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.

Click below for more:
Match the Product to the Customer's Skill Level
Respect Customers Who Claim Expertise

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