Thursday, May 17, 2018

Keep Calm to Carry On Seniors’ Fraud Evasion

Consumer behavior researchers disagree about whether elderly adults are more susceptible overall to financial scams than are younger consumers. But the researchers do agree that the nature of the susceptibility and the dangers of succumbing to the fraud are more serious for senior citizens. Regarding the seriousness, seniors are more likely than young adults to be living on a limited income and to have fewer years to make up for large financial losses.
     Regarding the nature of susceptibility to fraud, researchers at Stanford University, Duke University, Humboldt University Berlin, Financial Industry Regulatory Authority, and AARP prefaced their studies by noting two risk factors for fraud are more common in the elderly—decreasing ability to accurately recall information from ads and to detect lying in face-to-face interactions.
     The researchers then went on to explore another risk factor which has been less well recognized—how emotional arousal, such as that famously used by successful con artists, interferes with critical thinking skills. This happens in adults of all ages, but the effects grow worse as we age.
     Older consumers respond to emotion-laden sales messages (“The aroma of our coffee brings waves of contentment”) more strongly than to purely rational sales messages (“Award-winning taste at a lower price”). Emotional appeals also result in senior shoppers remembering details about sources of sales messages more accurately. The seniors are especially receptive to positive emotions, so in a fraudulent sales pitch, they will pay more attention to the touted benefits than to signs of danger and will remember those benefits more clearly.
     The upshot of all this is that we can help older adults evade fraud by encouraging them to enter the consumer situation calmly, maintain calmness during the transactions, and insist on enough time to calmly consider tradeoffs prior to finalizing a purchase decision.
     Seniors will probably embrace this advice. They don’t want to be defrauded. Plus, unlike their young counterparts, seniors generally find happiness more in calmness than in excitement. They’re the type of consumers who in studies at Stanford University, MIT, and University of Pennsylvania would select “a relaxing blend of chamomile and mint” over “a refreshing peppermint blend” and a bottle of “Pure Calm” water labeled in green over “Pure Excitement” labeled in bright orange. In other research, older adults preferred calm TV advertisements with few camera changes, slower speech, and relaxing or no music over more arousing advertisements.

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Monday, May 14, 2018

Build Up Bawl Outs When Telling Complainers

A customer who encounters flawed merchandise or service from your business often yearns for the person who is responsible to be bawled out. That’s according to researchers at Florida State University. In fact, the researchers found that a promise the employee will be reprimanded is among the most effective ways to keep from losing a snubbed customer.
     However, the researchers also found that the customers want reprimands delivered out of their presence. They want harshness, yet don’t want to witness the harshness. They also want the employee to be granted the respect of privacy.
     These findings are in accord with others, from University of Southern California, which concluded that about 40% of retail consumers report how at least once each month, they see a store employee treat another store employee so rudely that the customer gets less interested in shopping at that store. A supervisor reprimanding in front of a complaining customer the employee responsible for the shortfall may be intending to demonstrate respect for the customer. But this message is severely undercut by the failure of the manager to show respect to the salesperson in front of the customer.
     Moreover, it’s best that you not be harsh even in private. You’ll get better results when you fix the problem instead of fixing the blame. Holding people responsible is different from fixing blame. Estimates by psychologists at New York University and University of Tulsa suggest that about 70% of retail employees will do less well in a store like yours if you put more emphasis on fixing the blame for the problem than on fixing the problem that caused the setback.
     When serious problems arise in your retail business, hammer out the difficulties in supportive ways. Use your hammer to repair the shortfalls, not to pound your valuable staff—and consequently, their staff morale—into the ground. Stop at embarrassment, short of guilt or shame.
     Still, amplify the degree of intensity when telling the complaining customer what action you’ll be taking. Your words, voice tone, posture, and gestures should all convey that you consider the complaint to be consequential, and thus there will be consequences. With a loyal customer who feels highly scorned, telling them afterwards that a serious reprimand was delivered is useful. Actually, it’s possible the customer will say, “Oh, it wasn’t really that serious,” a mindset which further counteracts any desire to take their business elsewhere.

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Thursday, May 10, 2018

Generate Seniors’ Generativity Now

People donate higher amounts if asked to pledge a charitable donation in the future than if asked to give right now. As a result, charities can find it advisable to put off the collection date. However, this temporal discounting of donation amounts applies from the perspective of the charity, too. Getting money sooner is better than getting money later, everything else being equal.
     Good news, then, from Ryerson University researchers which finds that this temporal discounting among donors fades markedly as the donors get older. Senior citizens show fewer differences between donation-now and donation-later amounts than do younger adults. The researchers’ explanation is that as we age, our generativity—concern about future generations—grows, resulting in greater altruism and willingness to donate now.
     Seniors like to give their business to retailers who are compassionate, and they like to view themselves as generous. One dynamic behind this is a desire to leave behind a legacy of love. Maybe behind this, in turn, is a calculation of what will be required on the résumé submitted at the Pearly Gates.
     The increased generosity does not appear to be due to greater net worth or lower cognitive abilities as people age. And the fading of the temporal discounting applies only to charitable donations. As it comes to spending money in other ways, older adults still show a willingness to devote larger amounts when the due date is in the future than when approaching soon.
     When soliciting older potential donors, the advice to charities is to ask for the money to be contributed now, not later.
     The range of the request counts, too. In a field study based at France's ESSEC Business School, a request for a small amount increased the willingness of the person to make a donation at all, and the larger the greatest amount in the same request, the higher the eventual donation. In a solicitation containing a scale of suggested contributions, a range of $5 to $1,000 would serve better than one of $20 to $500.
     Still, there is a boundary condition to the change in temporal discounting with charitable donations: The degree of altruism levels off at about age 75 and decreases somewhat thereafter. With the older old, then, the size of donations is likely to be highest with planned giving, in which the donation is made via a trust or will which will be activated in the future.

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Monday, May 7, 2018

Charge for Online Trustworthiness

Researchers at Brandon University, University of Alberta, and Conestoga College began with curiosity about differences in retail price spreads. Specifically, why do prices for comparable items usually differ more among ecommerce than among brick-and-mortar (B&M) channels? It would seem that because of the greater ease of price comparisons online, there would be less dispersion. But from three months of data collection, the researchers verified greater price spread for the ecommerce vendors on product categories such as batteries, flash drives, toys, espresso makers, vacuum cleaners, and TVs.
     The data collection also provided two explanations: First, because there are more online than offline sites available to the shopper, there are simply more opportunities for different mixes of prices, quality, and services. Second, consumers pay more attention to the reputation of the retailer when purchasing online than when purchasing at a shop. Ecommerce is considered to be riskier, principally because of the increased chances of consumer fraud and data security breaches. Retailers differ in a perceived reputation for trustworthiness. This opens opportunities to reputable ecommerce retailers who can charge because of their online trustworthiness.
     Such trustworthiness is enhanced when an ecommerce retailer has a B&M presence. Researchers from Florida State University, Saint Mary’s College of California, York University, and Lieberman Research Worldwide have shown how differences between ecommerce sales with or without a B&M partner are especially high for unknown retailers. Sales are higher even when the B&M store is physically distant from the shopper rather than across town. If consumers know you have an actual store, not just a virtual one, they trust you more.
     Although your earned trustworthiness enables you to set higher prices, remember how sales increase with promotional discounts. But do you maintain the same everyday pricing and same special pricing in both the online and offline channels?
     Researchers at Katholieke Universiteit Leuven analyzed retail situations in which a promotional discount was offered in one of the channels, but not the other. As common sense predicts, shoppers who were aware of the difference in pricing moved their purchases away from the channel which maintained the regular price and toward the one offering the discount.
     What these research findings did add to our common sense notions was the finding that the cross-channel cannibalization effect was stronger when the discount was online. Internet specials ate away at storefront sales revenues more than storefront specials ate away at internet sales revenues.

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Thursday, May 3, 2018

Vaccinate to Encourage Seniors’ Vaccinating

A technique, both highly influential and broadly underused, to encourage elderly adults to protect themselves against vaccination preventable diseases (VPDs) is for those working with the elderly adults to stay current on their own vaccinations. This is according to a review of the status of vaccinations among seniors which was led by researchers at GSK in Belgium and included collaborators from Austria, Canada, Italy, Japan, the Netherlands, Switzerland, and the U.S.
     Keeping current with vaccinations is especially important for seniors because as we age, our immune system becomes less effective at generating the antibodies afterwards. Using a vaccine with higher doses of the antigen does not overcome the problem. A regimen of more frequent vaccinations can.
     But seniors themselves and the health care professionals serving seniors are not sufficiently conscientious about following the regimen. As a consequence, in the U.S. for instance, about 99% of deaths from VPDs are among adults aged 60 years and above.
     The researchers found that one significant reason health care professionals are not monitoring the adherence is the health care professionals aren’t convinced of the value of vaccinations among the elderly. Contributing to this might be those reports that the immune system response of seniors is compromised.
     However, studies have also discovered that if public health programs place a special emphasis on seniors getting vaccinated, this has the ironic side effect of indicating to the health care professionals, who are generally younger adults, that vaccinations are relatively less important for them. Yet modeling is an influential tool for persuasion agents. Our customers, clients, and patients will place more trust in what we recommend when we ourselves are following those recommendations which apply to us.
     As in other realms of selling to the consumer, expertise is earned. Patients might not expect you to know everything, but they do expect you to get the answer when you don't know and to do a personal handoff to another expert as necessary.
     A touch of humility actually makes it more likely you’ll be accepted as an expert. Avoid coming across to the customer as absolutely certain in the recommendations you're making. A bit of uncertainty makes the patient more comfortable asking questions. For instance, concerns about the safety of vaccinations are common. Those questions are highly valuable when you’re facilitating the sale. You can present counterarguments or steer the consumer toward alternatives which will better fit their preferences.

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

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