Thursday, July 28, 2016

Help Shoppers Leave with Health Left

Given the choice between items with healthy and unhealthy reputations within a product category, shoppers in a grocery store are more likely to pick the healthy ones if those items are shelved to the left of the unhealthy ones. In the same vein, if healthy items are listed in a column to the left of the page and the less healthy ones to the right on a restaurant menu, the diners become more likely than otherwise to select from the healthy items.
     Those grocery store shoppers and restaurant diners will also consume more of the healthy purchases they make if they’ve selected them from the left instead of the right.
     All this comes from a set of studies at University of South Florida. Please note that this doesn’t necessarily mean people will select and consume the healthy items to a greater extent than the unhealthy ones. Instead, the finding is that the relative preferences shift toward the healthier items. People might still prefer the unhealthy items, but it will be noticeably less often than otherwise.
     In the grocery store application, it isn’t necessary that there be two single columns of items—the more healthy column to the left of the unhealthy column. It also could work with two shelving units, the healthy items shelved in a unit to the left and the less healthy items shelved in a separate, but immediately adjacent, shelving unit on the right.
     One explanation for this “left health” effect has to do with price images. Items displayed to the right of the visual field will—all other factors equal—be estimated by shoppers to carry higher prices. Consumers familiar with the labeling on tape measures and graphs assume that numbers appearing to the right are of a higher magnitude than those appearing to the left. And with the exception of situations like announcing space launch countdowns, we count up. Those in cultures that read from left to right will, on average, mentally process an item to the right later than an item to the left, so subconsciously associate a higher number with it.
     When the healthy item is on the left, it seems like a better deal than when it’s on the right.
     Although we read from top to bottom, too, placing the healthy items above the less healthy ones on shelves or on the restaurant menu doesn’t shift the preferences as strongly, however.

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

Click below for more: 
Go Fourth in a Five-Item Horizontal Choice
Assume Higher Anchors for Right-Side Items
Offer Bonus Packs of Virtue, Discounts on Vice
Funnel Purchase Alternatives Maturely

Monday, July 25, 2016

Ask for the Sale

A shopper asks to see a particular type of item. You guide the shopper to the area where you carry the item. As soon as you arrive, the shopper looks over the merchandise, inquires about item numbers and prices, and looks ready to leave.
     Maybe this shopper wasn’t truly interested in becoming your customer. But before you give up, you ask a question: “Will you be buying this item at our store?”
     There are loads of consumer behavior studies which indicate that, in asking such a question, you influence the probability the shopper will, in fact, come back to buy the item from you. A team of researchers at University of California-Irvine, State University of New York-Albany, University of Idaho, and Washington State University reviewed more than 100 of those studies to discover the forces behind this question-behavior effect. Here’s my version of their findings, along with my suggestions of how to use the effect to make sales more likely:
  • Positive attitudes. When the salesperson is courteous and helpful, the question leads the shopper to generalize the positive impressions of the salesperson to thinking about making a purchase at the store. Strengthen this by remaining courteous and helpful even if you think there’s no chance the person will return. You could be wrong about that. 
  • Consistency. For no reason other than to avoid confrontation, shoppers are more likely to answer your question “yes” than “no” if at that point they had not intended to purchase from you. And a characteristic of human behavior is that we feel better about ourselves when there’s a thread of consistency in our behavior. So the “yes” increases the odds the shopper will actually do it. To strengthen this one, follow up the “yes” with, “I’m pleased to hear you say that, since here are a few of the advantages our store offers….” 
  • Fluency & commitment. What you see as the shopper wanting to leave may be indecisiveness, not a desire to purchase somewhere else. By asking the question and getting an answer, you free the shopper to flow closer to commitment. If the shopper answers “no,” say, “May I ask the reasons?” Then decide if the shopper is open to you dissolving the objections. 
     The research doesn’t conclude that asking the question always increases the likelihood of purchase from you. Such questioning will irritate some shoppers, making them feel trapped. Use the question-behavior effect judiciously.

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

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Go for Customer Gratitude and Guilt
Probe for Intentions in Focus Groups
Ask Shoppers for Reasons to Buy
Tell Shoppers to Be Happier

Thursday, July 21, 2016

Sell Domestic for the Health of It

Items in your store produced in the same area in which the shopper lives carry a special appeal for that shopper. There are reasons for this having to do with economic sensitivities: People like to keep the dollars for their countrymen. But a consumer behavior research team from far and wide thinks they know another big reason. The scientists’ affiliations include ISM University of Management and Economics in Lithuania, Lingnan University in Hong Kong, Sun Yat-sen University in China, and Vienna University of Economics and Business. They found that consumers consider merchandise to be more pure when it comes from domestic sources.
     The preference for domestic didn’t hold when the retailer said the item had both domestic and foreign components. You might be required by law or regulations to reveal multiple-country origins. If you don’t operate under such requirements, consider choosing to describe only the local side with items where purity is a virtue.
     Researchers at Texas State University-San Marcos, University of Wisconsin-Madison, and University of Delaware noticed how the declared country-of-origin (COO) on clothing usually is the locale of manufacture, not the locale where the fibers were produced. The researchers’ study samples consisted of consumers in three U.S. southern states. Participants were asked to decide how much more, if anything, they’d be willing to pay for a woolen sweater depending on the COO. The choices for locales of manufacture were America and China. The choices for fiber origin were Australia, America, and the particular state in which that day’s study was conducted.
     The researchers found that the consumers were willing to pay the most when the fibers were from their home state, and willing to pay more when the wool in the sweater had been grown in America rather than Australia.
     The researchers had administered to the participants a standardized inventory of ethnocentrism—the degree to which you believe your own culture is superior to others. Those with the highest ethnocentrism were those willing to pay the highest price premium for closer-to-home fiber origin.
     In applying findings to your use of COO information, recognize that what’s true for Southern consumers and wool sweaters isn’t necessarily universal. Shoppers associate certain countries of origin with desirable product characteristics. Cheeses and perfumes from France have a special cachet, as do cutlery and timepieces from Switzerland. In these cases, you’ll do best to flaunt the country of origin.

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

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Choose an Item’s Country of Origin
Lick ’Er Country-of-Origin Stereotypes
Count on County Origin If Quality’s Clear

Monday, July 18, 2016

Reward Customer Referrals with Congruency

The revenue value from a referred customer averages about 16% higher than that from a non-referred customer. This statistic is in studies at University of Pennsylvania and Goethe University Frankfurt which tracked the referral patterns and purchase behavior of 10,000 retail customers over a period of almost three years.
     It does seem clear, then, that it pays to reward your current customers for sending friends and family toward your store. But researchers at University of Kaiserslautern do find that the nature of the reward makes a difference. As you’d expect, the reward should be something the recipient considers to be of clear value rather than a trivial trinket. Equally important, the researchers say, is that the reward be compatible with the brand image of your store. A coupon for a 20% discount on store merchandise would do that. So would a personal item carrying the name of your store. Tickets to attend a concert probably wouldn’t have sufficient congruity unless your retail enterprise gives concerts. Entries in a drawing would work best if your store brand image emphasizes excitement over reliability.
     Customer referrals are especially important in retail businesses with high customer turnover. Funeral homes, landscape architects, bridal shops, and baby stores must draw a continuing stream of new prospects in order to succeed. The retailer who sells houses, refrigerators, automobiles, or a trade school education might not see the same customer for the same item often if there’s a consistent record of customer satisfaction. Do satisfy customers thoroughly, then reward each of those customers for making referrals.
     Your customers who are loyal to your store become more likely to refer others to you. And it also works the other way around: Customers who participate in a referral program become more loyal because of making the referrals.
     One study with this conclusion was conducted at University of Arizona, University of Victoria, University of Wuppertal, and University of Paderborn. The data came from customers of a global cellular telecommunications provider. The effect of program participation on customer loyalty was highest for newer customers.
     These researchers defined customer loyalty as praising the retailer and as renewing the contract with the retailer. When rewards for making referrals were relatively large, both signals of loyalty were increased by the act of referring. With relatively small rewards for referrals, defection rates went down, but degree of praise for the retailer did not change significantly.

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

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Cultivate Referred Customers
Minimize Customer Turnover

Thursday, July 14, 2016

Prevent Store Brand Sabotage

When a highly regular customer stops doing business with you, there are many possible explanations for it. Researchers at University of Bern and University of Texas-Austin say that if the reason is a clash of the former customer’s value system with their perception of your business’s current value system, you had better be careful. The result could be what the researchers call Consumer Brand Sabotage. Unless you intervene early, the CBS individual becomes willing to devote substantial efforts to harming the reputation of your store.
     The dominant motives of most dissatisfied customers are to restore a sense of fairness and vent negative emotions. But the desire to destroy your business in those ready to engage in CBS arises from feelings of being betrayed. Their relationship with your store is often a strong one, the sort described by market researchers as being closer to a love affair than a fleeting fling.
     Catalyzing the consumer’s outrage is a sense of powerlessness, and thereby lies the way to head off the destructiveness: Restore the customer’s sense of influence by asking, “What can I do to make things right?” Just being asked and listened to can prevent the active sabotage. And if the answer you get involves actions you’re not able or willing to take, you can come back with a more reasonable alternative. In this dialogue, remember that what’s at the base is a conflict in values systems, so learn about the disgruntled customer’s values.
     But wait. If the customer has stopped coming into your store, how will you be able to ask them that? Well, you do it by reaching out to regular patrons who suddenly stop showing their faces. The outreach might require some persistence. In studies at University of Western Ontario and Queens University in Kingston, Ontario, former customers who felt betrayed often experienced shame and insecurity.
     If the CBS has already begun, you’ll want to actively counter it by correcting misinformation. Take comfort, though, in another finding from the Ontario group: People can decode an unreasonable complaint. The researchers present this example of a real posting: “I used to love [that store]. Let me tell you all why I plan to never go back there again; I hate them with a passion now,….” The studies found that readers of such a posting, which talks of “hate” and “passion,” will suspect that this reviewer isn’t objectively accurate and therefore not credible.

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

Click below for more: 
Break Up with Customers Graciously
Fling Shoppers for Thrills
Analyze Patterns of Complaints
Value Cultural Values
Lead Your Customers Through Changes Gradually