Wednesday, July 22, 2009

Have Unannounced Discounts on Common Purchases

At first glance, it might seem to be really bad business to surprise a customer with an especially low price on items the shopper had already intended to buy. After all, they’ll buy the items at the price they had expected, so why give up any of the profit? But consumer behavior researchers at University of Arizona, Arizona State University, and University of Pennsylvania found that just such a practice, used with care, can end up building your profits.
     The reason is that customers who are grateful to you will buy more from you, and nothing brings out gratitude in a customer more than finding a surprisingly low price on an item the customer already had intended to buy. They’ll buy more from you over time, and they’ll also spend more than they’d originally planned to spend during the shopping trip where they found the surprise special.
     The researchers discovered evidence that what’s behind the extra purchasing is a desire to reward the merchant. It’s not just a matter of getting items at a better price. That’s why the shopping cart total goes up. And on top of all this, these shoppers become more likely to tell others about the excitement they experienced when in your store. That makes it more likely you’ll have those people coming to you as well.
     The key to doing this effectively is to maintain the element of surprise. Don’t discount most items on the person’s shopping list, and don’t stop advertising the low prices on those popular items which will draw traffic into your store. But knowing you offer surprise specials will motivate all that traffic to move up and down the aisles on a treasure hunt, and what better way than this to make shoppers aware of all the products you offer them?

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