Monday, October 31, 2011

Stake Out Promotional Vampire Risks

Ah, another Halloween, another day of confronting vampire costumes and vampire chortles. It’s a risk that will fly away with tomorrow’s rising sun. But the promotional vampire risks. Those have an eternal life. Don’t get bitten by advertising, publicity, and personal selling tactics which suck the life out of the intended objective—to move the merchandise.
     A recent posting on The Atlantic blog gives an example of what international market researcher Nigel Hollis calls the video vampire effect: A 2003 TV ad in the UK for a product called X-cite intended to convince the viewer that using the product would eliminate even the worst of bad breath, what the ad referred to as “dog breath.” At the start of the ad was a disheveled man awakening on a couch, and at the end of the ad, he quickly swallowed an X-cite before being kissed by a woman who has entered the room. In between the beginning and end of the ad, the man opens his mouth and, via special effects magic, regurgitates a dog.
     The ad drew plenty of attention. This is usually a fine outcome. However, the shock of the narrative could easily erase any memories of the advertiser and the claimed product benefits. The main message was sucked away.
     I could argue that the shock likely caused loads to people to want to see the ad repeatedly and telling their friends about it, resulting in more exposure for X-cite. That’s true, and if the brand name had been featured throughout, rather than saved for a second at the end in a mystery style, the effect might have been bloody good. Or if retailers had posters in their stores with a photo of the dog and the X-cite name, it could work. Shock does sell. Consider ticket sales for haunted houses and raunchy movies.
     Humor can also become a promotional vampire. People pay more attention to the joke than to the sales message. In another vein, though, humor sometimes draws away objections to the purchase. Researchers at Georgetown University and University of Washington found that a joke which is not immediately understand can be highly effective in making a sale. The shopper's mental energies are taken with trying to figure out the humor, and this distracts the customer from thinking about reasons not to buy. Humor could be useful in moving the indecisive customer to the cashier station.

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Defend Goal Line with Provocative Offensive
Joke Around to Facilitate the Sale

Sunday, October 30, 2011

Describe Fully-Loaded Items to the Focused

What’s an item you sell which is available with a number of optional features? The car that can be ordered with or without the spoiler and the racing stripes? The car wash that can be purchased as a one-star version with only dirt removal or the five-star version, which includes the upholstery shampoo, hand waxing, and more?
     A traditional technique for selling such items to the shopper is to initially present the base model and then, once there’s buy-in, list the available options. The technique is especially attractive now, when shoppers are so price-sensitive.
     That’s fine. However, in the process, remember to describe the fully-loaded model. Research at Bentley University compared two selection frames: In the first, the shopper was invited to add desired options to a base model. In the second, the shopper was invited to delete undesired options from a fully-loaded model. In a set of experiments, the researchers found that consumers attending to this single purchase decision ended up selecting a larger number of options with the delete frame.
  • This effect is more likely to occur with products and services in which the experience of using the purchase has value, such as a car. It is less likely to occur with highly functional products, such as a water heater.
  • When the consumer has a great many shopping decisions to make, the effect is less likely. Here, the person might become irritated at needing to wade through a seemingly endless number of choices.
  • Shoppers who appreciate the appeal of the fully-loaded model become more likely to consider the price of the model with fewer options to be a good deal. Therefore, the introduction of the fully-loaded model can be an especially helpful selling technique at the point where the shopper has concerns about the price of whatever other model they have their eye on.
  • Those who buy less than the full meal deal might be better off. In a set of studies conducted at University of Maryland, participants were offered a choice from three versions of an item. More than 60% of the participants selected the most complex of the three. After making their selection, each participant was invited to add more features from a list totaling 25. The average number of additional features chosen was 20. But post-usage inquiries showed that those who selected a simpler version of the product at the start were much happier.
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Offer Customers Basic Plus Add-Ons
Offer Fundamental Indulgences
Anchor Browsers onto Higher Prices
Stimulate Bragging Rights from Complexity

Saturday, October 29, 2011

Authenticate Subtly

Some years ago, researchers at University of Wisconsin-Madison documented how Starbucks had become a victim of their own successful branding of the shops as an authentic coffee experience. The research found that many customers, after being convinced of the importance of such an experience, decided Starbucks was bragging too much about their authenticity. Those customers gave up on Starbucks and aimed for other shops which showed more humility. Consumers figured that the more you highlight your authenticity, the less authentic you are.
     Later, a New York Times article documented anecdotally the same sort of phenomenon with craft and artisanal offerings. Consumers are experiencing an overabundance of these products. Home furnishings retailer West Elm partners with Etsy, a marketer of handmade pieces. Pottery Barn highlights their “Found” collection of distinctive items collected from around the globe. CB2, a spinoff from retailer Crate and Barrel, hired a craftsman to hand-build a limited edition of 200 American black walnut side tables, which were peddled at twelve stores and via the online catalog.
     Even at a production run of 200, a claim of uniqueness or of handcrafted authenticity wears like a thin veneer. The artisan was quoted in the NYT article as saying, “I felt like an employee at a Ford plant, drilling 1,200 holes in a day or two.” A brag of “uniquely authentic” starts sounding to consumers like a synonym for “faddishly routine.” The Wisconsin researchers referred to this as a “doppelganger brand image.” Doppelganger is defined as a ghostly counterpart of a living entity.
     How to avoid the problem? Maintain the appeal of authenticity by featuring it subtly.
     Retailing consultant Paco Underhill, author of Why We Buy, praised an imaginative use of product adjacencies by a Restoration Hardware store. An expensive chest being offered for sale had a large old-fashioned jar positioned on top. Inside the jar was a collection of ball-peen hammers also being offered for sale.
     This directly contradicts the peanut-butter-and-jelly principle of product adjacencies. The grocer stocks the jellies on shelves close to where he shelves the peanut butter because when a shopper puts a peanut butter jar into the shopping cart, she’s likely to start thinking, “Where is the jelly?”
     The chest/hammers adjacency is more whimsical and serves a function known by consumer psychologists as priming. The authenticity implied by the large old-fashioned jar subtly spreads to the consumer’s associations to the ball-peen hammers.

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

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Prime Customer Interest with Adjacencies
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Brag About Your Retailing Humility

Friday, October 28, 2011

Set Unreasonable Goals Subject to Revision

Steve Jobs biographer Walter Isaacson has described how Mr. Jobs would periodically distort reality when setting goals. He’d establish deadlines that were impossible to meet, and he’d then insist the goals were reasonable.
     There were occasions in which this distortion of reality created a new reality: The goal was met. In other cases, Mr. Jobs had to accept the limitations which accompany reality distortion. He’d end up revising a goal.
     There are times when you can motivate yourself and your staff to scale a Mount Everest of profitability challenges by setting unreasonable goals and then proving them possible by achieving them. Still, to preserve the well-being of yourself, your business, and your staff, be sure each unreasonable goal is subject to revision.
     Study findings from University of British Columbia and Hong Kong University of Science and Technology provide insight about how to do this. Researchers considered goal pursuit, achievement, failure, and abandonment. The kernel of their advice: Identify how much of the motivation to achieve the goal is coming from within yourself and how much from outside influences. The more that comes from outside influences, the sooner you should respond to shortfalls by choosing a lower mountain to climb. Disengage from the unreachable. On the other hand, the greater the degree to which the motivation to achieve the goal comes from within yourself, the wiser it is to greet goal achievement by next embarking on achievement of a more ambitious goal.
     Other research, from San Francisco State University and York University, shows how a decision to climb the unreasonably challenging mountain can distort both the goal and the teamwork involved in achieving it. The subjects of study in the research were people who signed on for a commercial climbing expedition of Mount Everest, a purchase decision costing in the range of $50,000.
     The original goal was to reach the summit, and the default method was to work as a team. However, as the paying climbers would get closer to the summit, their goal became more focused on achieving a unique distinction, such as being the first woman of a given nationality to climb Everest. The consequence was a shift from collaboration and support to competitiveness and exclusion.
     Overly ambitious goals engender fear. Fear can help you move fast and think sharply. When excessive, though, fear can immobilize a retailer and destroy a work team.

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

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Keep Your Eye on the Goal
Use Your Fear to Your Advantage

Thursday, October 27, 2011

Cop Keystones as Historical Mementos

Following Hurricane Katrina’s destruction, U.S. Senator Joseph Lieberman described the Department of Homeland Security’s responders as people who, “ran around like Keystone Kops, uncertain about what they were supposed to do or uncertain how to do it.”
     The allusion was to the stock players in silent movie comedies from Mack Sennett’s Keystone Film Company. The Keystone Kops went in all directions at once, jumped up and down, and drove their vehicles recklessly, all while failing to apprehend the perpetrator of the crime.
     The implication of “Keystone Kops” has stayed solid over the decades, but the constituent words do have additional meanings. Think about “cop” in the sense of grabbing away. Think about “keystone” in the retailing sense of pricing an item at double whatever the supplier charged you.
     Like the Keystone Kops, keystone pricing should be considered as history. This method of setting margins violates the teachings of behavioral pricing research—teachings that allow you to maximize your profitability. Shoppers pay you for the value they place on the item, not for some multiple of what you paid for it.
     Why then is keystone pricing supposedly resurging? Why did the editors of Gifts and Decorative Accessories decide to have a feature article titled, “Let’s Kill Keystone”?
     I’ve concluded it has to do with the tough economy. The smart retailers realize they can’t keep cutting prices if they expect to survive, so they defer to keystone pricing to discipline themselves. The understaffed retail businesses think they don’t have the time to assess the proper margin on each item individually, so they depend on the vendor to say what to charge, and many vendors are accustomed to quoting keystone pricing.
     Unlike the Keystone Kops, keystone pricing, then, is an example of too little activity, not too much. The Kops didn’t catch the criminal, but at least their activity amused us.
     Devote your time to setting proper margins. They are your lifeblood. Yes, the price you charge the customer for an item certainly bears a relationship to what you paid the supplier. And shoppers are particularly likely to accept a price increase when you explain the increase is due to your costs from the supplier going up.
     The problem with keystone pricing is the automatic formula applied across the board, across the shelves and racks. Set your margins as close as possible to the level of the individual Stock Keeping Unit (SKU).

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Set Your Own Prices
Set Higher Margins on Low Velocity Items
Prepare Customers for Price Increases

Wednesday, October 26, 2011

Relax Customers of Negotiated Price Items

Develop positive attitudes in your shoppers. Research finds that happy shoppers are more likely to buy your products and services. One big reason for this is that shoppers who are feeling positive—for whatever reasons—generalize the positive tone to the items they’re considering, so they see what you’re selling as valuable. They’re also willing to pay more for your products and services because part of the value is now the positive tone associated with your store.
     Researchers at Arizona State University and University of Minnesota call this the “rose-colored glasses effect,” and point out that research has usually assumed it applies equally to all sorts of products and services offered by the retailer. However, their findings say that the lenses in those glasses come in at least two different hues:
  • When shoppers have been made to feel proud and ambitious, they’ve a greater interest in products they can show off to others, but their interest in functional products—such as appliances unlikely to be seen by friends or family—doesn’t increase nearly as much.
  • When the shoppers’ positive feelings consist of contentment and satisfaction with the ways things are now, their interest in functional products grows much more than does their interest in items with social esteem.
     Now let’s shift our profitability attention from positive attitudes to a positive feeling, namely relaxation. It turns out that we can take satisfaction as well as allow some researchers at Columbia University, National University of Singapore, and University of Hong Kong to take pride in their finding that shoppers who are relaxed will be willing to pay more for items where the price is negotiated.
     The 670 study participants were exposed to bidding scenarios on a variety of products and services. Some were relaxed beforehand using either music or videos. The other study participants were not relaxed before the bidding.
     The relaxed consumers’ bids for a digital camera were consistently higher than the bids of those not relaxed. Actually, the relaxed consumers’ bids averaged about 15% above the fair market value of the camera.
     There were similar results for merchandise ranging from indulgent items—ice cream sundaes—to exciting offerings—bungee jumping. The relaxed participants bid higher.
     The researchers say this is because relaxation induces the shopper to think about the possibilities of the item (capture memories with the camera) more than about the item’s specific features (the camera’s megapixel count).

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Emphasize Pride or Contentment in Customers

Tuesday, October 25, 2011

Grab On with Weak Connections

“Friendship is born at that moment when one person says to another: What! You too? I thought I was the only one.” So wrote C. S. Lewis, well-known to many as the author of The Lion, the Witch and the Wardrobe.
     This quote, with which I begin, was where Stuart E. Jackson, a vice president of L.E.K Consulting, ended a Bloomberg Businessweek piece. Mr. Jackson had described the value in business of weak links—connections you make to acquaintances of customers when you know very little about the acquaintances.
     Weak links don’t substitute for strong ones; they augment them. It’s the difference between saying to customers, “Please recommend us to your friends,” and, “Please recommend us to your friends, and recommend those friends talk about us to their friends.”
     To better fit the realm of retailing and the world of social networking, I’d tweak the C. S. Lewis quote to read, “A customer referral relationship is born at that moment when the consumer says about the retailer: What! I’m thinking there are many others who, like me, could benefit from what you offer. I’m far from being the only one.”
     People yearn for connection, so links can be based on considerations having little to do with the product or service. For instance, when a customer finds they have the same birthday or place of birth as a salesperson, the customer gets more interested in making a purchase and is more likely to be satisfied with the purchases.
     Researchers at University of British Columbia and INSEAD Singapore set up a study in which a personal trainer offered a fitness program to prospective enrollees. Participants who believed the fitness instructor was born on the same day as them became more likely to rate a sample program highly and to sign up for a membership. And dental patients who believed they were born in the same place as their dentist were more likely to rate their care highly and to schedule future appointments at that clinic.
     The BBW piece points out that spreading the news about your store through weak links goes best when you’re offering a glorious product or service. In honor of C. S. Lewis, who gained spiritual sustenance from a Belfast garden, I’ll end with, “The connections thicken, like roots in a garden patiently and persistently winding and weaving their ways through the soil, linking to sources of nourishment.”

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Announce Commonalities with Shoppers
Disclose Selectively to Facebook Referrals

Monday, October 24, 2011

Climb Out of Mistaken Assumptions

The 2011 Bathroom Blogfest theme is “Climbing Out.” As last year, I’m flush with excitement about participating. The proximity to Oktoberfest makes it an absolutely festive occasion. First you go to the biergarten, later you got to go. To Bathroom Blogfest postings, I mean.
     Each blogger participant is to write from his/her interpretation of “climbing out.” I’ve selected a story that has reminded me to move above mistaken assumptions.
     You see, I assumed that if you found yourself using the same external consultant repeatedly to train staff, you should have that consultant teach a few of your people how to do the training themselves. This saves you money.
     Therefore, when a client kept calling me back to train his staff, I thought I might help by selecting a few people I could teach to do the training tasks, with me providing periodic updates. I shared my views a number of times with the company president. Each time I would talk with him, he’d listen courteously. Then three months later, the company would call me again to arrange for me to fly out there, but never to train the trainers.
     Finally, I decided to make a stronger case. The president listened, and then, in a wonderful classic Texas drawl, launched his reply.
     “You’ve been working with us for some time now, Bruce. You’ve seen how the company has grown. We have more and more people, more and more offices for those people, more and more buildings for those offices.
     “And you may not have thought about it, Bruce, but when you have all those people, all those offices, all those buildings, well, you need to have a lot of men’s rooms and women’s rooms.”
     At this point, I’m wondering where this guy is going. Next came the rest:
     “And when you have all those toilets, Bruce, some of them will get stuffed up real bad. I mean, it’s a matter of the odds. More toilets, more badly stuffed-up toilets.
     “Whenever it happens, well, we call up a plumber. And another truth of this is that sometimes the plumber can’t come right away. The trip from town out here to us can take a bit of a while.
     “Which gets to my point, Bruce. You see, when that plumber finally does arrive, the last thing in the world we want him to do is to teach us how to unplug toilets.”

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Fork Over Those Smaller Plates
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Sunday, October 23, 2011

Fill In the Hourglass for Customers

As a consumer, what are you experiencing when you make a request of your computerized device and the delay in response is evidenced by an hourglass icon or a little arrow whizzing around in a circle?
     I know it is a whole league better than having absolutely no acknowledgement that your request has been received. But if you’re like most of the participants in a research study done at Harvard University about the issue, the hourglass soon starts you thinking, “What’s taking so long?”
     The researchers also found that a remedy is to answer the question for the consumer. Whether the delay is with an internet, telephone, or face-to-face order, customers accept waiting times better when they are shown or told about the work you’re doing on their behalf.
     Doing the work in front of the customer is one way to accomplish this. Researchers at University of Singapore and University of Toronto found that consumers evaluated the price of a locksmith service as a better value when the service took longer than when the lock was picked faster.
     How to explain all this and get the best from it?
  • The customer sees that progress is being made. Say how far along you are and how much further you have to go. A progress bar is better than an hourglass.
  • People value the outcome more when recognizing what has gone into satisfying the request. Many of the people in the Harvard study who had the hourglass filled in with information ended up more satisfied than those who didn’t need to wait at all for their requests to be fulfilled.
  • The technique builds anticipation. Researchers at University of California-San Diego and Duke University discovered that although people say they would never pay more money if it meant waiting longer for delivery, those same people report experiencing substantial pleasure from anticipation during the wait. Consumers sometimes don’t know what they’d like, or they prefer not to tell the retailer.
  • Amusement. The Harvard study found that you can ease waiting anxiety and produce higher satisfaction even by depicting work that you didn’t really do. This struck the researchers as lying to the customer. I see it as entertaining the customer, and entertainment helps pass the time. In hotel elevator lobbies, a large mirror causes time to go faster for waiting guests. Airport waiting areas use television sets with the sound volume kept low.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Saturday, October 22, 2011

Turn Away from Turnkey

In an interview with the Wall Street Journal, David M. Overton, founder of Cheesecake Factory, Inc., was asked if he’d considered franchising. He answered that the business is too complicated for that. To start, there are over 200 items on the menu, and updates to the offerings are made frequently. He pointed out that, although many of the company procedures are standardized, there are no Cheesecake Factory clones around.
     A business format which has every element standardized is referred to as “turnkey.” The implication is that the owner or operator can succeed without the need for additional creative work. You turn the key and the money flows.
     Turnkey is key in the sense of keeping it simple for customers. Still, turn away from overly simplistic turnkey retailing.
     We might think of a franchise retailing model, such as McDonald’s, as turnkey. The procedures are standardized for the owner. But the worldwide success of McDonald’s happens when each franchisee moves beyond the cookie cutter to become distinctive. Earlier this year, McDonald’s received recognition from international advertising agency Euro RSCG Worldwide for ease in food selection because of customizing for the locale. In India, McDonald’s offers the Maharaja Mac, made with lamb. In Japan, there are shrimp burgers.
     It’s true this can lead to the customer needing to think a bit harder. One reader comment left on the WSJ posting about The Cheesecake Factory is, “I thought they only sold cheesecake.” Then once you wrap your brain around that, and before you wrap your chops around the creamy delicacy, you’ll be presented with a menu listing all those items.
     As for the franchisees, the tale is told of a visitor to a crowded McDonald’s restaurant in New York City who, when he finally makes it to the counter, orders two glasses of red wine. The young man behind the counter, a well-traveled individual, replies, “In both the content of your request and your manner of speaking, I sense that you are visiting us from France and this is your very first visit to a McDonald’s in America. I am aware that wine is often available at McDonald’s restaurants in your home country. But that is not how we operate here in the U.S.”
     With a puzzled look on his face, the Frenchman gazes around at the lines of customers. “You mean,” he asks the counter clerk, “people come here for the food?”

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Simplify for the Shopper
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Friday, October 21, 2011

Slow Down on Intrusive Sloganeering

As we move into the full court press of political campaigning, and as the press fully courts sound bites from candidates, prepare for sloganeering. For Barack Obama in 2008, it was “Yes We Can!.” For Ross Perot in 1992, it was “Ross for Boss.”
     The effectiveness of political slogans follows the rules of consumer psychology. For example, research finds that rhyming slogans are memorable. But a memorable slogan doesn’t guarantee making the sale. Ross did not get to be America’s boss.
     The same goes for store slogans. In fact, a powerful slogan sometimes causes consumers to do the opposite of what the retailer intended.
     Researchers at University of Miami, University of California-Berkeley, and Hong Kong University of Science and Technology presented people with a slogan designed to free up spending: “Luxury. You deserve it.” The researchers compared the effects against that from exposure to a spending-neutral slogan: “Time is what you make of it.”
     Those exposed to the luxury slogan decided to spend 26% less than those exposed to the neutral slogan. They rebelled against the intrusive urging in the slogan.
     Does it work in the opposite direction? Yes. People exposed to “Dress for less” decided to spend 29% more than a matching group primed with the neutral slogan.
     So suppose I ask your shoppers to think about the slogan “Save money. Live better,” and then the slogan, “The good life at a great price.” You might recognize that the first of those slogans has been used by Walmart, and the second one by Sears. Both store names are associated with thriftiness. But I’m asking your shoppers to think about the slogans, not the store names.
     The Miami/Berkeley/Hong Kong team found that thinking about either of those slogans increases the amount of money people are willing to spend during a shopping trip. In fact, the amount was twice as much after thinking about the slogan than after thinking about the store name. With the store name, the average amount study participants were willing to spend was $94. With the slogan, it was $184.
     Maybe the lesson for retailers is to put the message in the store name. Ross Perot wasn’t a winner, but California-based Ross Stores seem to be operating quite well under the name Ross Dress for Less. For the first half of 2011, earnings per share were up 23% over those for the first half of 2010.

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Thursday, October 20, 2011

Incorporate Vending Machine Technologies

According to a recent CNBC posting, shoppers between ages 18 and 29 years—called variously Gen Y and Millennials—really like to buy from vending machines. The explanation given is that young adult consumers embrace technology. Since those young adults have plenty of future in the marketplace and since other age groups also embrace technology, incorporate vending machines into your business.
  • Have vending machines within your brick-and-mortar store to sell certain items. Hundreds of Macy’s stores have had vending machines to sell electronics products. From a shopper psychology perspective, it’s important that consumers be told by signage they can seek advice from sales personnel about what to purchase from the machines. In addition, train your staff so that when a customer asks a salesperson for a product which is sold only from the machine, the salesperson walks the customer to the machine or hands off the customer to another salesperson who will do this.
  • Extend your store name and your selling possibilities to locations outside your store by placing vending machines in locations likely to have large numbers of potential customers. Best Buy Express vending machines are located in airports and hotels, each machine selling electronics products with which the customer probably is already familiar. With machine placements outside your store, go beyond allowing customers to return unsatisfactory items to your store. Encourage them to do so. When customers come to a store and problems are resolved smoothly, they are likely to make additional purchases there. You’ll be carrying a broader selection of options than what’s in the machine.
  • Make it a point to offer quality items from the machines. Older consumers associate vending machines with stale food and cheaply-made tchotchkes. To change those sorts of barriers to usage, Canteen’s 2bU vending program features local and organic items. Even if you’re selling nutritionally vapid stuff, use technology to add high-class polish. The Vend Ever Cotton Candy Factory produces the confection while you watch, and the output is said to be warmer and fluffier than what you could buy at the fair booth next to the deep-fried Oreos stand.
  • Think speed. Your younger consumers are. Kraft Foods and Samsung participated in development of a vending machine which allows your customer to select multiple items rather than make each purchase separately.
  • Think credit. Gen Y prefers not to use cash. Use machines that accept credit and debit cards and mobile wallets.
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Position Yourself for Vending Machine Selling

Wednesday, October 19, 2011

Search Me!

How do prospective shoppers go about finding your store? Online information provider sponsored a study which identified three patterns called Answer Me, Educate Me, and Inspire Me.
     The study was conducted by Latitude Research, which advises companies on advertising technologies. The sample included 928 Americans, ages 21-54, with an annual household income of at least $50,000. The methodology was purely qualitative, and the sample was not necessarily representative of American adult consumers. I consider such studies to be most valuable in providing suggestions rather than firm conclusions.
     Here are the three patterns, augmented with reliable consumer psychology research findings:
  • Answer Me. About half of all searches have as an objective getting just enough information to direct further actions. Keep it quick and direct. These are not necessarily urgent searches, though. The consumer is often willing to come back for another brief shot later. When placing website ads, you might want to use graphics and animation to draw attention, but it is the informative text shoppers will focus on. Easy interaction means making it unambiguous what can be clicked and what the click will give you. Higher income consumers, men, and older consumers are especially likely to be Answer Me searchers. Searches for fashion, beauty, and entertainment retailers tend to be Answer Me.
  • Educate Me. About one-quarter of searches aim for a comprehensive understanding and varying perspectives. The consumer is willing to do repeated searches, spend time on each search, and explore associated topics. In your internet ads, give plenty of links to related material, but have those open in separate windows so the consumer will be back to you when done with the rest. Women are more likely than men to be Educate Me searchers. Searches for health care and finance retailers tend to be Educate Me.
  • Inspire Me. The other one-quarter of searches are done with no narrow goal in mind. These consumers welcome having the search results guide them toward how to make a purchase selection, not only what to purchase. The Inspire Me consumers start with brief exploratory searches and then, as they better articulate their goals, they’ll probably migrate toward the patterns of Educate Me and Answer Me consumers. Excite the imagination of these searchers by offering many alternatives. Younger consumers are more likely than older consumers to be Inspire Me searchers. Inquiries to find travel and home/garden retailers tend to be Inspire Me.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Tuesday, October 18, 2011

Practice Personality

Since Jennifer L. Aaker at UCLA published her research years ago describing five primary dimensions of brand personality, many other researchers have applied the five dimensions to better understand why consumers do what they do.
     I’ve adapted the framework as I’ve worked with retailers to project their brand better by maintaining a consistent personality. Prof. Aaker’s studies had included not only product brand names like Crest toothpaste, but also retailer branding like Avon, Holiday Inn, Kmart, Macy’s, Marriott, McDonald’s, Metropolitan Life, Prudential, and Sears.
     Here are the personality dimension names and traits that were statistically associated with each dimension in the early research:
  • Sincerity: Down-to-earth, honest, wholesome, cheerful
  • Excitement: Daring, spirited, imaginative, up-to-date
  • Competence: Reliable, intelligent, successful
  • Sophistication: Upper class, charming
  • Ruggedness: Outdoorsy, tough
     Now, more recent research at University of Illinois-Urbana/Champaign and Norwegian Institute of Food, Fisheries and Aquaculture Research adds other hints about how to project the image you’ve chosen. Here’s my adaptation of those recommendations for the small to midsize retail business:
  • Sincerity: Tell shoppers about your attention to families as customers and employees.
  • Excitement: Give shoppers experiences that hadn’t expected, even if the surprises may startle them briefly.
  • Competence: Brag about the expertise of your store staff while also demonstrating respect for the expertise of the shoppers.
  • Sophistication: Use tactics associated with selling to women, such as harmonious flow in the merchandising and in the aisle’s shopping paths.
  • Ruggedness: Aim for the sharp contrast and clear directions men prefer in their shopping, but recognize that since women do much of the shopping, you probably won’t want to eschew feminine touches altogether.
     The Illinois/Norwegian researchers also suggest you fit your store’s retailing personality to how your target market members want to see themselves. But realize that whatever you choose to be on each of the dimensions will always carry some good and bad points. For instance, stores with a sincere, competent, or less exciting personality are usually highly respected, but may have trouble keeping customers after a product recall or bad customer service. That’s because the target market members don’t like surprises when the surprises make it look like the retailer is inept.
     But with stores that have an exciting, less sincere, or less competent personality, customers are ready for a reaction like, “We make shopping more fun with the unexpected,” and, “We’re always learning so we can get better.”

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

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Project Your Store's Personality
Satisfy Each Customer’s Self-Concept
Incorporate Family Values into Your Retailing
Overcome Gender Stereotypes

Monday, October 17, 2011

Flash Mob Scenarios Before Staff Eyes

Two different news flashes:
  • The National Retail Federation definesflash mobs” as “groups of people who assemble suddenly in a public place, perform an unusual and sometimes seemingly pointless act for a brief time then disperse.” Song performances in food courts and mass dancing in train stations are flash mob events many have seen on internet videos.
  • Psychologists studying “life flashed before my eyes” phenomena say it’s activated when a person experiences sudden emotional trauma. Images from the person’s past run very rapidly through the brain, disrupting attention to what is happening around the person. It’s also been reported often that during the flash, no sounds outside the body are perceived.
     Let’s combine those two: When a retail store is confronted by an unexpected flash mob, the shocked staff can go mentally numb and close down their sensory channels. Among other things, this erodes defenses against criminal behavior.
  • Last April, about 20 teens rushed into a G-Star Rack clothing store in Washington, DC and rushed out with $20,000 worth of stolen items.
  • Last June, about 40 people, organized via social media, flash mobbed the Upper Darby Sears in Pennsylvania, and within minutes, left the store with thousands of dollars worth of merchandise. This incident was part of a string of assaults and property destruction committed by gangs.
  • The London area riots this year followed the flash mob pattern of mobilizing via social media channels.
     No song and dance in any of these incidents, except in the sense of putting one over on store staff.
     By their nature, flash mobs are difficult to anticipate. Monitoring social media channels might help. So can keeping alert for unusually large congregations of young people or people with mobile devices inside or close outside your store.
     From a psychological standpoint, a most valuable measure is to rehearse staff on how to handle all sorts of situations in managing crowds. This reduces, or can even eliminate, the traumatic shock. In particular, unambiguously designate who to contact for assistance during the incident and then after the incident.
     When staff are clear-headed, they can better avoid injury to themselves, coworkers, and customers. They also can look and listen, making mental notes about the flash mob criminals and about which items are being stolen.
     Even with all these, you’ll want to arrange for your staff and yourself to receive counseling after being victimized by a criminal flash mob.

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Use Psychology for Shopper Crowd Management
Use Shopper Psychology to Curb Shoplifting
Violate Policies If Faced with Violence

Sunday, October 16, 2011

Call Their Bluff

A hotel employee who was otherwise meeting job expectations began repeatedly arriving late for work. It became enough of a problem that the supervisor called the employee aside to discuss the behavior and point out the consequences. Current negative consequences for the hotel’s business. Potential highly negative consequences for the employee if the tardiness continued.
     The employee’s reply? “My alarm clock broke, and I’ve not gotten a new one yet.”
     The supervisor’s response? He appropriated a clock radio from Housekeeping and presented it to the employee with the words, “Now you’ve no reason to be late. I expect you to arrive at work on time every day.”
     And the employee did.
     At least for a while.
     When I’ve told that true story lately to retailers, they initially look as if they don’t believe changing the behavior could be that easy. Then after a few moments, they come up with an explanation for why it worked so well. Before reading on, please look away and decide how you would explain it.
     Okay, here are the three explanations I’m hearing:
  • The employee very much wanted to meet job expectations, but had to choose between buying food for his family and buying an alarm clock. The gift of the alarm clock removed all barriers to promptness.
  • The gift of the alarm clock embarrassed the employee into changing his habits, perhaps because the employee had lied when saying he didn’t have an alarm clock.
  • The gift of the alarm clock showed the employee that the supervisor was committed to helping the employee succeed, and this motivated the employee to better meet performance expectations.
     Each of these three might be viewed as calling the employee’s bluff—challenging the employee to prove what he’s saying is true. It’s a technique useful with both staff and shoppers. When the browser keeps threatening to leave if you don’t come up with a better price, you might say, “If you’re not able to afford this item, I’ve another option at the price point you’re looking for now.”
     Call the bluff using respect, concern, and empathy. Never obviously shame the person. The tone is of business reality, not a moral lesson. What you’ve spotted as bluff might actually be an insurmountable barrier for the person or the group. People will be less dissatisfied and less likely to blame the retailer for a problem when they’ve been treated with care.

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

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Negotiate Through Shopper Rituals
Solicit Information from New Employees
Emphasize Empathy in Providing Services

My thanks to Josh Cole, Care Coordination Supervisor at Access to Healthcare Network in Reno, Nevada for allowing me to tell you this story from his personal experience.

Saturday, October 15, 2011

Party Hearty with Scavenger Hunt Promotions

How about sending your target audience members out on a scavenger hunt? That’s the game where you give participants a list of items to find and maybe clues to finding the items. The first player or team to fulfill the list wins.
     It’s said that renowned party hostess Elsa Maxwell coined the name in the 1930s.
     Since then, scavenger hunts have been used by retailers to build excitement and knowledge about offerings. Here are two current examples, as reported by PROMO:
  • A promotion for Dodge dealers attracted more than one million YouTube hits. The viewers were watching people finding one of the three Dodge Journey cars hidden in a scenic U.S. location. Each clue included information about the Journey’s features.
  • Cathay Pacific is publicizing its new non-stop Chicago-Hong Kong route with a challenge to collect experiences. Take a photo of yourself at the entrance to Chicago’s Chinatown and then a photo of yourself reclining in the Cathay Pacific business class “Comfy Seat” sample at O’Hare Airport.
     Customers have always loved to play games used by retailers as promotions. Scratch-off discounts. Sweepstakes. “Design our new logo” or “Name our new service” or, decades ago, “Tell us in 25 words or less why you shop at our store.” Scavenger hunts follow that spirit, with a blend of the virtual and real worlds.
     Here are tips on using the tactic in ways that maximize profits:
  • Get people involved for the joy of the play. In early uses of games, retailers and manufacturers learned that there needed to be tangible prizes for maximum participant involvement, although the value of the prizes could be quite modest. This love of the game has blossomed further as a side effect of the popularity of e-commerce and the mobile and desktop devices shoppers use for e-commerce. The word “gaming” has morphed from serving as a euphemism for “gambling” into a shorthand for “playing games on a computerized gadget.”
  • Don’t get gamed. One form of scavenger hunt is the mobile device check-in: Consumers earn points by using a location-sensitive mobile device to confirm visits to a brick-and-mortar sales location. At one point, Virgin America was giving frequent flier points to people who check in at the airline’s baggage claim or ticketing areas. Trouble is this can increase foot traffic while being little more than a game to collect points without the consumer thinking at all about buying something.
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Guard Your Promotions Against Being Gamed
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Friday, October 14, 2011

Supply Quality Time to Senior Shoppers

Last spring, a total of 2,947 respondents in 23 countries—all respondents at least age 60—were surveyed by management consulting firm A.T. Kearney for their Global Maturing Consumer study. This older population carries growing profitability potential for retailers. Their number is increasing about 2.6% annually, compared to 1.2% for all ages. The rate for ages 80 up is increasing about 4% yearly.
     The Global Maturing Consumer project did not include a representative sample of all people in the age ranges 60 years and above: About half the surveys were conducted in shopping environments, ranging from street markets and small stores to hypermarkets and shopping malls. There was an overrepresentation of people with above-average incomes and of consumers in developed countries.
     I view these biases in sample selection as adding to the value of the results. As I see it, retailers should be especially interested in how to influence consumers who are out shopping with ample money to spend and live in areas with a richness of product choices. Another indicator of opportunities for you is that a prevailing view among the respondents was that senior shoppers do not think they are being well-served by the retailers they’re doing business with now.
     Here are shopper psychology recommendations I’ve based on the Global Maturing Consumer report blended with other findings about this population:
  • Aim for weekday morning hours. Older consumers consider shopping to be a social experience. They want to have the time to talk with salespeople and with other shoppers. For most retailers, this works out better at weekday morning times, since the store is less busy. That’s fine, too, for the older shoppers. They are more alert in the morning.
  • Offer multifunction products. Seniors are more likely to have limited storage space and to be concerned with spoilage. The older they are, the more likely they are to walk to shopping sites or take public transit on which carrying large bags can be a bother. They buy fewer items but are willing to spend more per item than are younger shoppers.
  • Limit promotions to high-quality brand-name items. With advancing age comes difficulty in reading ads, signage, and especially product labels. As a result, older consumers come to depend on brand reputation. About 43% of the Global Maturing Consumer respondents said they would consider buying promotional items only if the quality is as good as what they habitually purchase.
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Help Seniors to Shop Early
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Downsize for Elderly Shoppers

Thursday, October 13, 2011

Rise to the Occasion of Profitability

Think of bread as money.
     I’m not talking here about the NPR story of how 1930’s jazz legend Lester Young would ask, when offered a gig, “How does the bread smell?,” leading to the cool cats calling cash by the names “bread” and “dough.” No, in this case, I’m talking about this week’s posting which discussed how bakery cafés, such as Panera, continue to gain market share, rising above figures for restaurants in general. According to market research firm Technomic, 71% of U.S. consumers currently report having visited a bakery café, up from 43% three years ago.
     What has contributed to this growth, and how might all retailers cash in?
  • Provide moderate-cost indulgences. People who want to eat out are finding it easier to justify going to casual sit-down restaurants than to white-tablecloth fine-dining locations. Toward the start of the economic downturn, Tiffany developed lower priced items to carry the luxury name, but for sale in mall stores that aren’t Tiffany’s. Determine what specialty items you can offer to draw shoppers into your store. Having a few items associated with luxury can influence the consumer’s perception of other items in your store. The fruit juice with the sandwich seems more like wine.
  • Offer options. Technomic reports that bakery cafés have substantially increased their use of ciabatta, sourdough and pumpernickel breads over the past three years. Still, variety trumps exotic: Respondents to the survey who frequent bakery cafés said that for lunch and dinner sandwiches, tortillas are their top choice. For the small to midsize retailer with limited shelf space, achieving variety might mean rotating in new items while retiring—even if temporarily—other items.
  • Recognize unfulfilled potential. The Technomic data point to the advantages of even more variety. About 34% of customers agreed with the statement that they’d visit bakery cafés more often if a broader range of breakfast items were made available. Ask your customers what you didn’t have. Often, cashiers are instructed to ask customers, “Do you find everything you needed?” But customers often want items they don't need. If you query only about needs, you're missing out on possible sales. A better question is, "Did you find everything you wanted?,” and better yet is, “What items would you like to see in our store that we don't have now?”
  • Attend to fragrances. If you don’t have fresh baked bread and pastries, what do you have?
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Stay Ready to Sell Luxury
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Ask Customers What You Didn't Have
Use Fragrances to Pace Shoppers

Wednesday, October 12, 2011

Stand Out

You want your selling messages to be prominent so they’ll catch the attention of shoppers. Yes, the payoff is convincing the prospect to make the purchase. But you have to catch the attention first. And yes, there are ways to draw in the consumer aside from message prominence. Still, your attention to perception is fundamental.
     Researchers at University of Southern California and University of Texas-Austin summarized what consumer behavior studies say about standing out. Here is my adaptation of their list:
  • Live large. Consumers are more likely to notice bigger ads than smaller ones and to listen more closely to the same salesperson when she’s making effusive gestures rather than restrained movements. Enthusiasm persuades, particularly when the enthusiasm is genuine.
  • Color consumers’ worlds. Signage which employs a range of hues grabs more attention than the black-and-white. It is also true that B&W commands attention when surrounded by colorful stimuli, but this effect is weaker.
  • Be bold. Product claims made in boldface print or in a slow, deep voice achieve perceptual prominence. To turn shoppers’ heads, surprise them with daring humor or unexpected claims. Do be sure to promptly follow up with a comforting resolution, though.
  • Cement with concrete. Concrete words like apple, engine, and hammer are easier for consumers to process than abstract words like aptitude, essence, and hatred. Because they are easier to process, these words will stand out. This is not to say you should completely avoid abstract words. Once you stop the shopper with the prominent stimuli, you’d like them to spend time contemplating what you’re saying. Abstract words help do that.
     The shopper psychology underpinning for all of this is Weber’s Law: In the 1830’s, Ernst Weber reported that weight lifters would notice an increase or decrease in the load only when the change was about 20% of the prior load. For 100 pounds, it took a 20 pound difference. But for 300 pounds, it took a 60 pound difference. Experimental psychologist Gustav Theodor Fechner extended Weber’s Law to cover all sorts of human perceptions, including whatever the shopper in your store encounters.
     The point for retailers: To achieve prominence, make the ads, gestures, signage, wording and the rest about 20% different from what surrounds it. If everything in your communication comes across to the consumer as really loud, the loud won’t stand out. In addition, odds are with you ending up annoying the person.

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Welcome Me to Your Store with Enthusiasm
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Turn Your Image on a Dime

Tuesday, October 11, 2011

Triangulate for Accurate Skill Estimates

With product categories like power tools, cameras, and sports equipment, customers will often select an item based on what they perceive their skill level to be. The judgment of one’s own skill is, in turn, often tied to the customer’s perception of how their expertise compares to that of others.
     It might be wise for a low-skill customer to buy equipment requiring high skills if the customer is in the process of building those skills. But a tradeoff with high grade equipment is that it might require considerable skill to use it properly. You don't want customers misusing what they purchase from you. If they wreck the equipment and then come to return it to you, you'll either accept the return and take a loss on the equipment or worse, one of your staff will refuse to take the return, thereby losing that shopper as a customer.
     To keep up your profitability, sell skill-based equipment based on the customer's true skill level. Unfortunately, customers often misjudge their own true skill level and their skill level relative to others. For example, consumers on average overestimate their relative abilities when buying an automobile and underestimate their relative abilities when purchasing computer systems.
     Researchers at University of Texas-Austin and University of Michigan concluded that a major cause of the distortion is consumers’ assumption that people are fairly evenly spaced along the skill dimension. In truth, for most realms of product expertise, there is not an even distribution. More people have moderate expertise than either high or low expertise.
     The researchers asked study participants to complete a quiz about tools and hardware. The quiz given to some of the people was designed to be easy, while the rest of the people were given a hard quiz. Participants were not told there were two versions of the quiz.
     Afterwards, the participants were fairly accurate in estimating how many questions they’d answered correctly. But because of the “evenly spread” error, those who took the easy quiz overestimated their expertise relative to others who took the quiz, while those given the hard quiz underestimated their relative expertise.
     When it is important for your customer to purchase an item at the proper skill level, triangulate: Describe what sort of product in your assortment is used by those with high skills, what sort is used by beginners, and which is used by the majority who have midrange skills.

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Match the Product to the Customer's Skill Level
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Monday, October 10, 2011

Plant Decision Trees

An article in The Economist bounces off the first line in Leo Tolstoy’s Anna Karenina, “Happy families are all alike; every unhappy family is unhappy in its own way.” In the article, the quote becomes, “…thin people are all (roughly) alike, fat people are all fat after their own fashion.” The context for the quote is plus-sized women searching after their own fashions.
     About 65% of American women would be classified as overweight by U.S. Centers for Disease Control and Prevention standards, yet women’s plus-size clothing has traditionally constituted less than 20% of the women’s apparel market. One reason for this disparity is that women have trouble finding clothing which fits them well.
     A related reason is that women want to spend as little time as possible trying on clothes in the presence of thinner shoppers. You’d think, then, that the market share for plus-sized fashions would be higher among online purchases, which can be done at home. However, reports The Economist article, the share is only about 11%.
     Charming Shoppes, a retailer with a major stake in the plus-sized market, has aimed to increase the share for full figure fashions through use of a decision tree tool they call Fashion Genius. To start, each woman is asked whether her figure might best be described as hourglass, rectangular, circular, or some other shape. Then she’s asked about the specifics of problems with fit: Loose at the waist? Rides up at the back? And so on. At the conclusion, Fashion Genius crunches the data and generates recommendations.
     Design of this decision tree tool was based on results from more than one million previous survey responses and more than 10,000 custom fittings. Fashion Genius automates what the best salesperson in the store does with a customer.
     In your store, how thoroughly are you gathering question sequences like these for whatever products and services you sell and turning the sequences into scripts to be used by your less able salespeople?
     Decision trees are particularly useful when a couple is shopping together. Married couples aim to balance out their shopping tendencies. Researchers at University of Pennsylvania and Northwestern University provide intriguing evidence that tightwads—who recognize they should be more willing to spend money—tend to marry spendthrifts—who recognize they should be more cautious in spending money.
     A decision tree sequence of questions helps the couple navigate through their complementary approaches.

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

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Gain Weighty Profits with Larger Sizes
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Sunday, October 9, 2011

Let Go of Grudges

Last week, I taught at University of Nevada-Reno about managing the performance of employees. As almost always happens in classes I conduct, a participant shared with the group and me an experience containing a useful lesson. I’ll pass the lesson on to you.
     The sharing came at a point where I was talking about ways to accurately assess employee performance. Research in organizational psychology shows that much of the bias when completing a performance appraisal form can be eliminated if, before completing the form, the supervisor reviews the following:
  • The job description for the employee’s position. This reminds the supervisor of the behaviors and outcomes to expect from the employee.
  • Behavioral examples of “below,” “meets,” and “above” expectations. What does it look like when an employee satisfies the standards for the job? When the employee exceeds those standards and when the person falls short? These brief sketches give you benchmarks to use in doing your assessment.
  • Your log notes on the ratee. The formal evaluation might be completed only once per year. Unless you’ve been making notes over the period of the year—and then reading through them before you do the annual review—there is a danger you’ll bias your conclusions toward whatever’s happened very recently.
  • Records of coaching or counseling sessions with the ratee.
  • The ratee’s self-assessment form. It’s best to have the employee complete a form rating their own performance and then give it to the rater in advance. This reduces the chances you’ll overlook something important that affects the evaluation.
  • Information on the ratee from others. What do coworkers, customers, vendors, and direct reports think of the employee’s performance? Take care not to overload yourself with information, but do tap a range of sources.
  • The last completed performance appraisal form on the ratee. If the employee made a commitment to action last time, you’ll want to follow up on where things stand now.
     As soon as I completed this list with my seminar participants, one of them said, “In my organization, we’re never to look back further than the last completed performance appraisal. Dig into the more distant past, and you’ll risk biasing yourself with grudges you or another supervisor can be holding.”
     That’s an excellent lesson. People change. Give each employee the opportunity to be viewed differently. This holds true not only when doing the formal appraisal, but also in our day-to-day supervisory style.

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Manage Staff Performance with Respect
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Saturday, October 8, 2011

Plumb for Consumers’ Desire to Slum

Consumers strive to purchase and display items they associate with social classes they look up to. If a teen idol claims to use a certain brand of mobile device, other teens are motivated to get it, too. If a highly successful business leader appears at conferences with a briefcase showing a specific brand name and style, sales of those briefcases can be expected to climb among new MBAs.
     Yet, there are circumstances under which consumers will strive to use items they associate with a lower socioeconomic status. Consumer psychologists call it “parody display.” Among Americans, tattoos were more popular in low socioeconomic classes before the prevalence moved uptown. Among Brazilians, dancing capoeira was done most often in the slums before upper classes took it on as a form of parody display. Blue jeans. Pickup trucks. Work boots. And on and on.
     What’s behind parody display, and how can you use these motivations to build your profitability? Here are two major ones that were identified long ago:
  • A desire to be distinctive. Everyone else is wearing the aspirational wardrobe. Create a striking image by incorporating artifacts others don’t expect, these shoppers say. The retailer leverages this motivation via contrast in marketing and merchandising. Show the lower-class item surrounded by the usual aspirational things.
  • A wish to relax. Your customers could be sick from “affluenza,” worn down by the pursuit of high status. Parody display items project an attitude of, “I’m here to kick back and enjoy life.” The retailer addresses this one by creating a shopping context of fun.
     More recently, researchers at New York University and Israel Institute of Technology saw another motivation for shoppers slumming in their product choices: Shame.
     In one of their studies, college students were more interested in learning about a T-shirt tattooed with a sophisticated design when the T-shirt was worn by a grocery store packer than when by another college student. In another study, students developed a higher likelihood of buying a wireless charger when they saw it used by a security guard than by a college student.
     The irony here is that the attraction to the product depends on aspirational drives. Who was using the wireless charger made a difference only if the college student study participant considered technological innovativeness to be important.
     Discover which, if any, of these motivations will turn the shopper’s eyes down when looking at the socioeconomic hierarchy.

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Update Keeping Up with the Joneses
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Friday, October 7, 2011

Secret the Customer’s Confidences

Skilled customer service includes protecting the secrets of your customers, clients, guests, and patients. Retailer discretion heads off the possibility of your consumers secreting the bile of anger toward you and your store.
     Research findings from Scotland’s University of Edinburgh demonstrate how easy it is to overlook what sorts of confidences a customer would like you to respect. The researchers explored this matter in the context of two circumstances arising in air travel: First, when passengers accustomed to flying in business class were required to travel in economy class. Second, when the special privileges associated with premium frequent flyer status were not available to the customer.
     On average, the passengers encountering one or both of these situations preferred it be concealed from the other passengers. The objective, the researchers concluded, was to protect the consumer’s self-identity as having special status.
     At the other end of the dimension, customers might want not to let others know they’ve received a special privilege. An example concerns exclusive price discounts. When you tell a customer they’re receiving a price discount, they’ll build good will toward your store. If you add that the discount isn’t available to every other customer, the good will might be even greater. Or your announcement might make the customer uncomfortable. Shopper psychology research finds that exclusive price discounts operate in strange ways:
     Be consistent and be ready to explain the reason for the discount. Otherwise, the customer might get angry, thinking that your store pricing is highly arbitrary or even discriminatory. Researchers at University of St. Thomas and University of California-Berkeley analyzed a pricing policy used by Amazon in year 2000, in which some shoppers were offered a discount of 30% on a set of DVDs, while others were offered a discount of 40%. When customers discovered in online chat rooms what was going on, they had challenging questions for Amazon. Better for those who received an exclusive discount to keep it secret, those receiving it might say.
     Because many Asian cultures stress duty to the group over individual glory, avoid publicizing the identities of any big winners. Otherwise, those big winners and all those who see the publicity may come to fear that the loyalty program tempts fate in ways that could bring bad fortune. Particularly if others in the group would consider the reward unearned, East Asian recipients in some studies felt it produced a menacing imbalance.

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

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Thursday, October 6, 2011

Position Your Team a Little Bit Behind

Advisors from University of Pennsylvania recommend that you keep your retailing team behind the competition—a little bit behind. The payoff is that your team will exert a greater effort.
     It was a half century ago that Avis Rent A Car System unveiled a series of ads which the trade journal Advertising Age later called one of the top ten campaigns of the 20th century. The theme of the ads: “We’re number 2 in rent a cars behind Hertz, so we try harder.”
     The Pennsylvania researchers applied their theory to an analysis of data from 60,000 basketball games, including 18,000 National Basketball Association games. They found that teams which were behind by one point at halftime were more likely to end up winning the game than were teams ahead by one point at halftime. It was not a large effect—about an 8% advantage in odds—but it was a consistent finding. Also note that this held only when the team was a little bit behind. Overall, for every two points a team was ahead at halftime, the chances of winning the game increased by about 7%.
     Being slightly in back of the leader boosts motivation, and thereby sharpens performance. Here’s how to get the most out of the effect:
  • Choose your competition carefully and periodically revise your selection as the performance of your retailing team changes. Be sure you’re playing in the right league.
  • Within your team, help each member to select a comparison point they can aspire to achieve. Out of grasp and within reach.
  • Take breaks from the pursuit in order to analyze where you stand. Then strategize and train for the next period of competition. The halftime break in basketball games serves the function of analyzing and strategizing. The teams that were a little bit behind made up for most of the point spread during the first seven minutes after returning to play. In real-life retailing, you can use the break for training, as well.
  • Boast to consumers about your underdog determination. Researchers at Harvard University, Simmons College, and Boston College find that the underdog’s appeal to consumers endures. Come-from-behind fits well with the American stories of successful immigrants and of second chances met with passionate determination. Every consumer has felt they’re behind the leader in something at one time, so every consumer cheers for others in that position.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Wednesday, October 5, 2011

Try Out Dollar Over Percentage Discounts

A recently released white paper from social network marketing consultants Buddy Media says that Facebook users are significantly more likely to respond to “dollar off” promotions than to “percent off” promotions. Among the Buddy Media respondents, discounts of under $10 received about 17% higher engagement than “percent off” coupons.
     (The study can be downloaded from the Buddy Media site. Free registration is required.)
     This finding runs counter to the time-tested advice that retailers should advertise “percentage discounts” rather than “dollar off” discounts. A Marketing Daily posting last week reports that among the most popular internet searches are percent-off deals.
     One explanation for the Buddy Media finding? That traditional advice also says shoppers will respond to a discount of 15% to 20%. However, the Marketing Daily article was titled “The New Consumer: 30% Off Is The New 20%.” More internet searches are being done for 30% than for 20% now. In their online promotions, Land’s End—which was featuring discounts as small as 5% in 2009—is currently selectively offering 30% discounts.
     What difference does this make for you? As the shopper comes to expect higher and higher percentage discounts, try out switching the language to dollars saved. Many consumers are looking to trim every last penny off their purchases.
     I say, “try switching,” because the Buddy Media conclusions are not time-tested and they might apply mostly to Facebook users. Other findings were that keywords like “sale” received especially low engagement, while the word “coupon” came in at almost 40% above the average level of engagement. The keyword phrase “% off” was also among the lowest.
     A more general finding in consumer psychology is that percentages are easier than raw frequencies for a person to understand and remember. Therefore, if ease of comprehension is important, present the percentage format. This would be especially true if your statement has lots of elements to understand and remember aside from the frequency itself.
     If you’re asking prospects to calculate a percentage of a percentage, staying with the percentage format will make the discount seem higher. For instance, if you’re offering a 25% discount off of a previously discounted 20%, the discount off the original price is 40%, but many consumers will judge the discount to be closer to 45%. Research at University of Miami and University of Minnesota suggests that most consumers come up with erroneous frequency conclusions when calculating percentages of percentages.

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Reassess Your Pricing Assumptions
Choose Between Percentages & Frequencies

Tuesday, October 4, 2011

Know Where to Go for Answers

The scene was a Los Angeles County Superior Court deposition room.
     Because the witness was a child, the attorney set out some basics. Holding up a pen, the attorney said, “If I were to tell you that this pen is red, would that be the truth or a lie?”
     Since the pen did indeed appear to be red, the child answered, “The truth.”
     “Very good,” said the attorney. “And if I were to say that dogs could talk, would that be the truth or a lie?”
     “The truth,” replied the child.
     “Really?,” said the attorney, having failed to heed the fundamental advice to know precisely what the witness is going to answer before you ask the question.
     “Dogs can talk?,” he continued, “What do they say?”
     In the midst of this examination of veracity and falsehood, the witness chose to avoid exaggerating, even a little. “I don’t know,” replied the child. “I don’t talk dog.”
     In that dialogue, the child had strengthened credibility as an expert.
     Your shoppers love being served by experts. In fact, they judge the salesperson’s expertise even before the two start talking. The salesperson’s dress and body language say a lot as the prospective customer asks, “How much does this salesperson look like somebody I’d like to be?” If the store is busy, does the salesperson appear to have things under control? If so, that’s the mark of an expert.
     Then as the salesperson asks questions and answers the customer’s questions, it gets clearer. So do your floor staff know where all the merchandise is located? Are they aware of the comparative features of brands in their department? Can they explain them to the customer if asked? Can they also explain other things well?
     Staff your store with experts who enjoy sharing their knowledge with customers in a team-oriented way. Customers want sales staff who know it all, but without acting like stuffy know-it-alls. Retired journeyman plumbers make terrible hardware store employees if they have trouble explaining the steps to replace a faucet. Teens with a wonderful sense of fashion style are bad clothing department advisors if they label some teen customers as beyond fashion rescue.
     Sure, each of your staff won’t know everything. Most shoppers don’t expect the salesperson to. They do expect the salesperson to get the answer when they don’t know and to do a personal handoff to another expert whenever necessary.

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

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Have Staff Who Show and Share Expertise

Monday, October 3, 2011

Unpack Product Learning

Researchers at University at Buffalo-SUNY and Indiana University say that people master novel products best when given the opportunity to experiment with the product repeatedly. The measures of mastery included attraction to the product, a willingness to pay a premium price for it, and an ability to use the product’s capabilities in a variety of situations.
     In summary: By allowing the shopper to try out the product, you’re more likely to make the sale and have a happy purchaser. This finding is not, in itself, particularly useful beyond the comfort found from a confirmation of what common sense tells us.
     What the Buffalo/Indiana research does add are conditions: Shoppers who learn by reading over instructions and then trying out the product step-by-step generally prefer to have repeated lessons spaced out in time. Those shoppers who learn by getting right in and playing the game generally like the lessons to be massed together at one time. To maintain interest in continuing to use the product, the trial-and-error learners need to work through all those errors which come about because they didn’t want to read over the instructions.
     For both types of consumers, and all those in-between, the learning can be daunting if the product is at all complex. As daunting as packing into a single suitcase everything you want to take with you on a trip.
     Researchers at Brigham Young University, Rice University, and Carnegie Mellon University found that shoppers tend to be overconfident of their abilities to learn skill-based products before they try them out, then overcompensate in the other direction after the first few trials. At that point, they tend to overestimate the time and trouble it will take them to learn, and they give up. Consumers in the study were willing to pay more for a keyboard before they’d tried it out than they were after their first quick lesson with it.
     In the research, it took about four rounds of twenty minutes of learning before the estimates of learning ability and time to learn became close to accurate.
     All of this argues for unpacking the learning experience into components, even in those circumstances where the teaching format will be massed—delivered to the consumer one lesson immediately after another. Research findings from University of Toronto indicate that when the retailer points out the joys from mastering the product, the unpacking produces healthy perseverance during the learning.

Click below for more:
Discover What Purchasers Never Use
Ventilate Frustration When Promoting Self-Control

Sunday, October 2, 2011

Speed Bumps Into Store Aisles

We want to arouse the shoppers’ interest from many directions in the store. Draw the consumers in and toward the prime merchandise and services. Attract them to areas of the store they haven’t yet explored.
     We want to arouse multiple sensory modalities. Interesting sights. Provocative fragrances. Intriguing sounds. Invitations to touch or maybe taste. The right blend energizes the shopper and helps make the store experience one the shopper wants to prolong and to repeat soon.
     Yet we also want the shopper to stop long enough to select an item from the shelf or rack. And then move to the next item and stop there. Here, too, we can use a variety of sensory experiences. What we seek is something different from the surrounding items. A distinctive color on a product, package, or sign will catch the consumer’s attention long enough for them to look at the surroundings.
     Placing merchandise on end caps can serve the same function. Much of what shoppers see is out of the sides of their eyes as they stroll down the store aisles. This provides nice opportunities for implanting subconscious suggestions. However, we also want each shopper to look straight on at prospective purchases, as happens when walking toward the end cap, those shelves set up at the entry to the aisle.
     Then there are what Dollar General refers to as “virtual speed bumps.” These are items which do not completely block the shopper’s path, but do oblige the shopper to navigate, and therefore to hesitate. A tower of cardboard boxes sitting in the middle of the floor requiring you to negotiate with the cart rushing toward you. A flashing sign protruding out from a shelf. A gaggle of gewgaws hanging from the ceiling.
     Consumers need sufficient complexity to stay engaged. A classic and repeated finding in consumer psychology is that we want to introduce enough incongruity, enough surprise, so that the shopper slows down for a moment to appreciate the sales message. If the layout is overly sterile, the viewer processes it all immediately and then moves on—beyond the range of a possible add-on or upgrade that would benefit both the shopper and the retailer.
     You know, perhaps one of those items hanging from the ceiling will drop into the shopper’s basket as she navigates through and perhaps, just perhaps, she’ll proclaim, “Wow, this must be fate! I think I’ll buy it!”

Click below for more:
Use Fragrances to Pace Shoppers
Use Sound Effects to Sell
Clear Up Clutter Ambiguities