Thursday, January 27, 2011

Kick Back for Happy Hour Customers

For retailers who serve beer and liquor, Happy Hour refers to that weekday time after customers’ work shifts when the drinks sell for less or come with free finger foods. The marketing origins of Happy Hour are in a desire to build restaurant and bar patronage at times that would otherwise be slow. Now, recently announced research findings from Northwestern University and University of Hong Kong suggest that the spirits of alcoholic beverages aside, the spirit of Happy Hour can be an effective selling tactic for all sorts of retailers.
     The researchers found that after working at demanding tasks, consumers place somewhat less importance on the excellence of what retailers are offering them and much more importance on the ease of consumption. They’re more interested in short-term advantages than longer-term payoffs.
  • In your retailing, feature items that are relaxing, fun, and/or indulgent. This might mean repositioning merchandise toward the front of the store for your shoppers who are getting off work and heading home. After that, you can kick back like the customers are doing. Later, you’ll move the merchandise again to get ready for your morning customers.
  • Make the items familiar choices. Happy Hour bars do better in selling familiar cocktails than cocktails with exotic names and ingredient blends. You’ll do better by keeping the decision making straightforward. For the same reason, limit the number of choices of featured items.
  • Keep prices low, and price in whole dollars. For other times, you’ll use “just-below” pricing. Consumers perceive a price of $6.99 to be significantly lower than a price of $7.00, for instance. This is because shoppers, in order to save mental energies, tend to look toward the left of the decimal point when evaluating a price. But research finds that consumers feeling stress have a tougher time disciplining those eyeballs. They’re happier with whole dollar pricing, as long as the price is perceived as low. And it’s “happier” we’re aiming for with Happy Hour selling.
  • Use parity pricing. Researchers at Northwestern University found that people 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 decision making. Parity pricing is most effective as a selling technique with items where the prospective buyer is concerned about making the wrong decision.
Click below for more:
Round Prices to Whole Dollars for Better-Best
Use Parity Pricing to Help Customers Decide

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