Sunday, February 14, 2010

Selectively Keep Information From Customers

Valentine’s Day today is a good time to remind ourselves it’s sometimes best to withhold information in a relationship. That applies not just between lovers, but also between sellers and customers. As many people on first dates could later testify, when the relationship is between potential lovers who are seller and customer at the start, the relationship can be sabotaged by letting the information gush. Don’t flood out customers with what they’d prefer not to know. Share information selectively.
     If the intent is to mislead or betray, that’s sinful. But in fact, presenting information selectively usually assists the consumer. Researchers at University of Twente (The Netherlands), University of Indiana, and University of Cincinnati set out to confuse study participants by adding to the sales pitch technical jargon, unfamiliar words, illogical product groupings, and dollar prices restated as cents. The result was that the participants chose items more quickly and with more certainty than would be in their best interests.
     Adding extra information also can build brand loyalty for trivial reasons. Researchers at Harvard Business School and Hong Kong University of Science and Technology asked consumers to select a package of rewritable compact disks. But one group of the consumers were asked before choosing to also decide how many different colors of CD cases they wanted in their package. This preliminary decision increased the probability of repurchase of the same brand from 47% to 74%.
     Keeping prices secret until the last is a classic sales technique. It’s even being selectively done now by online vendors like “To see the price, add this item to your cart.” Is the primary intent to help the consumer? Well, I guess you could argue that the technique protected Valentine’s Day shoppers from the equivalent of presenting a gift with the price tag still attached.

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