld scanners to give a more uniform sales lift than do smart carts, though. This is because research finds that scanner users subconsciously consider the device to be an extension of their body rather than separate from it. This puts the shopper psychologically closer to each item which is being evaluated. The closeness stimulates purchasing.
     In a retail era when minimum physical interaction with merchandise is preferred during purchase, shoppers might choose to keep their hands off scanners. Yet they could always wear gloves.

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Border Shoppers’ Uncertainty
Serve Yourself to SST Guarantees
Sense the Pleasure from Tactile Ordering
Balance Healthy and Indulgent in Merchandise

Friday, July 31, 2020

Kill Elder Abuse by Slaying Elder Stereotypes

An Aggression and Violent Behavior research review article to be published soon analyzes how stereotypes about elderly adults provoke abuse of them. The authors, from Nova Southeastern University, note the substantial climb in rates of elder abuse in the U.S. and in other countries which have tracked the problem. The climbs can’t be accounted for just by the increases in numbers of seniors. The evidence is that frictions between the old and the younger because of stereotypes, perhaps aggravated by the increases in the numbers of seniors, are involved.
     The core of the stereotypes causing elder abuse is a dimension running between intellectual competence and emotional warmth. In all realms of life, consumers subconsciously feel organizations, products, and people that are more competent are less warm. Nonprofits are seen as more warm and less competent than profit-making organizations. A broadly smiling face on an item or salesperson detracts from competence impressions. Politicians perceived as highly empathic tend to be perceived as less businesslike.
     The researchers see that across cultures which vary in other respects, the elderly are often stereotyped as having high warmth and low competence. In most younger people, this elicits pity, or at least sympathy. But in those who are exploitive, the reaction is neglect. “They won’t notice we’re not taking care of them, and even if they do notice, they no longer have the skills to demand changes.”
     But when it comes to elderly stereotypes, the dimension is warped and folds back on itself. Some who are relatively younger assume those of advanced age are low in both warmth and competence. Seniors can indeed be stubborn. Rather than respecting this as a sign of resolve borne of long experience, it can be seen as evidence of meanness and denseness. The elderly adult with dementia could be frightened. But it doesn’t mean this individual is cruel or stupid, and it’s inaccurate to apply valid experiences with one individual to stereotype a whole group.
     Seeing the elderly as stubborn builds anger. The research analysis indicates this can potentiate contempt and disgust, which lead to dehumanization, which in turn gives justification for abuse, including physical violence. Stereotype can kill.
     An important revelation in the researchers’ analysis is how elderly adults stereotype themselves, opening themselves up to abuse by others. Among those we persuade to slay their distorted views of the capabilities of the elderly should be the elderly themselves.

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Keep Smiles for Your Face, Not Your Emoticons
Attack with Credibility
Negotiate with the Stubbornness of Old Age
Forget Stereotypes of Seniors’ Memory Deficits

Monday, July 27, 2020

Produce Facebook Engagements with Pronouns

“Denise, the celebration decoration expert, offers some of her great ideas.” Gee, that seems like a fine lead sentence for a social media post by a party supplies retailer. It should nail the kind of attention which generates plenty of likes, comments, and shares.
     No, maybe, “Denise, the celebration decoration expert, offers you some great ideas,” would do a better job. Or does it really make any difference?
     It does indeed, according to studies at University of Rhode Island, Wright State University, and University of Oxford, which aimed to advise Denise and other marketers. By analyzing what happened with almost 16,000 posts by brands on Facebook, the researchers developed guidance about which pronouns to use when. Those tips are conditioned by whether what you’re marketing is a product or a service, whether consumers see the offering as primarily functional (utilitarian) or pleasure-oriented (hedonic), and whether you’re aiming mostly for likes, comments, or shares. The research findings don’t provide guidance for every combination of these. Here is a selection of what does work:
  • For utilitarian goods, generate more comments by using “he/she/they” in posts. 
  • For hedonic goods, avoid the word “I.” Generate more comments by using the words “you” and “we.” 
  • “You” and “we” also grow the number of comments, and the number of likes, in posts from utilitarian services brands. “We” also stimulates shares of posts. Avoid using “I,” since it seems to depress comments, likes, and shares. 
  • For hedonic services, including “you” stimulated comments. “We” cut down the number of likes and shares from the percentage generated in posts without those words. 
     It appears, then, Denise would be wise to go with the second alternative of the lead sentences. It includes “you.”
     The pattern of study findings is complex, with part of the explanation in the intimacy implied by the use of “we.” Researchers at University of Florida, Stanford University, and Turkey’s KoƧ University compared three versions of a Wells Fargo Bank ad.
  • “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.” 
     Current customers of the bank liked the first version best since it presented the bank and customer acting as if one. Some non-customers were irritated by the first version, thinking the “we” portrayed a smarmy congeniality.

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Shape Benefits As Hedonic or Utilitarian
Open Your I’s to Customer Comfort
Moderate In Using Research Findings

Friday, July 24, 2020

Mobilize Cause & Guilt Against Fake News

In an election campaign, if the other side tells a lie about the candidate or cause you’re championing, you may be tempted to issue a terse denial. “No, it’s not true!,” you would proclaim, and leave it at that. To give a detailed response, or even fully repeat the claim yourself, breathes life into it, so goes the logic.
     However, studies at Boise State University, University of Western Australia, and Virginia Tech confirm what experienced politicians realize: To move toward persuading voters it’s fake news, you must provide an alternative version of the events. This held true as far back as 2004 Democratic presidential candidate John Kerry’s initially sparse, disjointed response to the Swift Boat Veterans for Truth claims. He lost the election, you will recall. This in spite of those claims being thoroughly discredited later. The need for a rebuttal story holds even more true now, in these polarized times when sufficiently stimulating hogwash generates viral retransmission.
     Not any alternative version will do, though, say the studies. It should anchor itself in details which are commonly acknowledged to be true and then aim to comprehensively connect those details in a story of cause-and-effect. This is necessary because even when we’re given corrective information, the previous malicious stuff continues to influence us if it ties together the known events more neatly.
     But wait, there’s more. Getting out ahead with the complete story of cause-and-effect often isn’t enough in politics. Voters prefer to recall the version which reinforces what they want to believe. Other research finds that a way to ease this resistance to believing the truth is to arouse guilt at continuing to embrace the objectively less plausible version.
     Consumer psychologists distinguish guilt from shame. With guilt, the person acknowledges they’ve done something wrong. With shame, the added element is that the person believes others hold them responsible. Researchers at RTI International in San Francisco, George Washington University, and University of Pennsylvania, motivated study participants to experience either guilt or shame. Compared to those induced to feel guilty, people induced to feel ashamed were more likely to express anger. They were irritated at what they perceived as efforts to manipulate them. Shame backfired.
     Navigate toward guilt and away from shame with the message, “You’ve been fooled. It wasn’t your fault that you were told this error-filled tale. Your trust in the source was reasonable, but may have been betrayed.”

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Endorse Policy, Not Character, Political Attacks
Craft Powerful Stories
Aim Away from Shame