Sunday, January 2, 2011

Expect Changes in Consumer Research Findings

The tactics I give you for increasing your profitability are based on consumer research findings. This avoids problems with suggestions given in the spirit of, “It worked for me, so it’s bound to work for you.” Unless the idea has a foundation in research findings, you’re less sure why it works. Anecdotes and superstitions are poor guides for profitability.
     Still, consumer research findings have their own pitfalls. Many studies are done in artificial laboratory settings rather than in field settings like stores. And in many cases, the experimental or survey sample consists almost exclusively of college students, but the target population of your retail business might not be college students.
     I take account of those pitfalls by looking for patterns of consumer behavior findings that will hold true across a range of settings and target populations. However, an article last month in The New Yorker describes a more fundamental problem with depending on research. That problem is described well by the title of the article: “The Truth Wears Off.”
     A terrible little secret in experimental research is that previous findings are proving to be less true or even untrue in repeated investigations. Classic consumer behavior research findings proclaimed as the foundation for profit-making tactics might prove to be no more serviceable than shaky ground.
     One major reason this happens is that a powerful finding is applied too broadly. For instance, a classic research finding is that customers buy more when the salesperson exudes happiness. So it looks like the happier the salesperson, the higher the shopping cart total.
     But wait! Subsequent research from Northeastern College of Business Administration finds that a customer who is in a bad mood is especially unlikely to buy from a salesperson who clearly appears to be in a much better mood than they are.
     Okay, so be just a little more upbeat than your customer.
     But hold on! There’s an exception to this rule. The research says that when the shopper is feeling truly desperate, they have no objection at all to dealing with a highly cheerful salesperson. This is an instance where misery doesn’t want company, but instead prefers a can-do attitude.
     So how to avoid being misled by research?
  • Regularly check in with this RIMtailing blog. I’ve got your back.
  • Evaluate studies for yourself. E-mail me at with the date of my posting. I’ll reply with the literature reference.
Click below for more:
Critically Evaluate Consumer Research
Be Just a Little More Upbeat Than Your Customer
Call on Structural Equation Modeling

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