Monday, November 30, 2009

Assess if Your Training Is Worthwhile

Before you send a staff member to a back room in your store or to a hotel meeting room somewhere to go through a training program, have the staff member set objectives for the training. What skills do they want to build? What questions do they want to be sure to get answered?
Then when they come back from the training, ask them what skills they did build and what questions they did get answered.
Do the same sorts of things with training you go through and with each business book you read. Here's what Making Money Is Not Illegal, Immoral or Fattening has to say about that:
"When you're done reading this book, how will you decide if it's been time well spent? Number one, decide if you know more than you did before. Number two, are you doing things differently? Maybe not a whole bunch of things to start, but at least a few things. Will you do hundreds of things differently? No, you're not. I would never expect you to. I can't. I read an entire book, and I get one, two, three nuggets.
"That's why so few retailers read books on how to improve their businesses. It's because they don't see value in the entire book. Value in the entire book? I read an entire book, and all I want is one good idea because that's all I can deal with. Otherwise, I'm going to forget the rest of the stuff. So please do just a few things differently. Do them well, and that will make the time you've spent reading this book worthwhile.
"But the real test is this: When you take action, at the end of the day, do you make more money? If we can't make you more money, we've wasted your time."

Sunday, November 29, 2009

Head Off Concerns About Touching Products

When customers handle products, they are more likely to buy them. However, when you push a shopper to fondle merchandise, you need to think about who will be coming along next.
     Researchers at University of Alberta, University of British Columbia, and Arizona State University verify what most of us would have predicted: Customers have less interest in an item on a rack or shelf when they're thinking about who else has touched it. They feel disgusted at the idea the product could have been contaminated by other shoppers.
     Although that finding isn't really unexpected, the researchers did discover a few details about what causes and doesn't cause the disgust: First, the closer a customer is standing to the item when it's being handled and the more people seen handling it, the more likely it is that the customer will reject the item. However, if a fair amount of time has passed since the customer sees the item was touched, the customer no longer rejects the item. Second, the disgust is worse if there is evidence of product damage, but the disgust develops even if there is no visible evidence the product has been damaged.
     Based on all this, here are a few ideas for maintaining the selling advantages of the touching while avoiding the sales-disruptive effects:
  • Adjacent to, but separate from, shelving and racks that hold the items to be purchased, have sample items that can be handled by the customer.
  • Have staff frequently refold, repackage, and re-shelve in order to remove cues of product contamination.
  • Space out items on racks and shelves rather than have them tightly stocked. Research finds this reduces fears of contamination.
  • Avoid showing pictures of people handling the product, since research finds that can be a cue which sets off disgust.

Saturday, November 28, 2009

Help Customers Personalize Gift Cards

The National Retail Federation says holiday gift card sales will once again drop from the prior year level, although not as sharply as happened between 2007 and 2008. That's disappointing, since gift cards can be good moneymakers for retailers. The shopper with a gift card is more likely to browse your aisles than is the shopper without a gift card. At the least, they become better acquainted with the scope of your merchandise selection. At best, they'll see a great many items they want, so they'll spend some of their own money in addition to the gift card allotment.
     Gift cards are the single most requested item for the holidays. More than 55% of adults say that's what they'd like. Because of the appeal of gift cards, the way to increase your sales is to find out what's getting in the way. In the NRF survey, about 22% of respondents said their main reason for not buying gift cards is because the cards are too impersonal. Let's find ways, then, to help customers personalize.
  • Individualize your gift cards and holders, with a selection of themes—such as sports and travel—a range of colors, and enough space to write a message to the recipient.
  • Involve all sales staff, not just cashiers. When a customer hesitates in selecting a gift, say, "We have gift cards available. As you look around our store, what do you think the recipient might like? You could make some suggestions in the message you write to them."

     The lessons you'll learn this holiday season in growing sales of gift cards will serve you year round. The most common occasion for gift cards is not the holidays. That's in second place. First place is birthdays and those come on every page of your retailing calendar.

Friday, November 27, 2009

Use Familiar Routines to Sell the Unfamiliar

In retailing, we're often asking customers to make changes. It might be something that seems minor, such as encouraging the shopper to try out a new brand of a familiar product type. At the other extreme, the change might require the consumer to sign up for a completely different type of product or service, such as for the first use of an Internet-capable mobile phone or for home delivery of groceries.
     Findings from researchers at New York University remind us that with all unfamiliar items, the shopper has at least a little extra trouble navigating the maze that leads up to purchase. Help the shopper get there. In ads, signage, and face-to-face selling, work in phrases like, "…the same way as with the brand you're accustomed to using…," and "…once you do this a few times, it will be as second nature to you as what you've been doing up to now…."
     To accompany the new item, have easy-to-understand instructions. Don't worry if shoppers give the instructions only a glance. For one thing, there is research showing how knowing written instructions exist can be sufficiently reassuring for the customer; they don't need to read them to feel comfortable. For another thing, we want to make it easy for the purchaser to learn how to use the product or service when they have questions later.
     Keep familiar elements in the format of the marketing and merchandising, too. Sure, when introducing a brand or product line, you can boost excitement by premiering a fresh look in your ads and in the layout of the department. But unless you're launching a completely new business format, leave enough the same so that customers don't forget who you are.
     People complete mazes most quickly when there are signposts and benchmarks they can recognize and understand.

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

Thursday, November 26, 2009

Say Thank You, Dear

In the U.S., it is Thanksgiving today, my favorite holiday of the year. This also is the week I received a handwritten note from my financial advisor. She wrote, "I am well aware of the trust and confidence you have placed in me. I take this responsibility very seriously…. Thank you for making me your financial advisor."
     I'm taking the card with me to the big Thanksgiving dinner so I can show it to all my retailer relatives.
     Wherever in the world you do business, how often do you mail handwritten notes to your customers? You can get names and addresses from loyalty program registrations, special order forms, and personal checks, you know. E-mailed thank you's are a gigantic leap over doing nothing, and a "thank you for shopping with us" is mandatory every time the customer exits your store or website. Still, in a time we're all competing for the consumer's money, time, and advocacy, the special touch, such as a handwritten note, can give you a profitable advantage.
     Then please don't stop with expressing sincere appreciation to customers. Let Thanksgiving serve as a reminder to go public with gratitude to your staff. Those on the sales floor are your face to the public. Many have had to deal with stress-filled customers' faces this year. Those in the back office have been keeping the inventory and the receipts where each is supposed to be.
     And how about a thanks to retailers you know who taught you something valuable this year? Have you already thanked them not only face-to-face, but also with a handwritten note they can show around to the family? Profits come to those who are gracious, generous, and grateful.
     Oh, yes: My heartfelt thanks to you for your interest in the RIMtailing blog and other RIM services.

Wednesday, November 25, 2009

Try Out a Few Tactics at a Time

On this RIMtailing blog, I share an abundance of ideas with you each month. Sometimes it might seem like much too much for you to use. The answer is to think about each of the ideas and decide which ones look most promising. Try those out a few tactics at a time. Next, keep what works well for you and either adapt or discard the others. You can then add a few more tactics to the mix.
Leaving retailers with a feeling of too many ideas also concerned Art Freedman and me when we wrote Making Money Is Not Illegal, Immoral or Fattening. Here's what Art says on page 7 of the book:
"I've lots of ideas to share, and I realize this can be overwhelming. Some of you will say this is so much stuff. So I want to set your mind at ease a little bit. I look at this as an opportunity to get a few nuggets for your business. Not a thousand nuggets, not a hundred. I'd like you to take maybe three things away to start. I'm only asking you to come away with three tactics, three things you're going to do when you get back to overseeing your business.
"Still, when you read what I'm telling you here, you might think at first that I'm a complete idiot. But what I'm going to ask you to do is to suspend judgment until you think about and then maybe try out the nuggets. Would you just think about it before you say it's a stupid idea? Think about how it is relevant to your business or not relevant to your business. Talk to some of the people who are in your store. Then make an informed decision about which ones to do. Then do them."

Tuesday, November 24, 2009

Be Clear What You Mean by Going Green

Many retailers adopt environmentally-friendly practices in hopes of achieving business advantages. But going green will lead to misunderstandings with your customers if they expect more than you're willing to do. This can produce public anger instead of good will. The public feels you're claiming credentials you don't deserve.
     Be clear with yourself and with your target markets about what you mean by going green. Along with this, be clear within your business about why you're doing it. Is it to contribute good without expecting any profit in return? Is it to win admiration from your customers so they'll buy more from you? Is it to earn good will with planning commissions so you can build new stores or gain permission to expand your current store?
     If it is to impress others, realize it will take a period of time to get the word out. Consider what has happened to McDonald's Corporation. Most objective observers would agree that the world's largest fast food chain does have the credentials to claim friendliness to the environment. They're at rank 22 on the Newsweek Magazine 2009 "Greenest Companies in America" list.
     Even with all that, the food retailer continues to draw criticism for not showing sufficient social consciousness. It seems to me that people are confusing overall social consciousness with specific environmentalism.
     This week's response from McDonald's Corporation has been to announce that they're redoing the décor for about 100 of their restaurants in Germany. The change is from a red backdrop to a green interior. The objective, says McDonald's, is to dramatize their commitment to the environment. Trouble is, they've already been changing from red toward green and issuing press releases since at least 2003.
     Recognize the publicity advantages from going green, but realize it might take years to fully achieve those advantages.

Monday, November 23, 2009

Tell Positive Stories About Your Products

Shall I tell you a story or show you a chart? A set of researchers at Ohio State University wanted to compare the effectiveness of narratives and statistics in influencing consumers' opinions. In one study, they asked participants to estimate how likely it is that a refrigerator they might purchase would break down at some point. Before stating the estimate, each participant was told they'd be given information to help them with the task. For one group, the information consisted of stories told by consumers about the times they'd had to deal with a refrigerator breaking down. Participants in the other group were given actual statistics about the frequency of appliance breakdowns.
     Frequency estimates from the group who were told just the stories averaged about one-third higher than did the estimates from the group given just the statistics. The stories of trouble led the consumers to exaggerate the actual frequency of trouble. Narratives are more influential—and more memorable—than numbers.
     You don't want negative stories about your store's products to be leading shoppers to exaggerate the negative. To counteract the exaggeration, work with your staff to maintain an up-to-date collection of positive true tales based on the experiences of staff and shoppers. Having these stories is especially useful for new employees, since they might not know the products well enough to confidently recommend them to customers. In fact, the stories can become a part of the employee orientation.
     Shoppers do want charts, tables, and numbers. Research at University of Chicago and Shanghai Jiao Tong University in China found that consumers like to be shown product specifications, even though they often don't use the specifications to full advantage in making their purchase decisions.
     Give shoppers the specifications they want, but lock in the evidence of product advantages with good stories.

Sunday, November 22, 2009

Make Your Shoppers Feel Smart

Sy Syms's recent death gives us in retailing an opportunity to remember the value of treating our shoppers as smart and helping them to feel smart. At the time of Sy's death, the company was operating thirty Syms stores in thirteen states. For about 35 years, his TV commercials had told viewers that, "an educated consumer is our best customer."
     His discounting policy for women's dresses certainly kept the customers informed. Stamped on the back of each price ticket was the date the item had been placed on the sales floor, and stamped on the front was a series of dollar amounts in descending order. Every ten selling days, the price would move to the next lower amount on the ticket. No hidden surprises there.
     But the Syms business model was also a point of controversy. A 1985 article in Forbes said that contrary to what the motto suggested, the stores did, in fact, mislead consumers by putting the brand names of top quality merchandise on items of much lesser quality under less than honorable agreements with the manufacturers. Syms contracted with top brands to produce special versions of their products for sale in Syms stores. Syms promised to not put brand names in advertising and to snip off labels at the point of sale.
     Rather than decide the degree to which Syms honored the motto, let's focus on honoring it ourselves. Every retailer is tempted from time to time to withhold information from customers in order to gain an advantage. The lesson from Sy's motto is that trying to keep the shopper stupid ends up in the long term with the shopper thinking the retailer is trying to make them feel stupid. Nobody wants to give their money to a retailer like that.
     Instead, make your shoppers feel smart.

Saturday, November 21, 2009

Move the Customer to Accept Higher Prices

To decide if a price is high or low, shoppers will set in their mind an anchor for what they consider to be a medium price. Often, the shopper does this subconsciously. If it is to our benefit and the benefit of the customer to have the customer purchase a higher-priced item in the product or service category, move the anchor point higher:
  • With product categories like linens where there are many brands and many choices from each brand, group items with similar features together rather than grouping items from the same brand together. Stanford University researchers found that shoppers exposed to feature-based groupings were less likely to want to purchase lower-priced items.
  • Introduce a higher-priced version of the product. Some of those same Stanford University researchers found that when a higher-priced alternative is added to the list of choices, the alternatives which cost less become more attractive to the shopper. Soon after retailer Williams-Sonoma added a $400 bread-making machine to their merchandise line, sales of the $275 unit doubled.
  • When presenting prices to the customer, start with the highest and end with the lowest. Researchers at Hong Kong University of Science and Technology had participants rank prices of hotel rooms. Some were asked to rank from highest to lowest. Others were asked to rank the prices from lowest to highest. After completing the task, participants were asked to say how much they'd pay for a hotel room. Those who had ranked prices from highest to lowest were willing to pay an average of $19 more than were those in the lowest-to-highest group. The first group also estimated the average price of a hotel room to be higher.

     These work best when the shopper is busy and is taking lots of information into consideration before buying.

Friday, November 20, 2009

Turn Competitors into Partners

In Making Money Is Not Illegal, Immoral or Fattening, my coauthor Art Freedman describes how a group of owners of Ace Hardware stores changed from viewing themselves as competing for customers to viewing themselves as partners. Here's a reminder of that story, which you can read in full starting on page 5 of the book:
"There are actually 58 of us, and we work very, very closely together. I'll tell you what brought us together, and I'll tell you when it brought us together. In the 1990's, Home Depot was hammering away at us. They were absolutely killing us, and what brings independent hardware dealers together? Fear. We were scared to death of what was going on. The independents were disappearing, the True Values were disappearing, we had some of our own stores disappearing, and we didn't know what was going to happen.
"So we came together. It was a Friday afternoon. There were eleven of us in that room. We sat around the table, and by the way, most of those eleven people who sat together at that table are still very close, very good friends, even these many years later. We sat together and looked at each other and said, 'What are we going to do?' Then we started marketing together, we started doing all of our advertising together, we started trading information together, and it really was clearly us against them. This is the day we went from being competitors to being partners.
"We've done better than many others. Ace Hardware Corporation has been very good at wholesale and good at helping their retailers at retail, but Ace retailers had been falling off the earth every single day. Our coming together in the Sacramento area worked tremendously for us, and maybe it could work tremendously for you."

Thursday, November 19, 2009

Slow Switching by Asking About Prior Choices

Most shoppers are tempted to switch brands and locations from time to time for no reason other than that all people seek variety. If we want to introduce the customer to a new brand in a category, their interest in switching is fine with us.
     However, if the brand the customer has been buying delivers good value for the customer and the best profits for us, we'd prefer to at least delay the brand switching, even if we can't completely eliminate it. And if the drive for variety consists of the customer switching their spending to a store other than ours, we'd like to do our best to stomp out that foolish idea.
     Research findings from Carnegie Mellon University, University of Minnesota, and New York University suggest that we can slow down switching by encouraging variety-seeking customers to think about other alternatives they've already tried.
  • If the shopper talks about purchasing a different brand "to break out of my routine," we could ask, "What are some of the other brands you've used in the past, and what convinced you to start using the brand you're using now?"
  • If the customer is talking about holding off on a purchase so they can try out a store that opened recently in the area, we could ask, "What are some of the stores you've shopped at before or in addition to shopping here, and what about our store keeps you coming back?"
     This technique is an example of how what we do might make us money for a combination of reasons. The customer's answers to these questions not only provide "virtual variety," but also give us the chance to find out what is important to this individual shopper and then use this information to make our case for the shopper forgetting about switching.

Wednesday, November 18, 2009

Start Your Shoppers Feeling Yes

A while back, my sister Enid showed up at the doctor's office for a sigmoidoscopy. As Enid checked in, the clerk asked for identification. Enid handed over her health plan card. "I also need a picture ID," said the clerk. "You mean," asked Enid as she produced her driver's license, "there are actually people who try to sneak in here to have a two-and-a-half-foot tube with a video camera and set of clippers run up their rear end?"
     If it weren't for the value of a sigmoidoscopy in heading off colon cancer, we'd find it easy to say no to doing it. Even realizing its value, too many people say no. That's a major league version of the ways in which retail store customers might resist saying yes to purchases that would be of great value to them. They say no because the purchases involve expense, bother, or risk.
     Maybe there's a way to help with this. A way that involves a large body part at the other extreme from the rear end. Consider please what happened when I went in to sign the authorization for my own upcoming screening sigmoidoscopy. Unlike many permission slips I've read, this one was written in three columns on the sheet. As I read from top to bottom to top through the columns, I realized I was slowly nodding my head. That reminded me of findings from a University of Amsterdam study. People who were induced to nod their heads up and down would then think more positively about purchase alternatives than those who had not done the pre-evaluation nodding.
     This works only with shoppers from cultures that associate nodding with agreement. With those shoppers, spiral in on the sale by asking the right questions and nodding your own head to generate feelings of yes.

Tuesday, November 17, 2009

Consider Publicizing Your Rascal Image

How would you explain the unexpected outcome of that auction held at the Sheraton New York Hotel and Towers in Manhattan November 14? News about the auction was in all the papers. It's the one where items seized from convicted swindler Bernie Madoff and his wife by the United States Marshals Service went on the block. A blue Mets jacket, looking very much the same as many other blue Mets jackets, sold for $14,500. A pair of earrings for which the maximum expected bid was $9,800 actually sold for $70,000.
     There are retailing lessons in the entire Madoff episode. For instance, a St. Louis businessman who successfully bid on bracelets for his granddaughters said his message to go along with the gift will be, "If it's too good to be true, it's not right." Remember that epigram when dealing with your vendors.
     Another set of lessons applies to publicity. Oscar Wilde, the Irish poet and playwright, wrote, "There is only one thing worse than being talked about, and that is not being talked about." My explanation for the unexpectedly high bids on the Madoff items is that especially in individualistic cultures like the U.S., consumers are fascinated with famous rascals.
     When the retail personality you aim for includes "exciting" and your target markets include people from individualistic cultures, publicize how your business tests the limits. Tell people about your rascal retailing image.
     Still, there are limits on our fascination with testing limits. In general, consumers prefer not to think about conducting retail transactions with convicted criminals. One of the items that did not fetch more than was expected in last Saturday's auction was a Rolex watch which got its nickname because it was sold on credit to a British POW during World War II. The nickname was "The Prisoner Watch."

Monday, November 16, 2009

Deal with Compulsive Shopping Disorder

Does your store take measures to help customers who suffer disabilities? How about accommodating wheelchairs and holding special shopping events for people with intellectual impairments? Well, what if the disability consists of a compelling urge to keep on buying products or services in self-destructive ways? That problem is called Compulsive Shopping Disorder.
     People with CSD tell researchers things like, "It's not that I want it, because sometimes I'll just buy it and I'll think, 'Ugh, another sweatshirt.'" and "I couldn't tell you what I bought or where I bought it. It was like I was on automatic." Does it sound like an addiction? You see, people with the disorder often recognize something's terribly wrong with them.
     Compared to your other customers, they are less likely to pay their bills and more likely to return items. Those are a couple of the reasons retailers should care about CSD. In addition, there are mental health professionals who want CSD to be added to the American Psychiatric Association's Diagnostic and Statistical Manual (DSM). If this happens, the legal obligations for retailers might increase. Think about how judges have held bars responsible for keeping patrons from drinking alcohol to excess and how Harrah's casinos post notices reading " Gambling Problem? Call 1-800-522-4700."
     I'd never suggest to a retailer that they refuse to sell an item to a customer because the retailer suspects the person has CSD. But I would suggest that you and your staff refrain from sales pressure on customers who seem to be struggling to keep from buying while they're emotionally upset.
     Have I convinced you to think about ways to handle customers who show signs of CSD? Okay then, let's move on to DSM diagnosis 312.32, Kleptomania, characterized by, "the recurrent failure to resist impulses to steal items…." The poor dears.

Sunday, November 15, 2009

Have the Right People in Place

Art Freedman and I were very fortunate to have the foreword to our book, Making Money Is Not Illegal, Immoral or Fattening, written by Murray Armstrong, the president of Ace Hardware International. In what he wrote for the book, Murray brought some lessons he'd learned from others:
"I like the writings of Jack Welch, former chairman and CEO of General Electric, because of his practical, no-nonsense approach to business. He shows us how sticking to the fundamentals is important. He reminds us that one of the top fundamentals is the people. Art Freedman says, 'The older I get, the less I need to know and the more I need to know who does know.' Jack Welch wrote, 'My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people.' Then Mr. Welch added, 'Of course, I had to pull out some weeds, too.'
"Have the right people in place and see that those people have the right resources to do their jobs. In his best-selling book, Good to Great, organizational researcher Jim Collins wrote about 'getting the right people on the bus.' In retailing, we must have the right people and manage to their strengths.
"This means having enough people. Retailers always want to keep down headcounts because staffing is such a large part of expenses. But you cannot shrink yourself to greatness. In tough times, you need to take a couple of steps backwards, but be sure that over time you always keep still moving forward."
Murray then finishes his foreword with words to reinforce the book's finish and, as it happens, what I might say about this RIMtailing blog: "Allow me to send you on by saying, 'Go to it now and start reading about how to make more money.'"

Saturday, November 14, 2009

Market to Seniors, not to Elderly

You'll be marketing to older consumers. Even retailers of toys designed for young children recognize it's the grandparents who pull out the credit cards.
     There are broad differences in the abilities, living circumstances, and consumption habits among older consumers. AARP maintains three editions of their major periodicals: One for members ages 50-59, one for members 60-69, and the third for members at least 70 years old.
     Still, there appears to be broad agreement in what older people in your target market will be comfortable being called. Researchers at Ghent University and Vlerick Leuven Gent Management School in Belgium had a range of consumers, all at least age 40, evaluate the attractiveness of five names for them: elderly, 50+, senior, retired, and third age. This last label is seen in uses such as the Third Age Foundation, in which childhood is considered to be the first age and the second age covers family and career.
     The research participants were quite comfortable with older consumers being called 50+, senior, or retired. Any of these three would be good for you to use in advertising, signage, product packaging, and personal selling addressed to this important target market.
     However, there is an important exception to this: Respondents who were nearing age 50 or retirement didn't like any of the names as much as did people who had been in the group for a while. We hate to give up our thoughts of youth, even when the youth is middle age.
     Not surprisingly, respondents didn't like "elderly." Also playing to negative reviews was "third age." Maybe that's because it sounds like something out of a J. R. R. Tolkien book. Hmm, actually that is one place we'll find the term. It was the 3,021 years of the waning of the elves. Who would want that?

Friday, November 13, 2009

Go for Customer Gratitude and Guilt

We'd like to build emotional connections with our customers. And if we need to choose among emotions, go for gratitude over happy. It's more profitable to have our customers grateful to us for what we're doing for them than happy about the shopping experience. Research at Università Commerciale Luigi Bocconi in Milan, Italy looked at relationships between six emotions and what the shopper with those emotions did after completion of the purchase.
     The six emotions were anger, gratitude, guilt, happiness, pride, and sadness. The four behaviors were complaining to the retailer, criticizing the retailer when talking to other people (negative word of mouth), expressing an intention to make a future purchase, and praising the retailer when talking to other people (positive word of mouth).
     The greater the extent to which customers said they felt grateful to the retailer for helping to solve a problem or satisfy a need, the more likely the customer was to praise the retailer to others and to say they intended to shop with that retailer again. In the study, there was no significant relationship between customer happiness and either positive word of mouth or repurchase intention.
     Another set of findings had to do with the guilt expressed by a dissatisfied customer. Here, guilt could mean at least two things. First, the person was taking responsibility for the disappointment with the product or service. Second, the person felt badly about making a fuss since they felt obliged to the retailer for what the retailer had done. So it's no surprise that as guilt increased, the amount of complaining and negative word of mouth dipped.
     The lesson for retailers is to go beyond having a satisfied customer. Through our heartfelt, individualized customer service, implant in each shopper a sense that they owe us for what we've done.

Thursday, November 12, 2009

Help Customers Show Off New Products

Ready for your quiz question? Okay, here's the situation: Some British researchers noticed a gender difference in where customers keep their cell phones while sitting in a club. Women are much more likely than men to take out their phone from purse or pocket only when they are ready to use the phone. On the other hand, men are much more likely to place their cell phone in a highly visible location soon after sitting down.
     The researchers figured that the men were placing their phones on the bar or table because they wanted to show off to others that they possessed the latest and greatest model. But to whom were the men interested in showing it off? The women? The other men? Both?
     Here's your question: Which one of these four caused the greatest jump in how often the men would take out their cell phones, put them on the bar or table, and begin toying with them, even when not placing calls?

A. As the number of men in the area increased.
B. As the number of women increased.
C. As the percentage of men compared to women increased.
D. As the percentage of women compared to men increased.

     The correct answer? The third choice. Was the picture of the peacock too big a hint? It appeared that the men were preening with their cell phones to disarm the competition in the same way that male peacocks pump up the strutting and feather preening when there are at least a few females around and then a bunch of other males come by.
     What's this all mean for you? If you want to sell your customers the latest and greatest, there's an advantage in you stocking items with a distinctive design easily recognizable even in a dimly lit club.

Wednesday, November 11, 2009

Use Psychology for Shopper Crowd Management

What a dream to have more shoppers rushing into your store than you ever thought possible! But how quickly that dream can turn into a nightmare. Do you recall how Wal-Mart worker Jdimytai Damour was trampled to death by Black Friday shoppers while attending the front doors at the Valley Stream, New York store? Or how customers at a Burlington Coat Factory store in Ohio looted and destroyed merchandise when they learned that a woman's offer of free merchandise was a hoax?
     Understand the psychology of crowds as part of preparing for having people fill your aisles when you hold Black Friday sales, limited quantity sales, celebrity appearances, releases of new video games, and similar events:
  • If shoppers will be waiting in line to enter the store or department, have store staff wearing name tags talk to the shoppers. Invite those in line to fill out a sweepstakes form with their name and other identifying information. Because they lose some of their individual identity and therefore their sense of individual responsibility, people in crowds are driven to actions they would not take otherwise. Name-to-name contact can head this off.
  • Distribute the special items throughout the shopping area. Your objective is to scatter out any crowding. When people are in crowds that they'd prefer to avoid, they get more likely to panic and strike out in violent ways.
     There are other actions you might think would work well, but could backfire:
  • Should you have uniformed security guards? Some people in crowds become less anxious and more responsible when they see staff in police-style uniforms. However, other people get agitated and angry.
  • Should you extend the hours of the event? Maybe, but within limits. Extend them too much and you lose the excitement which drives buying.

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

Tuesday, November 10, 2009

Use Store Photos to Inspire Improvements

Here's some advice from Art Freedman about an activity that can start out as fun and end up making you lots of money:
"If you want to have some fun one day, take a camera and walk through your store. Just start shooting photographs of your store. Shoot a lot of them. Load them up on your computer, and sit in front of your computer with your staff, and ask, 'What do you see? Where are our opportunities? What does our store look like?' Sit there and find ways to make your store better.
"If you intend to sell a lot of paint, what does your paint department look like? As you look at the photos, and as you walk by the paint department itself, how are you making it inviting for the customers to come there and buy? Do you want your end caps to be signed? Do you want the end caps to be full? What do you want the end caps to look like? What do you want the main aisle to look like? What do you want the impulse areas at the registers to look like? What do you want your store front to look like?
"Take those picture and look carefully at them with your managers and your floor staff, because what you see is what you are going to get. If you want it to be different, then have it look different. What do you want all your aisles to look like? Is the store merchandised in a way that shows off the product categories in which you want to be dominant? If I looked at the photos you took in your store, would I be able to tell?"
For details, start on page 91 of Making Money Is Not Illegal, Immoral or Fattening.

Monday, November 9, 2009

Shock Shoppers, But End Happily

A few years ago, Volkswagen kicked off a marketing campaign centered on two TV ads designed to shock viewers. In one ad, the TV viewer seems to be inside a Jetta as the driver chats with a passenger. Suddenly, a truck crashes into the car so severely that air bags inflate and the passenger's head is thrust into the airbag. In the other ad, the perspective is again from inside the Jetta as two couples discuss a movie, and again a truck suddenly comes crashing into the car. Viewers see the passengers shaken up, but uninjured. Each ad ends with "Safe Happens" flashing onto the screen.
     The impetus for the campaign was the 2006 Jetta's top scores in federal crash tests. The crashes were real, with stunt actors inside the cars. According to Volkswagen, the outcome of the campaign was positive, with the ads causing consumers to get more interested in buying a Jetta.
     The ads caused many consumers to do something else, too. Some contacted Volkswagen to ask if any of the actors were actually injured. These people were worried. And some consumers flocked to a website set up by Volkswagen as part of the campaign. On the website, people could recreate or customize their own crash. These consumers were fascinated.
     Those two reactions are quite different. Still, I would not be at all surprised if a number of the people who found out the actors were okay would end up playing the online crash game, and some of those who played the game repeatedly would start wondering if the actors came out of the crashes safe and sound.
     Shocking ads can pay off. Two tips: First, be sure the cause for the shock is justified. Second, give viewers of the ads ways to feel good after the shock.

Sunday, November 8, 2009

Adapt Lessons from Other Retailers

Learn from other retailers, even from retailers selling product lines quite different from what you sell. In fact, some of the most useful lessons can come from the hits and misses of retailers who sell to the same sorts of markets as you, but sell those people different product lines. By quickly adapting the lessons to apply to your merchandise mix, you can gain an early-start advantage over your competitors.
     For instance, what can you learn from shoe retailers? U.S. shoe sales have been markedly strong for the past three months. October 2009 sales were almost 8% above October 2008 sales. By analyzing why, you might come up with actions like these to build your own profits, whether or not you sell shoes:
  • Make it easy to be distinctive. Shoppers are yearning to express themselves. When it comes to fashion, it's relatively easy and inexpensive to make a statement with your own collection of distinctive shoes. How can you merchandise your store to help shoppers be distinctive in relatively easy, inexpensive ways?
  • Remind shoppers of the practical advantages. These days, consumers are suffering from frugality fatigue. They're ready to spend money, but not a lot and only if they're convinced of practical advantages. Shoe shoppers are going for durability and for multiuse capability. What practical advantages of your indulgent products can you sincerely present to shoppers to help them reduce resistances to purchase?
  • Feature the feel-good. You might not be able to top the Cinderella magic of shoes if you're selling power saws or electric toothbrushes. But you can come close. Power saws give a sense of mastery and toothbrushes, protection from decay and bad breath. What happiness will each purchase bring?

     Well, are you convinced you can profit from walking in the shoes of other retailers?

Saturday, November 7, 2009

Avoid Locking In Bad Moods

Compared to customers who enter your store in a good mood, a customer who enters in a bad mood is less likely to buy items beyond just what they came in for.
     The mother who comes in for supplies for a sick child is worried, and that worry is one of the reasons the woman will purchase only what's on her list and rush off.
     The home handyman frustrated by a repair gone awry comes into your store on a mission, not interested in browsing.
     It's important to provide these customers with signage and staff to get them right to the desired products and then have quick checkout service to get them on their way. Maybe they'll want some conversation to help them feel better. If so, we'll give a listen to the degree we can. But unless they show an interest in chatting, we won't do much talking beyond sincerely thanking them for their business. If they ask for advice, we'll provide it succinctly.
     We do this because we know they're in a hurry. But with customers in a bad mood, keeping it brief works for another reason as well: Findings from research at University of Maryland and Yale University indicate that too much talking will lock into the shopper's mind the bad feelings they're experiencing, and those negative memories make it less likely they'll buy from us in the future.
     When the shopping experience itself has been responsible for the customer's bad mood, we want to ask questions to find out how to make things right. We then take action, and the customer leaves in good spirits. But when the customer comes into our store already sad, mad, or in other ways not glad, and it wasn't our doing, we don't want to lock in those bad feelings.

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

Friday, November 6, 2009

Peddle Unfamiliar Brands Using Contributions

The holiday season brings out in people a spirit of giving. That's true for both retailers and consumers, so how about teaming up with your customers to contribute to one or more charitable causes?
     You'll gain a profitability in spirit. At the same time, there's nothing wrong with doing this in a way that also yields the highest financial profitability. Consider research findings from University of South Florida which indicate that pairing charitable contributions with the sale of brands unfamiliar to the customer will boost sales of those unfamiliar brands. The research finds that the boost is not nearly as great when it comes to brands already familiar to the shopper.
     There are all sorts of reasons you might want to introduce a new brand to your shoppers: Higher margins from house brands. Better deals from the suppliers. Do recall that there's more to introducing a new brand than pairing it with a charitable contribution. Most importantly, prospective purchasers will want to know how the unfamiliar brand compares and contrasts with the well-known brands. But an alliance of brand purchase with helping a noble cause can move sales beyond what they'd be otherwise.
     Now which of the many noble causes should you select? Ones which have a logical fit with the product category? Selling a new brand of shoes and contributing some of the profits to an orthopedic hospital? Selling an unfamiliar brand of bras and contributing some sales dollars to the American Cancer Society?
     The answer is it doesn't really matter. The University of South Florida research found that, contrary to what many retailers would guess, there is no added boost from having a logical relationship between the product category and the cause supported by the contribution. What counts is that you select a cause important to your customers.

Thursday, November 5, 2009

Distribute "Yes, We Can" forms

It is much better to say yes than to say no to a customer. So every time you or one of your staff ends up saying no to a customer's request, look into what happened to see if you might want to make some changes in the way you do things. Here's some of what we say about this in our book, Making Money Is Not Illegal, Immoral or Fattening.
"Whenever one of your store staff does in fact need to say no to a customer after checking with at least one other person, how do you know it? How do you get the valuable feedback like that so you can improve your business and increase your profitability? Ask the employee to write it down and then give the form to the store manager. That's all we require them to do. We don't challenge the employee on it. Once we chew somebody out because they filled out one of those forms, they'll never fill out another one in their life. If they pick up one of those forms because they said no, but the correct answer is yes, that points out a training and coaching need.
"If you take this seriously, you will find out your people are saying no for things where the correct answer is yes. You'll also find out that your customers are asking for products that you're not aware that they're asking for. You'll find out that there are services you could be offering in your market that the customers want you to do, and you just don't know about it."
There's more starting on page 98 of the book.

Wednesday, November 4, 2009

Use Parity Pricing to Help Customers Decide

Have you ever noticed how restaurants will offer a set of dessert choices, all at the same price? What's going on? Well, those restaurants are making use of consumer psychology:
     Many diners hesitate ordering dessert. They feel full from having just completed their meal. They know desserts are a danger to diets. But if truth be told, they're hankering for dessert to the point of looking for an excuse to order it. Here's where the fixed price menu comes in. As research at Northwestern University confirms, consumers are more likely to purchase certain types of items when presented with a group of similar alternatives all at the same price. The reason is that parity pricing—which is what this is called—eases the decision process.
     This technique is used with much more than desserts. Although the price fixe menu with alternatives for each course is more common in Europe than in North America, price fixe in the form of parity pricing is seen in at least a few restaurants everywhere you go in the world. What's of more use to you, though, for what you sell beyond restaurant menu items is that parity pricing significantly facilitates sales of many sorts of products and services.
     But only under specific circumstances. Parity pricing is most effective as a selling technique with items where the prospective buyer considers the purchase to be particularly risky. That might be because the buyer believes the price to be high, which involves financial risk.
     However, if the purchaser is aiming to get a distinctively expensive item—such as to show off to others or to feel indulgent—parity pricing can be downright frustrating. In the current retailing environment, where frugality is honored over frivolity and shoppers hesitate spending money, parity pricing could help ease your shoppers' indecisiveness.

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

Tuesday, November 3, 2009

Explain Price Ups & Downs to Customers

When your shoppers see a price increase these days, they are more likely than usual to assume you're being greedy. Price cuts are a fact of life throughout retailing now. Neiman Marcus, whose CEO bragged in 2005 about the chain's nonstop adherence to "full-price selling," seems to be holding nonstop sales promotions in 2009. Last September, the world's largest consumer products maker—Procter & Gamble—finally gave up after months of resistance and announced price cuts across 10% of its worldwide product lines, pressuring retailers to pass on the reductions to their customers. In this atmosphere of falling prices, shoppers get highly suspicious when they see prices going up.
     Therefore, if you find it necessary to raise prices to keep your business thriving, be ready to explain the reasons to customers. Research at University of Pennsylvania and University of Florida concludes that the explanations most likely to head off customer anger center on the cost of goods to the retailer from the supplier. This means that when selecting the products for which you'll nudge prices upwards, look at ones where there have indeed been increases in supplier charges. The researchers also found that customer anger is most likely when the retailer's explanations for increases in product costs are in terms of services costs, such as transportation or insurance.
     Also explain price decreases to customers. You got a good deal on a large purchase. Or you want to motivate people to try out a new brand. Or you want to help out customers at a time you know money is tight. Be sure what you're saying is true, of course. But at some point, you'll be increasing prices again, so you want to maintain in your customers the impression that the downs as well as the ups are for good reason.

Monday, November 2, 2009

Put On Your Christmas Personality

For retailing, Christmas is at its best as a time of hope. Retailers hope for abundant sales to top off the calendar year. Customers count on fulfilled wishes to counteract winter's gloom. As we head into the holiday sales season this year, hope seems to be in less abundant supply, though, kicked off—or out—with the Halloween weekend fright of CIT Group filing for Chapter 11 bankruptcy protection. Considering that CIT has been a significant source of capital for about 2,000 vendors that supply merchandise to more than 300,000 retail stores, retailers might find themselves scrambling to line up financing to maintain adequate inventories in anticipation of springtime sales. Even retailers who don't depend at all on CIT for financing might fear the ripple effects, and fear doesn't go well with hope.
     Wait. Maybe it does. Here's your chance to put on your Christmas personality, spreading hope all around.
  • As a leader of your business, set the tone. Are you feeling hopeful? Having a positive attitude doesn't mean hiding from economic realities. But as University of Pennsylvania research has shown, we tilt the odds towards bigger store profits when we actively treat difficulties as opportunities.
  • Are you continually coaching your staff to project hope to the customers? Here's how: Express your genuine gratitude towards staff and then set achievable challenges. Research finds that optimism develops when employees are given tasks which are out of grasp, but within reach for them.
  • Pay attention to every detail. For example, Washington State University research finds that if Christmas music and Christmas scent in the store match up, customers say they like the store and merchandise better and are more likely to shop at the store. Oh, and when it comes to Christmas scent, word is you can't beat cinnamon.

Sunday, November 1, 2009

Know How Much Emotion to Deliver

When doing salesperson-to-shopper selling of products and services which appeal to tastes and fashions, consider delivering emotions. Talk about the joys the purchase will bring and how sorry a shopper will be if they miss this opportunity to buy. You'll do this because, in general, people make more purchases whenever their emotions kick in. The boost works best with positive emotions, but activating consumer emotions we think of as less pleasant—such as fear and anger—can also stimulate purchasing.
     Furthermore, people are more likely to stay highly satisfied about their purchases if they either experienced a burst of joy or a rush of relief at the time of the purchase. In fact, the overall emotion is often more important than the shopper's objective evaluation of the product's features.
     Research at University of British Columbia found that a substantial percentage of consumers said they'd chosen an item because they had the right feelings about it, not because the item came out best in any mental accounting of advantages and disadvantages. In the study, those who let themselves be led by their emotions, compared to those customers who didn't, expressed more satisfaction with their purchase both immediately afterwards and then when the researchers checked back three weeks later. These shoppers would keep their preferences and satisfaction even if they'd been told an article in Consumer Reports would have ranked their selection as less desirable than available alternatives.
     But shoppers are different. Never keep dumping emotions onto a customer who seems to be getting uncomfortable when you try it out. Research at Universidad Pùblica de Navarra in Pamplona, Spain concludes that for certain shoppers in the world, emotion sells, but for others, it's a turnoff. How to tell which is which? Monitor the extent to which your shopper uses emotion words themselves.