Friday, December 31, 2010

Combat Your Competitors’ Trivial Claims

Some retailers claim an advantage based on features that are trivial or simply useless:
  • Including silk fibers in a shampoo doesn’t improve the product performance.
  • A store that guarantees to match a price on a purchase if the customer bring in a receipt for a subsequent purchase of the same item elsewhere isn’t offering the customer anything truly valuable. Making the two purchases and then returning to the first store is more trouble than it’s worth.
  • A repair service that guarantees same-day response at an extra fee could be seen as misleading consumers if almost everyone routinely gets a same-day response anyway.
     Disappointing news for the honest retailer is that such claims of worthless features do influence shoppers in important ways. University of Mannheim researchers found that a store, product, or service advertising a trivial attribute not claimed by others does become more likely to:
  • Draw the attention of the shopper to the complete selling message
  • Impress the shopper that the offering is highly distinctive or even one-of-a-kind
  • Convince the consumer to shop at the store or purchase the product or service
  • Leave the purchaser with the impression that the price paid is fair
  • Build positive attitudes toward the store and/or other products or services carrying the brand name
     What can the honest retailer do to combat the influence of trivial claims by competitors? The answer resides in why consumers react this way. It isn’t from lack of knowledge. As part of their study, the Mannheim researchers educated the consumer participants about the meaninglessness of the claims. This failed to erase the effects.
     Instead, there are two reasons for the influence of the irrelevant:
  • Information overload. Consumers are being called on to wade through an abundance of information when making a purchase decision. In these situations, shoppers’ minds take shortcuts. Nine features are better than six, even when three of them are probably useless. The answer for you, the honest retailer: Restate the six genuinely valuable features so you have a competitive list of nine.
  • Option value. Even if a feature is useless now, maybe it’ll be valuable later. The consumer is willing to pay more or to make a selection in order to preserve the option to have the feature available. The answer for honest retailers: Offer combinations of upgrades, downgrades, trade-ins, and liberal return policies.
Click below for more:
Compare Features to Ease Overload
Dislodge Indecision with New Choice
Use Dissatisfaction as a Selling Opportunity

Thursday, December 30, 2010

Get Consumers to Laugh With You, Not At You

During the 1950s, pianist Wladziu Valentino Liberace—known better to his fans as Liberace—was among the highest paid entertainers in the world. A number of music critics thoroughly panned his talents, though, and he was ridiculed for his flamboyant style.
     Liberace’s response to all this was a set of words he used in a variety of forms throughout the rest of his career. A Wikipedia article about him says he first used the phrasing in a letter to a critic. Liberace wrote, “Thank you for your very amusing review. After reading it, in fact, my brother George and I cried all the way to the bank.” Soon, Liberace made it a part of his concert performance patter. He’d talk about how his piano playing and his mannerisms were fodder for criticism, and then with a broad smile, he’d say, “I cried all the way to the bank.”
     Getting your retailing audience to laugh with you rather than at you in this way is being exemplified these days by Allstar Products Group, the manufacturer and marketer of the Snuggie—that blanket with sleeves. The first generation of TV ads for the Snuggie masterfully explained, in a straightforward way, the benefits of the product: “The ultra soft fleece keeps you totally warm, and the sleeves keep your hands free.” But, as a recent New York Times article points out, the outlandish appearance of a person wearing a blanket promptly led to a seemingly endless procession of jokes and parodies.
     The impetus for the current NYT article was a realization that the Snuggie has turned this ridicule to advantage: The latest crop of Snuggie ads, introduced for the 2010 holiday season, show people joining in the fun with broad smiles on their faces, looking as silly and as warm as ever.
     Being able to laugh at yourself shows a humility that most shoppers find attractive. In many cultures, such as Latino and Japanese, ridiculing a retailer or product that competes with yours is considered offensive. Here, you’re ridiculing yourself. Humor usually relaxes tensions and lifts spirits, both of which enhance the desire to finalize the purchase.
     Keep the humor fresh, though. Liberace did. After years of using his line, he had an appearance on “The Tonight Show.” Liberace exploited the opportunity to add a twist: “I don’t cry all the way to the bank anymore,” he said. Why? “I bought the bank.”

Click below for more:
Joke Around to Facilitate the Sale
Use Humor in Unexpected Ways

Wednesday, December 29, 2010

Go Beyond Retention with Referred Customers

In what ways is a referred customer better than a customer who comes to you without having been referred? The answer to that question can help you optimize your customer referral profitability.
     To analyze the issue, researchers at Goethe University Frankfurt and University of Pennsylvania tracked the referral patterns and purchase behavior of 10,000 retail customers over a period of almost three years. Here’s what they discovered:
  • The value of a referred customer is about 16% higher than that of a non-referred customer. However, the size of the value differential varies across customer segments.
  • Compared to customers who come to you without a referral, customers coming via a referral are more likely to return repeatedly.
  • At the start, referred customers will spend more with you than will non-referred customers. However, this difference fades over months.
     The challenge, then, is to maintain a high shopping cart total each time a referred customer comes into your store. Here are some research-based tactics to accomplish this:
  • Encourage each referred customer to come shopping with the friend or friends who referred them. Give “Bring a Friend” discounts. Ask customers how they learned about you, and if they reply that a friend recommended you, give a discount coupon with the name of the referring person and the name of the customer in front of you, to be used next time the two come in together.
  • Arrange product and service knowledge sessions in which couples, families, and groups of friends can participate. Wine tasting. How to plan a vacation. How to set up a model railroad. You might charge a fee to make this a direct source of profit or at least to defray expenses. Or you might offer activities at no fee in order to build referral footsteps into your store.
  • Do your merchandising and selling with the expectation you’ll be having both conformists and variety seekers as shoppers. When people in a group are all buying and each person’s selection is announced in sequence to the others, there are some people who will seek out what’s different from what others are selecting. Therefore, it’s useful for you to have sufficient variety in each of the product types you carry. But other shoppers will want to buy exactly what others in the group are buying, so it’s useful for you to have enough stock of the particular items.
Click below for more:
Encourage Group Shopping
Offer Family Oriented Experiences
Expect Shopper Conformity & Variety Seeking
Provide Group Support with Customer Discomfort

Tuesday, December 28, 2010

Imbue Product Personality via Context

In what area of your store do you shelve the shampoo to kill lice? You don’t carry shampoo to kill lice? Well, for a moment, pretend you do to help me make a point that’s useful regardless of what product lines you carry.
     It would seem that the logical place to merchandise lice-killer shampoo is adjacent to the other shampoos and the hair conditioning products. However, research findings from Northwestern University and University of Chicago suggest you’re better off keeping it away from there, instead stocking it in the illness remedies department.
     In their study, the researchers first had participants look at an advertisement for shampoo. They wanted to evaluate the degree to which exposure to the shampoo ad would affect the participants’ impressions of a related product—hair conditioners. In a previous study, the same researchers had found that thinking about mayonnaise products builds a more positive impression of related condiments, such as ketchup.
     But when the ad presented to the participants was for a lice-killer shampoo, this instead led to more negative impressions of the hair conditioners. Consumers like their hair conditioners to have a pleasant sensual personality. Potions associated with killing and with bloodsuckers fail to project that personality.
     In contrast, thinking about the lice-killer had no significant effect on the participants’ liking of products from categories that don’t depend on being pleasantly sensual in order to motivate purchase. Flashlight batteries, for instance, as the lice-killer shampoo researchers predicted and then confirmed.
     As we’d expect, there are individual differences in how consumers categorize products and therefore the strength of carryover. One gender-based example has to do with sanitary napkins. As a rule, men to a much greater extent than do women will build negative impressions of products sold next to where the sanitary napkins are shelved. Men and woman have different personality associations with that product category.
     It’s not only related products that imbue their shelf mates with personality. For example, create prestige for items you sell by displaying to your shoppers the contextual cues for the values your shoppers hold. Show the clothing worn, the other products used, and the sorts of physical locations that consumers associate with the people your shoppers want to be like. Do this in advertising, store displays, e-commerce pages, and to the extent you can, even in what your salespeople wear and the phrases they use.

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Cultivate Store Prestige with Context

Monday, December 27, 2010

Make a Splash with Comprehensive Selection

John Nese, founder of Galco’s Soda Pop Stop in Los Angeles brags that his store carries more than 500 different beers and 60 different types of bottled water. But as you can tell by the store name, the claim to fame comes from the 450 different brands and flavors of bottled soda that are available. There’s no Coke or Pepsi, though, unless you include the versions imported from Mexico.
     Carrying a comprehensive selection of a product category helps make you a destination location. If you operate a large retail business, you’ll be the Category Killer. People know that they’ve a high chance of finding the brand and model they’re seeking if they come to you.
     If you operate a small to midsize retail business, you can be the Gnategory Killer, focusing on a specific niche. When the niche is unusual, such as classic sodas in bottles, that draws attention, which in turn draws shopper footsteps. Galco’s Soda Pop Stop has been featured in magazine articles and TV shows.
     Certainly, there’s more to successful retailing than comprehensive selection. You must have the business fundamentals in place, including attention to what the customer will buy, not only what you’re interested in selling. Mr. Nese says that when people question the price he sets for a bottle of soda, he frames his answer in terms of customer benefits: At Soda Pop Stop, you can buy one bottle to try out. At most stores, you have to buy a six-pack, at a higher purchase price.
     Here are two more shopper psychology pointers for Gnategory Killers:
  • Being comprehensive often means you’ll regularly be out of stock on certain items. You might carry 450 styles of sunglasses, but you won’t have every one of those models ready to go out the door every day. Cultivate what Stanford University researchers call an exciting rather than a predictable store personality. Maintain the feel of a treasure hunt.
  • Project expertise. Help your shoppers gain a consumption vocabulary. Talking with writer Robert Spector, Mr. Nese said that when a customer asks what’s the best root beer, Mr. Nese uses terms like relative carbonation, dryness, creaminess, licorice and vanilla. A consumption vocabulary helps your shoppers appreciate that there is a variety to choose from and then protects them against being overwhelmed by the variety. Each of those facilitates a sale at a different point in the purchasing process.
Click below for more:
Maintain a Niche So You’re a Destination Location
Monitor the Sales Floor to Avoid Out-of-Stocks
Sweeten Scarcity with Ample Warning
Boost Profits by Making Items Collectibles
Project Your Store’s Personality
Give a Vocabulary for Richer Shopping

Sunday, December 26, 2010

Discount for Shoppers’ Eyes & Ears

As Christmas Eve approached, Marketing Daily published a piece titled “Penney, Target Double Down For Boxing Day.” My guess is that most Americans aren’t thinking Boxing Day is, of all things, today, the day after Christmas. You have to be smart enough to live in Canada, Australia, the U.K., or certain other parts of the world to know that.
     Still the news to all those reading the Marketing Daily article is clear: Retailers are keeping up discounting, even though the 2010 holiday shopping season has formally ended. If you’re participating, you’ll get the best profitability by discounting for shoppers’ eyes and ears.
  • Perhaps following the lead of Walmart and Dollar Tree, a number of retailers used whole-dollar parity pricing this holiday season. A group of products were priced at $5.00 and another group at $10.00, for instance. The objective of parity pricing is to ease indecision. Now that it’s time to discount, use any whole dollar pricing to your advantage by realizing how shoppers’ eye tend to look to the left of the decimal point. Researchers at Colorado State University and Washington State University suggest just-below pricing, using $.99 for items priced below about $100.00. A discount from $10.00 to $7.99 looks to be a better deal than a discount from $10.00 to $8.00.
  • For higher-priced items, avoid discounting to price points ending in an 8 or 9. Researchers at Clark University and University of Connecticut discovered that customers are likely to feel that a discount from $222.99 to $211.99 is better than a discount from $199.99 to $188.99, even though the first discount is about 4.9%, while the second discount is the better one mathematically, at about 5.5%.
  • When saying a discounted price to a shopper, the sweet spot is with the digit 6. The Clark/Connecticut researchers find that a discount from $10.00 to $7.66 sounds better to participants than a discount from $10.00 to $7.22. The reason has to do with the subconscious influence of consonants. The smooth pronunciation of “six” triggers associations of “small.” The pronunciation of “two,” which is sharper, does not trigger these associations as well. In a similar appeal for the ears, researchers at HEC School of Management in Paris and at University of Pennsylvania conclude that, regardless of the discounted price, if the salesperson says it slowly to the shopper, the price is likely to be perceived as lower.
Click below for more:
Reassess Your Pricing Assumptions
Use Parity Pricing to Help Customers Decide
Earn Good Will in Giving Discounts

Saturday, December 25, 2010

Sell Identity Affirmation to People

A vegetarian wrote advice columnist Amy Dickinson that when he invites his family for meals, they always bring meat dishes. “I don't like it, but I don't say anything, even when blood from a rare roast spilled all over my counter.”
     Ms. Dickinson advised him to accept that his family members would bring meat entrees if he wasn’t providing one. She added that she suspected family dynamics were playing out here.
     I agree. This is about values and self-identity. Vegetarians do not want to be confused with meat eaters, just as meat eaters prefer not to be confused with vegetarians.
     A team of researchers from France, Australia, and the U.S. told study participants they'd be given either a beef sausage roll or a vegetarian roll to eat. But those tricky researchers lied to half the participants, who actually were served the other entrée from what had been promised.
     One group of those participants granted a high rating to what they ate, regardless of whether they actually ate the meat or vegetable version, as long as they thought it was meat. Unlike the veggie fans, these meat elitists showed up on psychological testing as embracing values of power and strength.
     Psychological dynamics like this one can lead to selling opportunities. Researchers at Southern Methodist University and University of Texas-Austin watched what happened when people from UT were assigned to purchase a present for someone who wanted an item carrying the logo of UT archrival Texas A&M. The reactions were compared to those of a comparable group assigned to buy a gift emblazoned with the UT Longhorns logo.
     The researchers report that when selecting the item for the Texas A&M fan, the shoppers fidgeted, chewed on their lips, and averted their eyes. They crossed their arms, as if to distance themselves from what they were doing, and at the cash/wrap, they actually stepped away from the item, as if to say to anybody watching, “Don’t think this item represents who I really am.”
     Then the researchers provided relief. They offered to each participant a choice between an expensive silver pen with no logo or a low-priced plastic pen with the Longhorn logo. Those who had bought the Texas A&M gift were more likely to select the cheap pen.
     The lesson for you, retailer? Carry items that allow customers to affirm their desired identities.

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Sell Benefits to Fit Shoppers’ Values
Sell to Values, Not Just Value

Friday, December 24, 2010

Analyze Gifting to Develop Opportunities

Christmas Eve is a good time to analyze gifting. The nature of the gift shopper is different around Christmas and in certain types of stores, around Valentine’s Day, than at other seasons. The past weeks have been ones in which customers feel more pressured to get through a task. They’re operating at higher stress levels because of responding to crowded conditions on the roads, in the parking lot, and in the mall.
     Or maybe they’re energized by the holiday spirit and feeling of community as shoppers rub shoulders and other body parts with others who are also out on gift shopping missions. Last month, international marketing consultants Millward Brown reported that among shoppers who prefer brick-and-mortar (B&M) gift shopping to online, 42% said it was because of the store atmosphere during the holidays.
     When we peel away those situational factors, we’ll see the components of the gifting process, regardless of month. Researchers at University of Florida used the lens of anthropology to describe these three stages:
  • Gestation. What motivates the gift shopper? At Christmas, it may be a sense of obligation or a desire to avoid embarrassment if someone gives a gift and you don’t have one in exchange. The salesperson might ask, “Have I helped you find gifts for all the people on your list, plus a few items for the unexpected gift giving?” At the other extreme is the motivation of selfless love. When you sense this, help the shopper focus as much on what the gift giver wants to communicate as on what the gift recipient likes. According to the Millward Brown research, the act of coming to the store in itself shows love. About 22% of the respondents who prefer B&M gift shopping said they believe that the act of personally going to a store adds value to the gift.
  • Presentation. You, the retailer, may not be right there at the time the gift is presented. Your role is in the preparation. The anthropological perspective finds that admiring the gift wrapping and the unwrapping of the gift can be significant components of the ritual. Consider offering gift wrapping as a value-added service.
  • Reformulation. Maybe the recipient doesn’t like the gift. At worst, this can cause the recipient to be sad or angry. Make returns easy so the negative feelings aren’t diverted to your store.
     Merry Christmas to you, dear RIMtailing reader.

Click below for more:
Personalize the Shopping Experience
Simplify Item Returns for Customers

Thursday, December 23, 2010

Strategize for Fad Item Profits

Consumer psychologists define a fad item as one where popularity explodes and then dies suddenly. With fads, it’s in the timing. Stock up too late and you’ll not only miss out on the profitability from the period of explosive sales, but you’ll get stuck with unsold products.
     That’s because of another feature of fad items described by consumer psychologists: They don’t perform any substantial function for the purchaser beyond the joy of possessing what lots of other people want. When the urge to spend good money on a useless object fades, so do fad sales.
     Consider Silly Bandz, those colored silicone bracelets, each of which takes on the shape of an interesting object, character, or word, when not being worn. A recent USA Today article says 7-Eleven stores’ sales of Silly Bandz are now only 3% of what they were last May. The Learning Express Store in Wilmington, N.C. is now selling five packs for what one pack used to cost. The owner of the Doodlehopper 4 Kids stores in Northern Virginia is quoted as telling the USA Today reporter he never wants to see another Silly Bandz pack, although the store sold 4,000 packs in one month not that long ago.
     On the other hand, some fad items have a longer lifecycle. Sales will still die off at some point, but as a retailer, you’ve more time to cash in on the trend. Based on consumer research, here three questions to ask when strategizing:
  • Are the groups using the fad items groups that potential consumers want to belong to? Then the fad item can be used as a badge of membership or aspiration, so has a function.
  • Does the fad item fit with lifestyle changes? Currently, fad items that seem to support personal health, economy, personalization, and/or community are more likely to last for a while because current lifestyle changes include a desire for personal health and those others.
  • Is the fad a reemergence of a successful fad from the past? You can use the lifespan of the prior emergence to estimate the lifespan this time.
     Maybe the third criterion is what Silly Brandz, the brand behind Silly Bandz, had in mind when announcing their newest product. Called the Nano Watch Band, it’s a broad silicone holder for your iPod Nano. It turns your iPod into that durable fad from the past—a wrist watch.

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Meet Customers’ Desires for Nostalgia
Be in Stock for the Just-in-Time Shopper

Wednesday, December 22, 2010

Prefer Obligation to Shame

Let’s say you think of yourself as a local retailer. You’ve operated your business in the community for a long time. Almost all your employees live in the local area. They spend most of their paychecks and you spend most of your business profits locally rather than sending the money off to some distant corporate headquarters.
     Next, let’s say a Big Box has opened a few towns away. Being a wise retailer, you take a trip to the Big Box to look over this new supersize competition. And as you’re walking through the store, you see right there in the main aisle one of your longtime customers pushing a shopping cart toward the cash/wrap. A shopping cart filled with all the sorts of items you sell in your store.
     Along with you recognizing them, they see you and immediately take on this embarrassed, sheepish appearance. Eyes looking down and shifting side to side. Shoulders slumped forward. A forced smile. They say hello.
     Your move. Do you assume that, like you, your customer is giving the Big Box a look-see, so you say, “What do you think of this new store? I came over to check it out, too.” Or do you opt for the guilt trip: “How could you ever want to spend your money here at this Big Box when you should be spending your money and your time with a local retailer?”
     Is it to your advantage to try to make the person feel guilty?
     All consumers prefer not be shamed. Adults who identify with individually oriented cultures, like the U.S., Australia, and Great Britain, are especially likely to reject guilt. “Try to make me ashamed about shopping at Walmart, and I won’t stop shopping at Walmart. I’ll stop shopping with you, because I don’t like spending my money with people who try to make me feel bad.”
     Research findings from Università Commerciale Luigi Bocconi in Milan, Italy indicate that, rather than aiming for raw guilt, you develop gratitude and a sense of obligation: “You’re one of my best customers, Jake. My guess is that’s true because my store has met your needs well. May I give you a call later to set up a time I can treat you to lunch or dinner and hear your thoughts on how I can best continue to meet the needs of you and other customers like you?”

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

Click below for more:
Go for Customer Gratitude and Guilt
Know How Much Emotion to Deliver
Break Up with Customers Graciously

Tuesday, December 21, 2010

Magnetize the Consumer with Mystery

Introducing a new alternative to the consumer? Then present a mystery. This is a technique to be used with caution, but when done well, it can be surprisingly effective. For example, magnetizing with mystery arouses the consumer’s interest in a small to midsize retail business that wants to distinguish itself from larger competitors.
     Researchers at Indiana University and University of Colorado-Boulder explored how this works for an unfamiliar alternative carrying ambiguous category designations:
  • In a product line you already carry, you’re offering a new brand that has unusual features—such as a dog food that is sold frozen—so that the prospective purchaser may be uncertain what category it belongs to—in this case, either the pet food category or the frozen food category
  • You’re introducing a multifunction product—such as an exercise device and MP3 player—where it could be placed in different categories—in this case, either the exercise device category or the music player category
  • You’re a new store in town, and with the objective of succeeding through diversification, you offer an assortment of products that cross traditional category designations—such as carrying sporting goods, camping supplies, and house paint
     The challenge is to position the new offering in the consumer’s mind so they know what category or categories to place it into. You see, people are more comfortable shopping when they know the category.
     One advertising alternative is to announce the brand, item, or store name and then boldly tell the consumer what category you want them to place it into. In doing this, you’re counting on the audience caring. Often, they don’t.
     The “mystery ad” alternative evaluated by the Indiana/Colorado researchers consists of waiting until the end of the ad to announce the name. Start off with an unusual story or absurd humor that dramatizes the category—exercise machine, let’s say—but hooks the ad’s viewer or listener into thinking “What’s this commercial for, anyway?”
     The researchers found mystery ads were significantly more effective than traditional ads in making the name-category link memorable.
     Recall I said that you need to use caution with mystery ads: Be sure to announce the name at the end boldly. Advertising pioneer David Ogilvy said long ago, “Use the name within the first ten seconds.” Mystery ads change that advice to, “Drill in the name within the last five seconds.”

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

Click below for more:
Compare Unknown Brands to Best-Known Brands
Use Signage to Categorize Items
Know How Shoppers Interpret Your Words
Joke Around to Facilitate the Sale

Monday, December 20, 2010

Label as Small to Increase Trial

“Try a little bit. Maybe you’ll like it, and you’ll want lots more.”
     Your customers have heard that since they were small children resisting any sort of change in familiar diet or habits. Now that they’re old enough to make their own shopping decisions, small change still pays off.
  • Researchers at Koç University in Istanbul and at University of Michigan found that consumers who ate from food packages labeled as small felt less guilty than similar consumers who ate from the same size packages not labeled as small.
  • Researchers at Technical University of Lisbon and at Tilburg University in the Netherlands found that people who were hesitant about eating a food product were more likely to overcome their hesitations when presented with small packages than when presented the equivalent amount in a large package. In addition, the people who got started on the small packages ended up eating more than did those who dug into the large package. The participants had said they believed small packages would help them limit their consumption, but the opposite proved to be true.
  • Researchers at University of Pennsylvania and Carnegie Mellon University first identified a group of consumers who said on a survey that they hated spending money on items beyond necessities. The researchers called these people “tightwads.” In the next stage of the study, the tightwads were offered the opportunity to pay extra for overnight shipping of a DVD they wanted to have. The extra cost was presented to some tightwads as “a $5 fee” and to the rest of the tightwads as “a small $5 fee.” The tightwads hearing the word “small” were 20% more likely to pay the fee than those not hearing that word. In contrast, there was no difference with a “$5” and “small $5” description among people who were spendthrifts—people who indicated on the earlier survey the opposite of tightwad tendencies.
     When you’ve a hesitant shopper, offer a version of the choice which you can legitimately describe as small, and then describe it to the shopper in that way. This tactic is a component of the “foot-in-the-door” technique: The salesperson makes a small request, and then, when the customer agrees, follows up with a larger request.
     The small change tactic can be misused by the retailer to get consumers to engage in unhealthy habits. Reserve its use for facilitating positive change.

Click below for more:
Make the Sale a Slice at a Time
Give Shoppers a Comparison Point

Sunday, December 19, 2010

Use Direct Sales Tactics with Men

A recent Bloomberg Businessweek article describes the distinctive and successful retailing business model of J. Hilburn. The company is on track to sell 60,000 custom-tailored men’s shirts this year plus accessories, with sales revenue expected to exceed $9 million. None of those sales are being made in a store, though. Instead, one of the 650 J. Hilburn Style Advisors comes to the shopper’s home or office to take measurements. The shirts are delivered to the customer two to three weeks later. J. Hilburn is a direct sales retailer.
     Unlike some other, more famous, direct marketers—such as Avon and Tupperware—J. Hilburn’s target market is men. Home shopping parties are for women, where a major factor in the success is that women shoppers enjoy socializing. A major factor in the success of J. Hilburn is that most men hate shopping for clothing. Even the thought of clothes shopping gets men to become highly goal-directed.
     Stanford University researchers had men and women think about going on a clothes shopping trip. Then each of the study participants was asked to plan another type of trip—driving cross-country. It turned out that thinking about the shopping made the men more likely to plot a route that got the job done most quickly. With the women, thinking about the clothes shopping made them more likely to plot a scenic route.
     What about J. Hilburn’s current direct sales business model can you emulate in serving your male customers?
  • Make personalizing straightforward. Both male and female shoppers like their products and services personalized. But as a rule, women are more patient in having the personalizing done. A man’s willing to pay between $80 and $150 for a shirt because the shirt’s built to their individual dimensions and the measurement comes to them.
  • Be experts. Like with other direct sales firms, J. Hilburn Style Advisors can increase their income by recruiting others to sell the merchandise. A difference is that J. Hilburn sets a maximum of five direct reports. This rule encourages an emphasis on quality over quantity in the salespeople. When dealing with male customers, recognize their desire for salespeople to have good technical expertise.
  • Streamline. Always be looking for ways to speed up the process for the male shopper who chooses not to linger. J. Hilburn is adding more online ordering options, increasing their merchandise line, and trimming delivery times.
Click below for more:
Build Up Shopping Convenience
Enhance Convenience via Teammates

Saturday, December 18, 2010

Soothe the Savage Shopper with Silence

Your shoppers are surrounded by sound. Even the toys are alarmingly loud. George Prochnik, author of In Pursuit of Silence: Listening for Meaning in a World of Noise, points out that a Hannah Montana in Concert Collection Doll generates up to 103 decibels, while Tickle Me Elmo reaches 100 decibels. That’s what you’d hear from the engine of a motorcycle or snowmobile.
     All this auditory stimulation can aggravate emotions. Mr. Prochnik writes about his conversations with an officer from the Washington, D.C. Metropolitan Police, who says that many domestic dispute calls turn out to be noise complaints. The officer tells the people to turn down the music and the voices and the rest and be silent for a minute. “Well, you would be amazed how often that’s the end of it.”
     The officer is on to something. Excessive noise leads us to tighten our muscles, and as research from National University of Singapore and University of Chicago confirms, tense muscles keep people from being sold what they’re not fully convinced they want. Being sold different ideas like, “There are other ways to resolve this dispute you’re having.” And what makes all this more important for you as a retailer, being sold merchandise they’ve hesitations about buying. To facilitate the sale and soothe the savage shopper, introduce some silence. A little peace and quiet also soothes the harried salesperson.
  • When a customer, client, or patient seems to be getting progressively more upset in a noisy environment, reduce the noise. Invite the person to move to a quieter location, if possible. Turn down the volume of the music, if possible. Speak just loudly enough for the person to easily hear you, and not louder than that. Stay alert for signs you’re talking too softly, though, to the elderly and hearing impaired.
  • If a shopper makes what seems to you to be an unreasonable request, introduce a pause. Stop whatever else you’re doing. Face the person straight on. Look directly at their eyes. Be silent for about ten seconds. Spend the time building within yourself a “Welcome to my business. You are somebody who can help me pay my bills. I prefer to find a way to avoid saying no to you” frame of mind. Then while looking at the shopper with a smile, say, “Please tell me again how I may help you.”
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Lift the Spirits of Your Customers
Reward the Purchase with a Pleasing Sound
Use Music to Motivate, Not Disrupt
Use Sound Effects to Sell

Friday, December 17, 2010

Offer Scam-Free Scarcity

Scarcity opens opportunities to you for higher profit margins. Customers will accept paying substantially more for items that are scarce, as long as the customers accept that the reason for the scarcity is genuine.
     In a classic consumer psychology study, participants were presented a set of Nabisco chocolate chip cookies and asked to answer questions like:
  • How attractive are the cookies?
  • How much do you like the cookies?
  • How much would you be willing to pay for one of these cookies?
     For some participants, two cookies were presented, while for the others, ten cookies were there. Which group gave higher ratings to the attractiveness, liking, and price willingness? Yes, the group that saw only two cookies.
     In another experiment, all the participants were shown an abundant number of cookies and then asked to do a different task away from the cookies. For some participants, when they returned, all the cookies were still there. For the others, most of the cookies were gone. Which group gave higher ratings to the cookies? Yes, the group that saw them fading fast.
     All the cookies were actually the same, so the higher valuation came because of the scarcity.
     Scarcity can be implied by saying it takes a long time to create the product. University of Michigan researchers showed people artistic creations and asked each to judge the quality of each work. Before being asked for the quality rating, though, the participant was told the amount of time the artist had taken to complete the work: “The artist took one year to do this.” “This piece was completed by the artist within one week.” The times given were not the actual times, of course. You know how psychologists love to lie to people.
     The purpose of the lying was to see if a potential purchaser of artwork would infer quality from the length of production time. And indeed, there was a relationship. Even though the “completion times” had been randomly assigned to the works, the longer the completion time, the higher the average rating of the work. If it took longer to do, it must be higher quality.
     Here the lying was for experimental purposes. But if your shoppers conclude you’re lying about the reason for scarcity, their irritation will disrupt sales.

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

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Explain Delivery Time as Quality/Talent
Be In Stock for the Just-in-Time Shopper
Sweeten Scarcity with Ample Warning

Thursday, December 16, 2010

Guide Choice by Sequence of Presentation

The order in which you present purchase alternatives can influence what the consumer ends up selecting and how much they’ll be willing to pay. By staying aware of how this works, guide the shopper toward what benefits both them and your profitability.
     Before talking about sequence, let’s talk about number of alternatives:
  • In habitual, repeat purchases, the shopper often has little interest in considering alternatives. To open up their mind to changing brands, upgrading, or trying out a new way to address their desires, propose one compelling alternative. “Here’s a brand you might not have considered before, and here’s why I suggest it to you.”
  • Some shoppers make it a habit to know, before they enter a store or ecommerce site, precisely what they’ll purchase, but they want to reassure themselves they’re making the right decision by being told about alternatives. It’s a shopping ritual for them. The precise number of alternatives and the order in which they’re presented are not really important.
  • In most other circumstances, consumers like to have three alternatives presented.
     As to presentation sequence, here are some tips:
  • Research findings from University of Hong Kong and National University of Singapore indicate that when a customer appears to be in an upbeat mood, they’re more likely to select either the first or the last alternative you propose than to select a middle alternative.
  • When the customer is sad, worried, or angry, but is determined to make the purchase rather than defer the decision, they seek the compromise alternative and will look for it as the middle alternative in the presentation order. Not the highest-priced or lowest priced, but the middle-priced. Not the highest quality or lowest quality, but the medium quality. Keep it brief, though. 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 you in the future.
  • According to researchers from Hong Kong University of Science and Technology, if your shopper is considering a lot of information when making a purchase decision, they become willing to buy the higher-priced alternative when the alternatives are presented in order from most expensive to least expensive. The price of the first item becomes an anchor for what your shopper will expect to pay.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Profit from Shoppers’ Positive Moods
Shoo Away Negative Customer Feelings
Expect Shopper Conformity & Variety Seeking

Wednesday, December 15, 2010

Tie In Promotions to What Folks Care About

An New York Times article describes how some businesses will be showcasing themselves at the next Times Square New Year’s Eve celebration:
  • Leading up to the event, document management company Cintas is sponsoring Good Riddance Day, where paper shredders will be positioned in Times Square to receive photos of ex-lovers, paid-off bills, and other documents we’d prefer not to carry into 2011
  • On the magic night itself, Nivea Lip Care is sponsoring the Kiss Platform for those special busses and plans to distribute 30,000 lip balm samples
  • The numerals that show the countdown will shine bright because of the Duracell Power Lab
  • The ball that descends at the magic midnight moment is provided by Waterford Crystal
     A Times Square promotion might not be on your New Year’s resolution list. Still, I recommend you again look over the four items above with an eye toward how you might tie in your promotions to special events that the folks in your area are thinking and caring about.
  • Show attention to celebrations. If you’re holding Columbus Day sales, also start holding Homecoming Game sales. This emphasizes your allegiance to the community you’d like to make purchases from you. Celebrations are happy. Happy people buy more, so get them hanging around your place. Also, associating happiness with your store means those customers will want to come back again after the celebration.
  • Pay attention to bad news. The Duracell Power Lab consists of four stationary bikes. Manual pedal power charges the batteries that will light the numerals. After its Times Square New Year’s Eve service, the Power Lab will be deployed to disaster areas, where the pedal power can be used to recharge smart phones and other portable computerized devices. When bad news such as a disaster affects your local area, demonstrate your sympathy by offering discount prices. Or if you choose to raise prices because of increased procurement costs, announce how you’re donating a portion of the additional amount to a disaster relief fund.
  • Make the relationship of the promotion to the event clear. Research findings from University of Miami show how viewers’ memories for the sponsors of Super Bowl commercials frequently get muddled. This is less likely to happen with commercials that make the relationship to the event as clear as the premium Waterford Crystal on the Times Square New Year’s Eve ball.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Stage Special Events to Build Sales
Show Fair Pricing by Contributing

Tuesday, December 14, 2010

Imagine What Will Work

Tweets are all atwitter about a Carnegie Mellon University finding that thinking about eating M&M candies leads to actually eating fewer M&Ms afterwards. One trouble with tweets, though, is as old as the Rumor Game—that party pastime where one person whispers some information to the person next to them, who then whispers to the next person what they understood, and so on. By the time the information makes it around the circle, it comes out quite different. A chain of tweets leads to distortions.
     With the Carnegie Mellon study, even the prestigious National Public Radio didn’t get it right when titling their report “Just Thinking Harder May Help You Lose Weight.” The researchers claim only to have found that thinking about eating lots of M&Ms temporarily reduces the urge to eat lots more M&Ms. There was no evidence it significantly reduced the urge to eat cheddar cheese cubes or completely eliminated a desire for M&Ms.
     One lesson from all this for retailers is to exercise caution when taking advice based on research findings. Evaluate the trustworthiness of the person or organization interpreting the research findings for you. And evaluate if the advice makes sense to you as a retailer.
     If you’re a services retailer running a weight loss clinic, are you ready to introduce the Carnegie Mellon Diet, as a headline from CBS News suggests? Probably not, after knowing what the research really says and what makes sense to you as a weight loss expert.
     Based on the research findings, would you take a more careful look at the power of imagination? That’s what I’d advise.
  • Ask prospective purchasers to imagine experiencing the benefits of the product or service you’re selling. In a study involving a premium cable TV service, researchers at New Mexico State University, Arizona State University, and Claremont Graduate School found that this technique more than doubled the percentage of purchasers, from 20% without the imagination request to 47% with it.
  • To better prepare your staff to respond to customers and suppliers in ways that will lead to greater profitability, develop scripts and then ask each staff member to customize the script by imagining how they’d want to handle the situation.
     Here, imagining an event makes it more likely. In the Carnegie Mellon research, imagining made subsequent similar behavior less likely. That’s a sign the finding might be an exception.
     Imagine that!

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Help Shoppers Use Their Imagination
Ask Shoppers to Imagine Usage Benefits

Monday, December 13, 2010

Honor Your Customer’s Point of View

My optometrist is a fine retailer. He keeps to schedule while also taking time to establish rapport before beginning the exam. He supports the community. And he usually guides the patient toward the right decision without the patient feeling pressured.
     However, I wasn’t consciously thinking about all this when the incident occurred: As my eye exam was done, he said, “Your vision has changed, but not dramatically. You could get new eyeglasses or stay with the same ones for another year.”
     He’d checked out my eyeglasses at the start of the exam and had handed them back to me then. Now I handed them to him again and said, “My glasses have a scratch that I can sometimes sense after I’ve been reading for a while.”
     He held up the eyeglasses, looked through the lenses, polished them with a cloth, looked through the lenses again, then looked at me with eyebrows arched and said, “That scratch is so small you wouldn’t notice it when you’re reading.”
     Immediately, I felt a flush of emotion. But I wasn’t sure what it was about. Research at Columbia University, building on some of history’s earliest systematic studies in experimental psychology, found that the emotions we experience are based on how we interpret the physiological sensations in our body. Whether a consumer is angry or surprised depends on whether they expect to be angry or surprised.
     I hadn’t really expected to be either. My first interpretation was that I was irritated. Who was this optometrist to tell me the scratch was nothing to notice? But then I realized that what I truly was feeling was substantial surprise. Here is the man who, during the exam, was asking me again and again, “Which looks clearer to you, this one or this one?” He was showing great deference to my judgment. And then in one sentence, he was contradicting my judgment.
     Okay, I was both irritated and surprised. Suppose he’d said, “That scratch is very small. Still, if you’re finding it bothers you, you might want to get new eyeglasses.” He’d be honoring my point of view. That would have been consistent with my positive impression of him.
     I’m not suggesting you uncritically accept each customer’s point of view as your own. I am suggesting you base your responses on how your customer sees their world.

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Be a New Shopper in Your Own Store
Notice Where Your Shoppers Look as They Enter

Sunday, December 12, 2010

Condition Your Customers

I admit it sidesteps the dignity of your customers to consider them as experimental animals like Pavlov’s dog. You do remember Ivan Pavlov and how when he paired the sound of a bell with feeding a dog, pretty soon the bell caused the dog to salivate? It’s called classical conditioning.
     Still, your shoppers make many purchase decisions without much thought, and in these low-involvement decisions, they are influenced by principles of classical conditioning.
     Researchers at University of British Columbia presented study participants with a picture of a pen at the same time music was played. Some people were shown a blue pen, while the others were shown a beige pen. Some of each of those two groups heard music previously qualified as pleasant to listen to, while the others listened to certifiably unpleasant music. The participants were then asked to select the blue or the beige pen.
     Those who had heard the pleasant music selected the color pen they’d seen about 80% of the time. Those who had heard the unpleasant music selected the pen they’d seen about 30% of the time.
     Here are some research-based tips for profiting from classical conditioning:
  • It works best when the shopper is not already familiar with the items, so it could be especially helpful when introducing new brands in habitually-purchased product categories.
  • You’ll pair pleasant sensations with the brand or item you want the shopper to prefer. The sensations could come from music, colors, sounds, and/or fragrances you’ve reason to believe the shopper will find to be highly pleasant. With certain sensations, you can do the pairing in your advertising, and with certain sensations, you can do it in-store.
  • The effect is strongest when you show the package or a picture of the item and then immediately follow it with the pleasant sensation. It also works to present the two at the same time or to present the pleasant sensation first, but the effect is not at strong. You’ve more control over the sequence in advertising than in the store.
  • Classical conditioning nudges the shopper rather than controls the shopper. Pavlov’s dogs almost always salivated at the sound of the bell. But remember that about 30% of the people in the pen study did select the option paired with the unpleasant music. This is compelling proof that our customers can easily be distinguished from experimental animals after all.
Click below for more:
Let Your Shoppers Enjoy Being Influenced
Use Fragrances to Pace Shoppers

Saturday, December 11, 2010

Restrain Your Overreaction to Criticism

We all love to hear praise for our stores and for the products and services we sell. And negative reviews sting.
     If you follow the good advice to track what people are saying about you on the Internet, you’ll come across loads of both the praise and the criticism. Certainly react to the feedback by considering how to improve. But never overreact to the criticism.
  • The conscientious retailer can come to take praise for granted. This gives the criticism an unbalanced importance. Some industry experts say that one reason Howard Johnson’s Restaurants failed in the mid-1970’s is that management lost focus as they repeatedly switched business strategies in response to critical remarks on customer comment cards.
  • In a three-nation study, researchers at Hebrew University of Jerusalem, Stanford University, and Korea University found that there is a negative bias in customer reviews of services. Even when the positive balances the negative in the customer’s experience, the customer is more likely to file a negative review. As a result, we can learn of a few criticisms and think this represents the views of a large number of people. Psychologists call it “The Law of Small Numbers.” Worse yet are stories. When the criticism comes in the form of a story, it outbalances an objective reading of consumer attitude survey statistics, for instance, unless we take steps not to overreact.
  • Researchers at University of Colorado-Denver tested the accuracy of an assumption retailers commonly make: “Customers who speak ill of a store they’ve tried shopping in for the first time become less likely to return to the store.” The researchers found this assumption to be wrong. That conclusion might surprise you until you think of it in a different way: Satisfied customers often still include criticism along with any praise. There’s evidence the sprinkling of criticism is intended to make the reviewer come across as more believable.
  • Other research does confirm our assumptions about criticism. For instance, when a store or product has a strong positive image for consumers, criticisms of new offerings are unlikely to infect the existing positive opinions. Researchers at University of Minnesota and Kansas State University found that when a Johnson & Johnson hand lotion was rated low on gentleness, gentleness impressions of the Johnson & Johnson flagship product—baby shampoo—were quite immune to change.
     Learn from criticism, but restrain yourself from overreacting.

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Keep an Eye on Yelp
Reduce Bias in Customer Reviews of Services
Tell Positive Stories About Your Products
Encourage Balanced Customer Reviews

Friday, December 10, 2010

Counteract Problems from Similar Brand Labels

When items carry the same brand name across product categories—such as a bath soap and a shampoo—you’d like to strengthen the brand image by having the same package design. Having almost identical package designs is common with house brands, where a consumer could be looking at tables and tacos during one shopping trip.
     Overall, using a similar package design to build brand image is a good idea from a shopper psychology perspective. Mere familiarity brings credibility.
     There’s a potential downside, though. Research findings from Wake Forest University and University of North Carolina–Greensboro suggest that when packaging is similar across items, the shopper senses a loss of control. This is more serious than boredom. The consequence might be that shoppers seek variety beyond the similarly branded items. The shopper becomes a bit less likely to buy the house brand across product categories unless you take steps to restore the sense of control.
  • Introduce variety by placing products with the same package design in different relative shelf positions for different product categories. With the mouthwash, the house brand is to the top left of the other brands, while with the toothpaste, the house brand is to the bottom right of the other brands. Research at University of Pennsylvania and University of Illinois confirm that random arrangement of a product set can lead to more buying.
  • Curb the routine with different designs and color schemes on signage for different product categories. It’s best to include the brand name or a picture of the package on the sign. Then the added color and design give a distinctive flavor to the product. Researchers at Columbia University and University of British Columbia find that such techniques give the shopper a sense of control, and this sense of control curbs further variety seeking.
  • Categorize products so that the package label retains the brand identification, but also has additional meanings to give it a distinctive identity. Researchers at Stanford University and Columbia University say that categories enhance the empowering sense of control by allowing the consumer to give reasons to themselves for the choices they’re making. For foods and beverages, the categories might be by taste (coffees are mild, dark roast, or nutty). For clothing the categories might be by usage occasion (leisure, office, party). For power tools and sports equipment, the categories might be by level of expertise recommended.
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In Comparative Ads, Don't Show Users
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Thursday, December 9, 2010

Guarantee with Care

A guarantee is a multi-part promise to your customers:
  • What you are promising you will do
  • The rules for deciding if you’ve kept that promise
  • The remedies available to the customer if you fail to keep your promise
     There’s a fourth item as well:
  • How you will answer the customer’s questions about each of those three parts of the promise. The guarantee is one tool for projecting your marketing identity to your target customers. Use your explanation of the guarantee to project clearly.
     Stay aware of what you’re promising and make updates in both the promises and the explanations whenever necessary. A current example of the importance of doing this right is Walmart’s price matching guarantee for brick-and-mortar store sales. In a bid for holiday sales at a time of consumer price sensitivity, Walmart announced they are offering, “the strongest price-match guarantee in the market.”
  • When a customer asks Walmart, “What are you promising you will do?,” Walmart is answering, “Give you the lowest price available.”
  • When the customer asks, “What remedy is available to me if you fail to keep that promise?,” Walmart answers, “If you find a lower price, Walmart will honor that price.”
     But as with many price matching guarantees, it’s the promise in the middle that can lead to misunderstandings. What are the rules for deciding if the customer has found a better price? It’s true that Walmart has kept their guarantee up-to-date, recognizing that these days, a customer might be going up and down the store aisles with their mobile device in hand, looking for the prices offered by ecommerce vendors on each item. So Walmart’s in-store guarantee now excludes Internet pricing.
     As a StorefrontBackTalk article points out, this means walmart.com prices don’t count. Staff at the Walmart store could find themselves in the position of explaining to a customer why buying an item at the store makes more sense than getting a better price via the same company’s online site.
     That’s okay, as long as all store staff keep up on the details of what’s being promised and have the words in mind that they will say. Here’s another meaning of “guarantee with care.” Take care not only in updating the details of a guarantee, but also take care with the customer’s feelings so they come away making a purchase they consider to be a good decision.

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Keep Your Promises
Keep Up on Your Promises
Use Low-Price Guarantees Strategically
Resolve Customer Complaints Carefully

Wednesday, December 8, 2010

Cook Up Recipes for Patrons

Why have cookbooks and how-to books historically sold so well? Because people like recipes. Even the best selling book of all, the Bible, can be considered as a set of recipes for living.
     When retailers cook up recipes to suggest to customers, those retailers are helping the customers meet three objectives that research indicates consumers set for themselves:
  • Avoid indecision. “There’s enough uncertainty in my life without fretting about what to cook for dinner.”
  • Stay within a budget. “The recipe gives me the whole picture, so I can calculate the total cost.”
  • Allow for variety. “I’ve the opportunity to personalize by improvising on a proven foundation whenever I choose to.”
     A substantial percentage of households plan meals—especially dinner—in advance, and the shopper creates a shopping list based on the plans. The customers are doing this to reduce temptations to overspend. Grocery retailers can earn good will by providing to customers full meal recipes that include items available in one place from the retailer.
     The same logic applies to all sorts of other retailers, as long as you keep in mind the third objective—allowing the consumer to improvise so they can personalize. In your how-to recipes, lay out the plan for the consumer who wants a turnkey solution. Give an overview and then the step-by-step specifics. And end with possible alternative steps for the consumer who prefers to take the path less traveled. Those alternatives can stimulate the customer to increase the shopping cart total, so be sure to include them.
     Research findings from London Business School and University of Chicago indicate that people are most likely to want the creative alternatives when the product or service is intended to give pleasure beyond solving a problem. The researchers explored what happens with the retail categories of museum visits, massages, gourmet foods, and exercise programs.
     In the cases where the consumer viewed the product or service as principally solving a problem, the consumer was happy to be told what to do, as would occur with one fixed recipe. But when the goal was pleasure, the consumers chafed at the limitations of one directive. They wanted to make choices.

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

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Sell Impulse Items to Serve
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Tuesday, December 7, 2010

Collaborative Consumption is Coming

Yesterday, Facebook officially implemented their new Profile Page format. Some commentators think Facebook’s true agenda is to tease out increasing amounts of information from consumers that Facebook can then transform into profitability. However, Facebook CEO Mark Zuckerberg has been insisting the primary purpose of the change is to facilitate social interchange.
     In either case, a primary message for retailers is that an abundance of the people in your target markets want to share. One aspect noted by a recent Time Magazine article is “collaborative consumption.” This name for sharing merchandise is a cut above equipment rental: Collaborative consumption is supercharged by the opportunity to learn about others.
     The author of the Time article talks about how, when he “borrowed” an iPad via SnapGoods for $15 a day, he was able to see the owner’s mental fingerprints on the machine by noting the apps the owner had downloaded. He rhapsodizes that he could even see the owner’s actual fingerprints. Not too grimy, one would hope.
  • If you don’t currently rent out merchandise, consider introducing rentals as a service to the community and as a source of income for your business. If you do currently rent out merchandise, rethink the most profitable ways to use that rental center as a place shoppers can try out products and then have an opportunity to purchase a used or new version.
  • Encourage each customer to share product ratings with others on your store’s Internet site, via the customer’s social media services, and through the old-fashioned, but highly powerful, medium of talking with their friends and family.
  • For high-ticket items that might be used less than frequently, invite people to make a group purchase. Yes, you’d prefer to sell three items rather than sell one. But with consumers’ current price sensitivity and anti-waste commitment, it might be a matter of you preferring to sell one item rather than sell none.
     Driving this sort of sharing is more than a wish to save money. There’s compelling research evidence it’s a way to achieve thoroughly-grounded happiness. I’m impressed with how well this point is documented in an upcoming movie titled “Happy.” I watched “Happy” last weekend at a pre-release event in Vallejo, California. An article in the Vallejo Times Herald quotes filmmaker Roko Belic as saying, “The happiest people tend to be those [who] feel part of something bigger than themselves….”

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Attend to Face-to-Face Word of Mouth
See Through Anti-Waste Consumers
Protect Customers from Dangerous Decisions

Monday, December 6, 2010

Explain Yourself to Female Customers

A Time Magazine feature article uses the term “sheconomy” to refer to the substantial participation of women in making retail purchase decisions among product categories—like consumer electronics—and service categories—like automobile repairs—generally assumed to be the province of men.
     Such mistaken assumptions are nothing new. For years, alert retailers have recognized how women purchase all sorts of “male” items—ranging from undershorts to beer—for the men in their lives. The trend is more pronounced now, though, probably because women are gaining greater earning power.
     Also, there are countervailing trends the Time article doesn’t discuss: In the U.S. at least, it’s likely that husbands will be doing more of the shopping than in the past. A University of New Hampshire analysis concludes that during the U.S. economic downturn, husbands were more likely to lose their jobs than were wives, and now, husbands are encountering more difficulty than wives in finding employment.
     As a result, a higher percentage of wives than in the past are finding it necessary, in order to pay the bills, to enter the labor force or to expand their work hours. They’d prefer to be home more with family, but that’s not feasible. One likely consequence of this is that more household responsibilities, including shopping, are being handled by the husbands.
     Be ready for the husbands while also joining the retailers who are changing their marketing and selling approaches to take account of what women shoppers really want:
  • Harley-Davidson’s 650 U.S. dealers have been holding special events to which only women are invited so that the salespeople can patiently explain how the SuperLow model—which features a much lower seat, significantly lighter weight, and more festive color options than past Harleys—is designed to fit the female rider’s desires. Harley also maintains a Women Riders section on its website.
  • Midas International is training employees to smile as they use a checklist to describe to the customer each procedure that will be carried out on the customer’s car. The measure of success comes whenever a customer is asked: “Would you be able to explain to your mother what happened at Midas?”
  • Best Buy invites groups of their potential customers to listen to why the stores do things in certain ways and then suggest improvements.
     Notice a theme here? Women shoppers to a greater extent than men expect retailers to explain themselves.

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Turn Your Image on a Dime
Recalibrate for Shopper Gender Trends
Identify Influencers in Family Decision Making

Sunday, December 5, 2010

Take Employee Suggestions Seriously

Your employees are an excellent resource for suggestions about how to improve store operations. Throughout their workdays, frontline employees hear what customers say and—more valuable yet—watch what customers actually end up doing. Back office employees can spot the trends and the important exceptions to trends as those employees compile the reports that an owner/operator might be reviewing only in a summarized form.
     However, chances are your employees aren’t sharing with you all the information they might. Researchers from Cornell University, University of Texas-Austin, and Penn State say that businesspeople like you fail to accurately understand why employees withhold information. In presenting their results, the researchers aimed to debunk myths they identified:
  • Myth: The most common reason employees don’t share information with managers is that they fear getting into trouble for being critical. Truth: Yes, an important motivation for not sharing information is a concern about negative consequences. About 20% of the survey respondents said they refrain from making suggestions to resolve routine problems and implement improvements because they fear they will lose out in some way for making the suggestions. However, the most common motivation for withholding is that employees conclude sharing would be a waste of their limited time. They’ve not seen sufficient evidence that managers seriously consider the suggestions.
  • Myth: Employees who give ideas for improvements during meetings or via e-mail are telling you almost everything they know that would be useful to you in carrying out your management responsibilities. Truth: About 40% of the respondents in the study said they are quite open about sharing when they conclude it won’t be futile, but consciously withhold information about other topics.
  • Myth: Women are more likely than men to withhold information, and employees with specialized professional skills are more likely to share than are other employees. Truth: The researchers found no significant differences between employees by gender or education level.
     It’s unrealistic to expect your employees to share with you every thought they have, just as it’s unrealistic for your employees to expect that you’ll share with them every secret of your business operations. Beyond the need for confidentiality, there’s not enough time in the retailing day for that kind of hand-holding, group-hug kumbaya.
     But make it clear to your employees that you do seriously consider suggestions they share with you.

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

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Saturday, December 4, 2010

Be In-Stock for the Just-In-Time Shopper

A recent post on the membership online site RetailWire began with a comment on the advantages to a retailer of Just-In-Time (JIT) inventory management. By ordering merchandise just before you’ll need it, you save on cash outlays, storage expenses, paying for merchandise that might expire before being sold, and more.
     The inspiration for the RetailWire comment was a Wall Street Journal article that points out how retail customers are adopting a JIT approach, and attributes the change to the prolonged economic recession. The article’s evidence for JIT includes:
  • Between 2008 and 2010, the number of items American shoppers keep in their pantries dropped about 20%.
  • Elie Tahari and Net-a-Porter.com are changing their selling schedules to mesh with the timelines of shoppers who choose to purchase their clothes in season rather than ahead of time.
  • Del Monte Foods and Kimberly-Clark Corporation are featuring more one-week’s supply rather than one-month’s supply package sizes of food and household products respectively.
     It’s not just the economy behind JIT. Households are getting smaller as more people choose to remain single or are living alone in their senior citizen years. And an aversion to preserved foods and yesterday’s technology leads our customers to wait until the need must be met.
     To accommodate your JIT shoppers, stay in stock for items they’ll be seeking. The IHL Group, based in Franklin, Tennessee, found customers often say the store is out-of-stock even when the retailer thinks their own store is in-stock. This is because the customer has a broader definition than the retailer often does:
  • The shelf is empty. Even when you attend to your point-of-sale and inventory level data, items to fill in the empty shelves have not made it from your receiving or storage area onto those shelves.
  • The merchandise is on a shelf, but not easily available to the customer. It could be on a high perch—which puts it out of sight—or in a locked cabinet—which puts it out of reach when there aren't store staff members right there to help.
  • The customer is looking for an item with characteristics you're not tracking. They want a specific pattern on the skirt or a smaller quantity in each package. Your recordkeeping systems indicate you have the item, but unless your staff members are talking with the shoppers, you won't realize that, in the customer's view, you're out.
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Pare Down Assortments Selectively
Help Seniors to Shop Early

Friday, December 3, 2010

Expect Non-Compete Endorsements

A recent posting on marketing blog brandchannel describes the widespread fame of R.J. Kelly III. What? You’re saying you have no idea in the world who he is? Hey, I’m saying that if you watch U.S. broadcast TV, you’ve seen a lot of the guy.
     Think Ally Bank ads in which Mr. Kelly, through perverse reverse psychology, endorses straightforward customer agreements. He plays the jerk who gives one little girl a live pony, while giving the other little girl at the table just a toy pony. In another commercial, he aims to convince us that the amazing flavor of Trident Layers chewing gum justifies his unrestrained excitement when telling his family he got a raise of not $20,000, but rather 20,000 packs. And his role as the husband in the Lowe’s ad dramatizes how Lowe’s is the place to go for home improvement advice.
     Ally Bank, Trident Layers, and Lowe’s aren’t in direct competition with each other for the shopper’s dollar, so multiple endorsements might seem to be fine. But consider the spirit of a consumer’s comment posted in response to the brandchannel piece: “And what about the woman with reddish brown hair that’s in a current Toyota commercial. She’s been in boatloads of other commercials…. (W)hen the message is tied to the person (such as the Toyota commercial where the actress says she’s a mom) it does make me think about whether she really is….”
     Credibility of the endorser and the brand drop a notch.
     Worse, though, is when someone with more celebrity recognition than an R.J. Kelly III endorses both you and your competition. Take Shaquille O’Neal’s past endorsements of Burger King, but also McDonald’s and Taco Bell. Or the realization that we might have overlooked the early signs of infidelity when Tiger Woods pitched Rolex’s Tudor wristwatches for about five years and then suddenly took up the cause for rival Tag Heuer.
     Expect endorsers in your advertising to refrain from also endorsing your direct competition. One approach is to use your own staff as endorsers in radio, television, and Internet ads. This builds credibility from the time the ad is viewed until the shopper comes into your store and can talk face-to-face with the endorsers. Research findings from University of Missouri–St. Louis, University of Tennessee-Chattanooga, Michigan State University, and Louisiana State University suggest that this cultivates self-efficacy in staff which makes them better salespeople.

Click below for more:
Get Endorsements from Groups
Select Celebrity Endorsers Who Have Credibility
Make Your Sales Staff Celebrity Endorsers
Consider Using a Business Character Icon

Thursday, December 2, 2010

See Through Anti-Waste Consumers

A great many customers and prospective customers in a range of developed countries are saying they want to take increasingly decisive actions to sustain the environment. It's an idea captured in comedian Sean Lock’s quip that limiting yourself to recycling your jam jars feels about as helpful as turning up at the aftermath of hurricane Katrina with a dustpan and brush.
     However, an important qualifier in understanding these anti-waste consumers is the phrase “are saying.” Research finds that in most of the settings studied, consumers say they want to protect the environment by purchasing less wasteful products, but devise many reasons not to do so.
     It’s true that in a study of East German consumers, researchers based at Appalachian State University, University of Southern Mississippi, and University of Wisconsin found deeply-felt aversions to throwaway products and solid commitments to frugality. But researchers at Suffolk University in the U.S. and York University in Canada say that consumers by and large use three sorts of justifications to indulge in purchasing wasteful products while saying they object to waste.
     Here are my adaptations of those three to incorporate other research findings:
  • Finances. “Especially now, when money is so tight, I want to get the most for what funds I have. If a product is manufactured or packaged in a way that produces waste, but gives me more value for my money, I deserve to be able to purchase it.”
  • Institutional dependency. “The government and the industry leaders should be setting the standards that will minimize waste. If I go it alone, my individual actions won’t make any noticeable difference. In addition, if I reduce waste, but others don’t, that’s unfair to me.” Researchers at University of Kentucky found that Swedish consumers went a step beyond this to say that if they alone aimed to reduce waste, this would challenge the expectations of conformity important in their culture.
  • Cynicism. “To succeed in the competitive marketplace, every business has to engage in wasteful practices at least occasionally.”
     Recognizing the true nature of our target markets, take into account these sorts of justifications at the same time that we conscientiously look for ways to reduce waste in what we sell.

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

Click below for more:
Be Clear What You Mean by Going Green
Know How Customers Dispose of Products
Attract with Social Consciousness
Acknowledge Customers’ Willful Ignorance