Monday, January 31, 2011

Put Customers to Sleep After Irritating Them

Sometimes we seriously irritate a shopper, though we didn’t mean to. Maybe our enthusiastic demeanor carried all the appeal of an obnoxious circus clown. Or the irritation could be the result of sloppy signage and insufficient staffing on the sales floor. However it happens, irritated customers often deny you profitability.
     If you handle things correctly, you can save the sale. When the shopper says straight out that they’re irritated, apologize and ask how to make things right. Or if they don’t say it, but you sense the foul feelings, put the irritation to sleep.
     In the 1970’s, psychologists gave the name “sleeper effect” to a phenomenon they noted, not in selling products, but in selling political candidates: When the arguments for a candidate were convincing and the person making the arguments was irritating, the consumer would at first not be at all convinced, but after a period of time forgot about the source and was persuaded by the message.
     Subsequent studies by consumer psychologists found that the sleeper effect works in a range of selling situations. Research centered at University of Illinois-Chicago Circle described the conditions essential to produce the sleeper effect. Here is my translation of the findings into the steps you—the retailer—can take to activate the sleeper effect when you think you’ve irritated a customer and an apology doesn’t fit the situation:
  • Briefly state the one reason for purchase that you believe will be most compelling to the shopper.
  • Ask the shopper if they have any questions you might answer.
  • If they are not interested in making the purchase, say something like, “I know a purchase like this can be an important decision. Please think about it and then visit us again.”
  • If you’ve the contact information for the customer, wait one month and then send them an e-mail or postal mail invitation to come in to shop with you. Have the invitation signed with the store name, not your name. This is an exception to the rule that it’s better to use “I” than “we.”
     Are you chasing the customer off? Yes. 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 anything from you in the future.

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

Click below for more:
Avoid Locking In Bad Moods
Shoo Away Negative Customer Feelings

Sunday, January 30, 2011

Spread Risks to Family for Values-Laden Buys

When deciding whether to make a purchase, each shopper consciously or subconsciously weighs the risks. Of the various types of risk, two are called “social” and “psychological” by consumer psychologists.
  • Social risk: “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?”
  • Psychological risk: “Does using this product or service conflict with the image I want to maintain of myself?”
     A retailer can address the social risk by encouraging shoppers to bring along their friends or by making it easy for shoppers to contact their friends via mobile devices. As to psychological risk, recent research indicates that having shoppers bring along the household is a help.
     A marketing researcher and a psychologist at Umeå University in Sweden explored what influences a value-laden innovative purchase decision—buying a vehicle that uses electricity and biofuels instead of fossil fuel gasoline. Not surprisingly, the study found that one major determinant was the nature of the consumer’s values regarding protection of the environment. Those wanting to maintain a image of themselves as guardians of the environment were more likely to buy.
     It turned out that another important determinant was the size of the consumer’s household. Those living in multi-person households were more likely to buy the innovative vehicle. Supporting this finding, researchers at University of Texas-Arlington discovered that when accompanied by a family group, a shopper relaxes concerns about making risky decisions.
     The divisions between family group and household are fading. Preparing for last year’s count, the U.S. Census Bureau acknowledged that married couples make up a minority of households. A majority of women live without a spouse, and about 5% of households consist of unmarried opposite-sex partners. The Census Bureau uses household as a basic unit of measurement regardless of the occupants’ relationship.
     Even though the definition of household is broadening, the views of a consumer’s parents—or parent substitutes—are particularly influential. For instance, researchers at University of Western Ontario and University of South Carolina find that when the family group includes young adults and their parents, the parents’ attitude toward innovation and personal values carries more weight than the siblings’ views. The researchers advise that if you want to get the next generation to try new products or services that impact personal values, convince the shopper’s parents before asking the prospective purchaser what they think.

Click below for more:
Reduce Unwanted Risks for Your Shoppers
Sell to Values, Not Just Value
Identify Influencers in Family Decision Making
Sell Identity Affirmation to People
Attend to Genetic Influences in Selling
Show Impulse Purchase Items for Groups

Saturday, January 29, 2011

Accentuate the Positive Customer Feedback

If you resolve a customer’s complaint well, the customer is likely to become even more loyal than they would have been if they’d never had a complaint. They develop gratitude for the high quality resolution and often a bit of guilt for making a fuss. Researchers at Università Commerciale Luigi Bocconi in Milan, Italy found that as this guilt about complaints develops, the customer’s amount of future complaining and negative word of mouth dip.
     But research at University of Virginia indicates that if a customer suffers the same type of problem again at your store, repurchase probabilities drop sharply. The customer might not even bother returning to complain, instead just shifting their business elsewhere. This means you might not be aware why you’ve lost the business. What makes it even worse is that this customer will start telling others about their bad experiences.
     Your prospective customers—the ones who haven’t ever shopped with you, yet might be interested—tend to place more emphasis on criticism of your business than on praise. To the prospective customer, negative information is diagnostic. People hear praise so often from advertising and from customers who are wanting to convince themselves that whichever store they went to had to be the best. It’s the negatives which help narrow the choices.
     You don’t want your store cut out of consideration. Therefore, place extra emphasis on gathering and reporting the positives. One company currently following that advice is Avis Rent A Car. Nearly fifty years ago, Avis Rent A Car System unveiled a series of ads 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.”
     Now in a new campaign, Avis will be bragging via broadcast ads, cable TV ads, print, social networking media, and the company website about all the praise customers have for the try-harder underdog.
     You could be another retailer who accentuates positive customer feedback. Whenever you think you’ve resolved a complaint, ask the customer, “Are you fully satisfied?” If they reply that they are, ask for a testimonial you can cite. If they say they are not fully satisfied, see what you can do to change it to yes. Then once you get to yes, ask for that testimonial. Next, publicize the praise.

Click below for more:
Go for Customer Gratitude and Guilt
Boast About Underdog Determination
Get Second Chance for Good Impression
Use Dissatisfaction as a Selling Opportunity

Friday, January 28, 2011

Earn Permission to Misbehave

Walgreens—America’s largest retail drugstore by location count—recently made two significant announcements about merchandise they’ll be adding:
  • They’re rolling out plans to carry fresh fruits and vegetables, frozen meat and fish, pasta, rice, beans, eggs, and whole-grain cereals. Walgreens is especially interested in making the additions in what they call “food deserts,” such as inner-city locations with few stores currently carrying fresh foods.
  • After last year’s company turnaround from a self-imposed ban of almost fifteen years on alcohol beverage sales in most stores, Walgreens says they’re adding a house brand beer selling for about 50¢ per can. Many Walgreens stores already sell the private label Southern Point wine at about $4 a bottle.
     Both moves can rightfully be considered as good merchandising decisions. Lots of general merchandise retailers are adding grocery sections, and Walgreens pointed out last year that CVS Caremark and Rite Aid—vigorous competitors—already have been selling alcoholic beverages in many of their stores.
     But as you’d expect, a number of stakeholders view the sale of low-priced alcohol as retailer misbehavior. When approving the Walgreens request for permits, the Omaha city council placed restrictions on single can sales. In an interview with the Wall Street Journal, Walgreens acknowledged that many local communities are concerned that the alcohol sales will boost crime rates. Walgreens announced they would not be selling fortified wines, hard liquor, or extra-large beer cans. They also say sales won’t be made by employees who are themselves underage and all employees will be instructed to sign off on their store’s alcohol sales policy at the start of each work shift.
     From a consumer psychology perspective—where in this case, those consumers are community stakeholders—one way to view the Walgreens announcements is as the retailer earning permission to sell cheap booze in low-income neighborhoods by showing that they’re going to help kids in low-income neighborhoods to be more healthy.
     And not only with the food. At about the same time, Walgreens also announced that they are lobbying state public health departments to approve their pharmacists administering a broad range of inoculations. Walgreens’ rationale is that there is a shortage of primary care physicians in many areas where a Walgreens store is located.
     Let all this serve as a reminder of the value in continually earning good will in your community to offset whatever local accusations arise that your business is misbehaving.

Click below for more:
Consider Publicizing Your Rascal Image
Attract with Social Consciousness
Unchain for Health

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

Wednesday, January 26, 2011

Open Up Profits Using Stores-Within-A-Store

Fortune magazine reports that major retailers are currently inviting other retailers to set up shop inside their stores. For example, Sears is devoting real estate to fashion trendsetter Forever 21, uniform apparel merchant Work ‘N’ Gear, and Edwin Watts Golf Shops.
     A store-within-a-store (SWAS) is far from being anything novel in worldwide retailing. Many retailers in Chinese cities have long been collections of small shops run by individual merchants. What is different now is how the concept has spread, including from brick-and-mortar retailing to ecommerce. The Fortune article says that nearly 80% of the products purchased through Amazon are sold by other retailers in a marketplace arrangement. The Apple Computer site merchandises ebooks from a range of publishers who decide what to offer and how much to charge.
     Here are two tips to consider as you surf this trend:
  • Select SWAS tenants who are compatible with the store image you want to cultivate. That might be different from the image you have now. Then the SWAS helps you craft a new image. A University of Pennsylvania expert says that in choosing their inside partners, Sears is wanting to move from an old-time reputation to a young-consumer attraction. Researchers at University of Pittsburgh and University of Minnesota suggest you look for an alliance with a retail brand that provides products or services similar to what you do, but one with a brand image that includes strengths in areas where your brand image doesn’t. You’d expect, of course, that your tenant will want your brand image to have strengths where theirs is less strong.
  • Use a SWAS to generate excitement and entertainment for your shoppers. With this in mind, consider arrangements like a weekly shopper’s fair or farmer’s market by your store. Another tenant inside some Sears stores will be organic grocer Whole Foods. In addition, you might continually introduce new and improved items by having pop-up stores run by different retailers. These are stores that remain in business for a very limited time. Retailing giants Target and Walmart have successfully used pop-up stores carrying their own brand. In one case, the Target pop-up was open for only four days. Because your objective is to generate excitement about your brick-and-mortar store and/or ecommerce site, announce the pop-up widely to the media. Do it well and after the pop-up has closed, people will still be asking, “What the devil happened?”
Click below for more:
Prolong Your Reputation as Cutting Edge
Keep a Store-Within-a-Store Compatible
Shrink Brand Alliances When They Contaminate

Tuesday, January 25, 2011

Introduce Unfamiliar Products Like Old Friends

Meeting new people—as well as new products and new brands—can be absolutely stimulating. Consumers seek novelty and variety. But classic research at University of Delaware found that the need for that sort of stimulation does differ widely among individuals. Most consumers also find a special comfort in being with old friends—and with the brands and products they’ve known well for a long time.
     This creates a challenge for retailers who would like to switch customers from a familiar to an unfamiliar brand or product. Recently published research out of Southern Methodist University suggests there’s a good way to do it: Enthusiastically introduce the unfamiliar brand or product like it’s an old friend of the shopper.
     After reading those research findings last week, I experienced a compelling example of the psychology behind the technique:
     I was walking through the lobby of 300 Montgomery Street in San Francisco. My mind was on getting to my meeting with the director and assistant director of the San Francisco Small Business Development Center to discuss upcoming training and consulting for San Francisco retailers.
     Suddenly a man walked up to me flashing a huge smile. “24 Fitness, Santa Rosa,” he said, pointing his finger.
     I’d never been to that gym. I shook my head.
     “Nautilus, Fremont.”
     I didn’t recognize the guy. “I think you have me confused with somebody else.”
     “No, no,” he insisted. “I’m sure I know you.”
     His enthusiastic desire to make a connection drew me in. Maybe I did know this guy after all.
     It was a passing thought, since I had to get up to my meeting. I turned around, and we both walked off.
     Consumer psychologists talk about “the mere exposure effect.” Shoppers tend to have more favorable attitudes toward something they’ve seen before. The Southern Methodist University researchers lied to study participants in telling them the participants had seen brands previously. The people who were convinced they had seen the brands before showed the same sorts of favorable attitudes as if they actually had.
     I don’t advocate lying to your customers. So instead, when introducing a new product or brand, in ads, signage, and face-to-face selling, work in phrases like, “…the same way as with the brand you’re accustomed to using…,” and “…once you do this a few times, it will be as second nature to you as what you’ve been doing up to now….”

Click below for more:
Expect Shopper Conformity and Variety Seeking
Display Unfamiliar Brands with Prototype Brands
Use Familiar Routines to Sell the Unfamiliar
Compare Unknown Brands to Best-Known Brand

Monday, January 24, 2011

Watch Out for Discrimination

Are your employees showing respect for all ethnicities and races when dealing with customers—and with each other? Researchers at Clemson University and University of North Carolina-Wilmington found that discrimination against racial and ethnic minorities continues to plague retail settings.
     Some frontline retail staff who carry biases against minorities operate on the assumption that it’s only the minorities who are disturbed by discriminatory behavior. Since the prejudiced staff member decides consciously or subconsciously that they’d prefer not to do business with minorities anyway, they resist changing their behavior.
     Purge discriminatory behavior. It’s unacceptable on ethical and legal grounds. It also has more widespread effects on customer goodwill than those prejudiced frontline staff acknowledge. The Clemson/North Carolina researchers found that many white shoppers become as outraged as blacks when the white shoppers observe a black customer being treated in a discriminatory way. All the customers are watching.
     Discriminatory behavior can be a problem in staff-to-staff interactions as well as in staff-to-customer interactions. According to findings by researchers at University of Southern California, about 40% of retail consumers report that at least once each month, they see a store employee treat another store employee so rudely that the customer gets less interested in shopping at that store.
     Social psychologists say there’s a particular risk of racial and ethnic discrimination when retail gentrification confronts retail redlining. Retail gentrification refers to affluent and middle class people starting to do their retail shopping in stores previously associated with lower class shoppers—shoppers who are disproportionately racial and ethnic minorities. Retail redlining occurs when certain racial and ethnic minorities systematically receive lower quality goods and/or are charged higher prices for equivalent merchandise than is true for other groups.
     An article in yesterday’s Los Angeles Times features one example of retail gentrification—Westfield Culver City mall. In a shopping center known previously as a collection of down-market stores, the mall now includes trendy retailers like XXI Forever and Hollister. But the economically disadvantaged haven’t been forgotten. 99 Cents Only and Dollar Tree stores are moving in. The split personality of the mall is evidenced by the names of the four anchor stores: Macy's, JCPenney, Target and Best Buy.
     The LA Times article says that what’s happening with the Westfield Culver City mall is an overall trend in retailing. Because a side effect of that trend might be inequitable treatment of customers, watch out for discrimination.

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Show Respect in Front of Customers
Reexamine Retail Redlining Temptations

Sunday, January 23, 2011

Free Up Shopper Resistances to Trial

An article in last week’s Bloomberg Businessweek analyzed the offer by H&R Block to prepare people’s tax returns for free. Building on the analysis in that article, here are some shopper psychology tips on using free offers to your most profitable advantage:
  • Free offers are a fine way to have resistant purchasers try your core services. H&R Block views the promotion as a way to draw in footsteps. But be sure to set strict enough conditions on your free offer. The H&R Block offer covers only the filing of the federal 1040EZ, not more complex forms. It doesn’t apply to state tax forms. The offer is good only from January 14 through February 15. The company estimates that many of the people coming in for the free offer will learn that they need to file forms for which there is a fee. For those who don’t, says H&R Block, about 55% will be in that situation within two years, so familiarity with the office is a valuable advantage.
  • When you’re giving no-cost samples, ensure that any conditions are abundantly clear and that there is minimal sales pressure to go from free to fee. Ecommerce shoppers have become so accustomed to getting things of value for free that they feel betrayed when they expect it to happen and then are told they’ll have to pay. The sorts of customers H&R Block hopes to draw in are those who are short on money and are therefore turning to computer-based tax preparation. Those people are especially likely to have ecommerce mentalities.
  • Be sure to state the usual price of whatever it is you’re giving away. Better yet, if what you’re thinking of giving away is part of your core business, considering charging a token fee instead. Researchers at Monash University in Australia find that consumers have an easier time recognizing the value of a big discount when charged a token price than when getting it for free.
  • Make your offer with flair. H&R Block has had enough punches to muster up the emotion. Bloomberg Businessweek reports that their retail tax preparation business dropped more than 6% in 2010 and that the company’s main promotional hook from the recent past—the Instant Money Refund—is under attack by U.S. regulators as usurious. Before embarking on a free offer, tap into emotions that motivate you to do it dramatically.
Click below for more:
Give Shoppers a Comparison Point
Serve the Underserved
Keep Discount Conditions Strict Enough
Give Free Samples of New Products

Saturday, January 22, 2011

Stay Close to the Customer

A kiosk sponsored by Kraft Foods, incorporating Anonymous Video Analytics technology, and based on Intel chips. That item was arguably the goofiest item at this month’s 100th Annual National Retail Federation show in NYC. At least goofy at first glance. And it’s the first glance that counts in this case, since what the kiosk does is look at your face and based on what it sees, makes menu suggestions.
     Well, arguably I’d say the kiosk wasn’t all that goofy, since it did lots more, too. Punch in information about your meal times, swipe your grocery store card, and the kiosk goes beyond judging your gender and age to incorporate your purchase history before generating meal ideas. Want a sample of an item it suggests you buy? Ask with a poke of the finger on the screen. The facial recognition was really no more than a gimmick to catch lots of media attention.
     Still, if we take this Kraft kiosk concept seriously for a moment, it can serve as a reminder of the folly in depending excessively on technology to give advice to our customers or to give us advice about what our customers need and want. Stay close to your customer.
     Here are two more examples of technology that can get in the way of accuracy if you fail to exercise caution:
  • Brain scan technologies like Functional Magnetic Resonance Imaging (fMRI) and Steady-State Typography (SST) help us understand why people buy what we’re selling. But the brain scan technologies are imperfect. For instance, according to The New Yorker, a postdoctoral fellow in neurological sciences at University of California-Santa Barbara performed fMRI measurements as part of a brain study to show limitations of the methodology. The readings gave evidence of activity in a region of the brain associated with empathy. Almost surely a false reading, though. See, the brain was of a salmon. A dead salmon.
  • Sophisticated statistical procedures like Structural Equation Modeling can allow you to understand truths such as what motivates people to recommend your store to others. But because of the complexity of the techniques, you’ll be trusting the analyses to an outside consultant using a computer. When working with a consultant who is using SEM or if you or your consultant are turning SEM findings into real-world action steps, remember that you know your retailing operations better than your consultant or a researcher does.
Click below for more:
Interpret Brain Science Advice Cautiously
Call on Structural Equation Modeling
Look at Mean, Median, Mode, and Range

Friday, January 21, 2011

Mythologize Your Store

Every new employee at every Nike store is told the magical tale about the track coach in Oregon who poured rubber into his family’s waffle iron to produce better shoes for his team’s runners—the innovation that inspired the Nike waffle sole.
     Every employee at every store is told the story? Well, even if the magical tale itself is told truthfully, the report that every employee hears it might qualify as no more than mythical. Never mind. When people accept a myth as possibly true, they are open to being informed and motivated.
     A myth is a special kind of story. Researchers at Boston College and University of Technology-Sydney say that the themes of a myth appeal to psychological needs across cultures. For instance, the Cinderella story is a myth with Chinese, Irish, Middle Eastern, and over three hundred other versions worldwide.
     The best retail store myths help explain the origin of the business and give the store a memorable personality. The Boston/Sydney researchers suggest that you use what are called Jungian archetypes to populate the myths you create.
     Fans of psychiatrist Carl Jung maintain that when people shop, they see the salesperson as playing a dramatic role. People shop to solve problems, and clinical research convinced Jungians we expect specific sorts of problem solvers in our lives.
     Here are the five big ones, using my adaptation of the language of Jungians:
  • The Superhero takes responsibility for rescuing us. The customer expects the Superhero to go above and beyond what most salespeople are able or willing to do.
  • The Coach reassures us. The customer expects the Coach to be available until the problem is solved and to encourage the customer to buy whatever is needed to solve it.
  • The Guru brings experience and a sharp mind. The customer expects the Guru to pretty much know the customer's needs without asking lots of questions.
  • The Playmate loves fun. The customer expects the Playmate to be more interested in how the shopping experience feels than in how the product or service works.
  • The Rascal exploits other people. Customers with strong morals don't like being around the Rascal. But there are plenty of shoppers who count on the Rascal to help them solve problems by taking advantage of others.
     Create these special sorts of stories for your business. Not doing so is to myth a rags-to-riches opportunity.

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

Click below for more:
Tell Positive Stories About Your Products
Tell Stories for Price Increase Acceptance
Analyze the Role the Customer Expects

Thursday, January 20, 2011

Localize Your Merchandise

A few years back, the word on the street in St. Louis was that if your retail business sold beer, the more Anheuser-Busch labels you carried, the better. Selling Bud, Busch, Michelob, and Natural Light was better than selling only Bud, since it showed local loyalty to a major St. Louis employer and donor. Anheuser-Busch, America’s largest brewing company, had been headquartered in St. Louis for more than a century and a half.
     Then toward the end of 2008, InBev bought Anheuser-Busch to form the world’s largest brewing company, with operations in over 30 countries and sales in over 130 countries. Now the word on the street was that the populace of St. Louis, Missouri found it tougher to view Bud as a local brand made good. Adding to the alienation was how the company fired about 1,000 employees from the St. Louis area a few months after the takeover, during the Christmas holiday season.
     As a recent Bloomberg Businessweek article points out, beer retailers wanting to portray local connections reacted by adding more Schlafly Beer, brewed only in St. Louis. Now about 2,000 taps serve Schlafly, a climb of more than 30% in the past two years. Now the number of concession stands selling Schlafly at Busch Stadium is eight. Last season, there was one stand.
     Small to midsize retail businesses carve out a marketing advantage when they carry local brands. A while back, Stop & Shop and Giant Food announced that Starbucks kiosks in a number of the stores would be replaced with Dunkin’ Donuts, whose home is Canton, Massachusetts. That’s much closer to the Stop & Shop/Giant stores than Starbucks, which although often seeming to have a presence on every street corner in the world, is most strongly associated with the aroma of Seattle.
     Keeping it local is an objective of large retailers, too. Wal-Mart gives a bow towards the neighborhood with their Local Supplier initiative. And last time I checked, McDonald’s in Bangor, Maine offered lobster sandwiches, but in my California hometown, that slot on the menu board is taken by burritos. If your shop—McDonald’s or not—offers hamburgers in Pittsburgh, you'll sell more potato chips when you stock local favorite Utz than when you stock only Frito-Lay, even though Frito-Lay makes the best selling potato chips in the U.S.
     Carry world-renowned brands, but also carry plenty of brands that themselves carry local pride.

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Give Your Retailing Local Quality
Brag About Your Retailing Humility
Feature Underappreciated National Origin Products

Wednesday, January 19, 2011

Impress Customers with Your Staff’s Expertise

When customers know you’re out-of-stock before your sales staff do, the customer might think the sales staff are dumb bunnies. So it’s of concern that in a survey of 545 retail store associates conducted by Research Now, about 55% said that mobile devices and online shopping tools are allowing customers to be better informed than the sales staff are about a store’s inventory levels.
     The survey was sponsored by Motorola Solutions, which is not a disinterested observer, considering that Motorola sells inventory monitoring tools for use by store staff. Still, the results are quite believable. A while back, a survey by the IHL Group, based in Franklin, Tennessee found customers often say the store is OOS even when the retailer thinks the store is in-stock.
     Provide your staff with up-to-date inventory information to buttress their reputations. Consumers like to deal with experts. However, because of how often the consumer has more accurate inventory information than does the staff, also train your staff to respect the knowledge of the shopper. Customers don't expect the salesperson to know everything. They do expect the salesperson to get the answer when they don't know and to do a personal handoff to another salesperson as necessary.
     A touch of humility actually makes it more likely the retail salesperson will be accepted as an expert. For example, Stanford University researchers found that expert restaurant reviewers are more influential when the reviewers say they're less than completely certain about their conclusions.
     More generally, avoid coming across to the customer as absolutely certain in the recommendations you're making because a bit of uncertainty makes the customer more comfortable in asking questions. Those questions are highly valuable when you’re facilitating the sale. You can present counterarguments or you can steer the customer towards an alternative which will better fit their needs.
     An image of expertise also can be built with an image of the employee: When we see a portrait-style photo of someone that's posted in a public location, and then we meet the person face-to-face, we subconsciously grant that person additional respect. You could benefit from this by including in advertising photos of your employees or posting an 8 x 10 in the department where the employee spends most of their time.
     Then if a staff member happens to be ignorant about current inventory levels, they still might salvage the impression that they’re worth listening to.

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

Click below for more:
Monitor the Sales Floor to Avoid Out-of-Stocks
Have Staff Who Show and Share Expertise
Respect Customers Who Claim Expertise
Sell More by Being Less Certain
Praise Your Customers

Tuesday, January 18, 2011

Hire Overqualified Candidates

Because of the troubled economy, people with meaty résumés are applying for even entry level jobs in retailing. Are you seriously considering them as new hires? Many retailers don’t since they fear that an overqualified employee will soon leave for other employment.
     Please refrain from instantly labeling these job candidates as unsuitable because they’re overqualified. Sure, you might decide they’re not suitable for your store because they have the wrong qualifications. But research findings from University of Connecticut, University of South Carolina, and St. Ambrose University indicate that with supportive supervision, highly qualified candidates can be highly motivated profit-makers.
     An essential component in that proper supervision is to set the problem-solving requirements of the job at the right level. Maybe you’ll be surprised to hear that there is greater risk of premature employee turnover when the problem-solving demands of the job are set quite high than when they are set quite low. The researchers found that when a job has low cognitive demands, the smarter employees are actually less likely to leave than are those who have limited intellectual abilities.
     Why would very smart people be especially likely to stay in their jobs when the problem-solving challenges are limited? Some might say it is precisely because they’re smart. They recognize it is hard to get another job these days. But the researchers point out that this isn’t a sufficient explanation. That’s because they also found that when the cognitive demands of the job are very challenging, those of average intellect are more likely to stay in their jobs than are those with high or low smarts.
     What seems to be going on here is that, when provided supportive supervision, overqualified employees are smart enough to find ways to use their abilities. And in doing this, they make you more money.
     Sometimes the applicant’s résumé is so meaty because of the employee’s age. The older employee who is out of work can bring with them decades of knowledge and a patient acceptance of the customer rudeness and staff politics which frustrate younger workers. Empty nesters appreciate the chance to get out of the house to be with other people on a regular schedule. Much retail employment is part-time, and for those seniors whose retirement benefits haven't disappeared in the current economic implosion, part-time work is fine. They aren't dependent on your business for high pay or comprehensive health coverage.

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Hire Staff Who Spiral In to Make Sales
Let Older Employees Use Their Skills

Monday, January 17, 2011

Offer the Time of Their Lives to Senior Citizens

As the world was getting set to be one century older—on December 28, 1999— Hallmark Cards filed for a U.S. trademark on the phrase “The Time of Your Life.” Hallmark said they wanted to use the phrase on products ranging from greeting cards to journals to paperweights, all targeted to older consumers. Hallmark’s marketing group had noticed that nearly 80 million American baby boomers were turning age 50. Not too long after the registration was approved, special sections appeared in Hallmark Stores carrying “The Time of Your Life” merchandise.
     When it came time to renew the trademark, toward the end of 2007, Hallmark instead cancelled the registration. “The Time of Your Life” merchandise had not sold well. Oh, the greeting cards and the other items were all quite upbeat—showing healthy-looking senior citizens enjoying themselves. But it appeared that few people were interested in buying items that made a point of the recipient being old. These days, Hallmark is using “The Time of Your Life” as a tag line on a greeting card designed for a 21st birthday celebration.
     Skechers is taking a different approach to woo the older consumer. Their “Comeback” campaign features retired sports stars like Wayne Gretzky, Joe Montana, Karl Malone, and Kareem Abdul-Jabbar. In the campaign, each of the stars talks about how products from Skechers could help them return to professional-level game performance.
  • Unless your retail business model is based on addressing the infirmities of old age, sell to older consumers by highlighting their capabilities and opportunities. For example, call them seniors, not elderly. Researchers at Ghent University and Vlerick Leuven Gent Management School in Belgium had older consumers evaluate the attractiveness of names for them. The participants were quite comfortable with older consumers being senior or retired. “Elderly” got negative reviews.
  • At the same time, recognize seniors’ limitations by using large fonts in ads and signage and by confirming understanding during sales presentations. Researchers at University of Toronto, University of Michigan-Ann Arbor, University of Illinois-Urbana/Champaign, and University of Michigan found that older consumers are more likely than younger consumers to get confused about which facts regarding your store and your merchandise are true and false. That’s especially so if there’s a delay of a few days between you giving the facts and the older consumer making a purchase decision. So repeat important information. In a respectful way, of course.
Click below for more:
Market to Seniors, Not to Elderly
Help Seniors to Shop Early
Emphasize Emotions with Older Consumers

Sunday, January 16, 2011

Take Two Steps Forward After Each Step Back

This last week, Kenneth Cole Productions announced they’re closing nine of their retail fashion stores during 2011. This follows the closure of eight stores and other cost-saving measures to take account of the realities of the Great Recession.
     At the same time, Kenneth Cole Productions is showing a forward-thinking, forward-moving optimism that’s produced results. Namely, five consecutive profitable quarters. Optimism facilitates retailing success. It’s a particular kind of optimism, though. It’s not a belief everything will turn out fine, no matter what. Instead it’s a conviction that you are capable of using the strengths of your business to achieve high profitability. How do you identify those strengths? You learn from the past. How do you mobilize those strengths? You focus on the future.
     This means you face the realties. In a recent article, marketing media expert Thom Forbes wrote that Kenneth Cole likes to say, “Today is not a dress rehearsal.”
     Know when to welcome all sorts of input, realizing it’s always easier to tame down an unrealistic idea than to try to make the same old ideas exciting. Know when to change to the “work your plan” implementation stage. It is a stage of determined action. And in these uncertain economic times, stay alert to a need to quickly change course, systematically closing down stores or departments or product lines until a crisis is resolved, for example.
     Monitor how you’re doing, but be careful that the monitoring does not itself get in the way. Psychologists at University of Minnesota and Texas A&M University found that when a retailer carefully monitors results toward achieving long-term goals they’ve set, time seems to pass more slowly for the retailer. And that, in turn, makes the goal seem more distant.
     This points out the importance of perseverance and creativity to add to the optimism. Which brings us back to Kenneth Cole. In his article, Mr. Forbes recounts the tale of how the company got the name Kenneth Cole Productions, of all things, in 1982: To help launch his shoe business, Mr. Cole decided to display at an upcoming NYC trade show, but to save money wanted to park a truck on the street outside the venue. Can’t do that, he was told…except you can if you’re a movie production company. Voilà! Kenneth Cole Productions was formed to film “The Birth of a Shoe Company” and show off the product to passersby.

Click below for more:
Bind Yourself to Your Plan
Learn From the Past for the Future
Monitor Your Progress Toward Objectives

Saturday, January 15, 2011

Personalize Discount Offers

The current National Retail Federation’s Stores online magazine reports on the outstanding success of a premium frequent buyer program available to Sam’s Club members at an extra annual fee. During year 2009, when the premium level was introduced, the percentage of members joining at this level grew 46%, and that percentage has continued to increase.
     The Sam’s Club program uses predictive analytics to determine what items would be attractive to each customer, based on their prior purchase history, and then offers discounts on those items. Sam’s Club does the analysis with highly sophisticated computerized systems, including algorithms that mimic the business intelligence of a skilled salesperson.
     The smaller retail operation could use simpler computer systems augmented by the live real-time business intelligence of sales staff who get to know their customers well and, during interactions with each customer, are continually thinking about what products and services are likely to interest this person. As is done by Sam’s Club, the discounts could be offered as online coupons the customer prints out or as a display shown using a mobile phone app.
     You’ll make a little money from sales of the upgrades. Still, the primary purpose is to influence the purchasing habits of your customer. Because they have paid for the ability to get rewards rather than receiving them for free, the customer will be more motivated to use the privileges. Consumer psychologists call this the “endowment effect.”
     For the customer, the appeal of the premium program is to pay less for the sorts of items they were already planning to buy and the opportunity to try out—at a reduced financial risk—brands and/or product categories they hadn’t been accustomed to purchasing, at least from you. According to retailing experts at Hofstra University, your customers’ favorite frequent shopper reward is a percentage discount on new purchases.
     For the retailer, the advantages include using rewards to strengthen the loyalty of the frequent shoppers and encouraging these shoppers to develop habits likely to lead to higher business profitability.
     As consumers hear more about behavioral targeting by retailers, they’re getting more comfortable with the notion of different people paying different prices for the same items. But still be ready to explain the reasons. Research finds that in this situation, the size of the discount is less important than is each concerned consumer recognizing they are being offered some sort of discount.

Click below for more:
Sell Upgraded Loyalty Programs
Offer Exclusive Price Discounts Cautiously
Expect Shoppers to Expect Nonexistent Discounts
Offer Frequent Shopper Benefits Beyond Discounts
Tailor Loyalty Programs to Customer Culture

Friday, January 14, 2011

Take Stock of Celebrity Endorsement Value

In the past, economic analyses concluded that an endorsement by a celebrity protects against drops in stock prices of a publically-held company. The effect was said to be substantial enough to give a company financial benefits greater than the cost of the endorsement, even if sales didn’t increase.
     Now, a study from TV advertising consultants Ace Metrix indicates that the stock of celebrity endorsements may itself be dropping. Among the 2,600 ads assessed by Ace Metrix over the months of year 2010, fewer than 12% using celebrities showed evidence of superiority over non-celebrity ads. More importantly, nearly twice as many of the celebrity ads—20%—showed evidence of the celebrity endorsement actually dragging down the ad’s effectiveness.
     Among the worst of the 2010 celebrity ads, according to the analyses, were Radio Shack ads with Lance Armstrong and Nike ads with Tiger Woods. Among the best were Liberty Mutual and Progressive insurance ads featuring Oprah Winfrey and iShare ads with Ed Burns.
     What made the difference? Celebrity endorsements do carry weight. Here are tips on how to get the best from them:
  • Feature winners. Marketing agency Zeta Interactive said that positive buzz on the Internet about Lance Armstrong dropped dramatically during 2010, the drop closely matching what happened to RadioShack’s Internet buzz during the same time period. Zeta Interactive attributed the excessive drop to suspicions Mr. Armstrong used performance-enhancing drugs during races. Golfsmith International, who call themselves the world’s largest golf superstore, reported that their sales of Tiger Wood’s signature line of golf clothes were down over 7% during a time that golf apparel sales overall climbed about 11%. Golfsmith International attributed the drop to Mr. Wood’s failures to bring home the money in PGA Tour tournament wins during that period.
  • Draw attention with the celebrity, show how what the celebrity says is logically linked to the benefits of shopping with you, and then stay with talking about your store for the rest of the ad. Research finds that celebrity ads are weaker if you start by showing the brand and end by showing the celebrity.
  • Researchers at INSEAD-Fontainebleau, Erasmus University, and University of Florida find clear advantages in arranging for endorsements from a group—such as a sports team—rather from an individual—such as a particular star on the team. Endorsement from an individual makes you too dependent on the behavior of that individual.
Click below for more:
Select Celebrity Endorsers Who Have Credibility
Get Endorsements from Groups
Consider Using a Business Character Icon
Make Your Sales Staff Celebrity Endorsers

Thursday, January 13, 2011

React When Faced with Reactance

If you put a whole bunch of sales pressure on a customer, they might rebel, becoming determined not to do what you’re trying to convince them to do. They start debating each idea you present and physically distance themselves from you.
     Consumer psychologists call it “reactance.” It kicks in when shoppers sense that their freedom of choice is threatened. Reactance occurs across cultures. It’s found not only in places like the U.S., where individual initiative is treasured, but in collectivist cultures like South Korea. It’s found in all age groups.
     The phenomenon was named by psychology professor Jack W. Brehm, whose groundbreaking studies at Duke University discovered details about how reactance works. His findings were considered so significant that he ended up achieving a highly unusual distinction: At the time of his death in 2009, his 1966 article had been the only report ever accepted by the Journal of Personality and Social Psychology without a requirement of citations of prior research.
     Although knowing about reactance is important for retailers, it’s even more important to know how to avoid, or at least delay, its onset. Doing this keeps your shoppers receptive to increasingly assertive sales appeals. Here’s what research findings suggest:
  • Your primary focus should always be on what helps your retail profitability, but as part of this, stay convinced that what you are saying to the customer is in the best interest of the customer. Then frame your sales pitch around these genuine benefits. Customer suspiciousness triggers reactance. On the other hand, research findings from Università Commerciale Luigi Bocconi in Milan, Italy indicate that reactance will be delayed when the shopper feels they owe the retailer for being helpful.
  • When you see reactance developing, physically step back from the shopper for a brief time. Whenever possible, move to a less crowded shopping area or an area in which there is a large selection of products. Researchers at Columbia University and University of British Columbia found that crowded store spaces and limited product assortment heighten reactance, even when the shopper is seeking items of a different type.
  • Verbally step back by softening the rhetoric. Researchers at University of Illinois and University of Louisiana found more reactance when using phrasing like, “It’s impossible to deny all the evidence that the TMX-890 is the only choice for you,” than with, “Purchasing the TMX-890 makes the best sense for you.”
Click below for more:
Go for Customer Gratitude and Guilt
When Space is Tight, Show Product Differences
Space Out “Bad News” Products on Shelves

Wednesday, January 12, 2011

Shortcut Giving Too Much Information

TITK (Those In The Know) realize TMI stands for Too Much Information. No surprise, then, that the current issue of Harvard Business Review chose to title their “Research Watch” item “How Online Retailers Can Avoid TMI” to report an intriguing finding: Researchers at Belmont University in Tennessee discovered that ecommerce customers are happier with receipts that include a simple line drawing of the product purchased rather than a high-resolution photo of the item. On average, those getting the line drawings were more likely both to recommend the retailer and to purchase from the retailer again.
     Why might this be? The researchers say it’s because the line drawings print out more handsomely on the customer’s home printer. I’m wondering if that’s the most important reason, though. Most home printers are quite capable of rendering a photo nicely. Moreover, a high percentage of ecommerce customers decide to save toner and a tree twig by not printing out the receipt.
     I think that, instead, the reason has to do with the amount of information a customer wants after making a purchase. According to researchers at Stanford University, University of Utah, and University of Iowa, customers usually want specifications pre-purchase, but after making the purchase, they're usually seeking simple reassurance, not elaborate details.
     Don’t flood out customers with what they’d prefer not to know. Share information selectively. If the intent is to mislead or betray, that’s sinful. But in fact, presenting information selectively usually assists the consumer. Researchers at University of Twente in the Netherlands, University of Indiana, and University of Cincinnati set out to confuse study participants by adding to the sales pitch technical jargon, unfamiliar words, illogical product groupings, and dollar prices restated as cents. The result was that the participants chose items more quickly and with more certainty than would be in their best interests.
     That’s not to say quick decisions are generally bad. Actually, the opposite is true when you keep yourself from giving too much information. Business-to-business shoppers might do a comprehensive objective weighted analysis of each product by feature. But the vast majority of shoppers will end up making a purchase as much on intuitive emotion as on the basis of scientific analysis.
     The proper answer to a customer’s question might require a detailed explanation involving some complexity. However, always be looking for ways to legitimately keep unnecessary information from your customers, whether in ecommerce or in-store.

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Take Occam’s Razor to Your Shoppers
Selectively Keep Information from Your Customers
Compare Features to Ease Overload
Ask Shoppers for Reasons to Buy

Tuesday, January 11, 2011

Heal Shattered Confidence with Playthings

A recent Global Toy News posting describes how the Red Cross in Chicago monitors house fire calls and then dispatches a staff member equipped with an offer of shelter, debit cards, and stuffed animals. It’s reported that both children and adults love hugging the cuddly toys when confronted with the reality that the home they’ve known is disappearing into flames. Beyond this, if the people do accept the offer of temporary housing, it’s likely they’ll find toys and games when they arrive at the shelter.
     The stuffed animals bring comfort since they’re something substantial, but flexible, to hold onto. The toys and games bring relief by providing distractions that pass the time. Playthings douse the flames of shattered confidence. This would be true for your shoppers who have suffered losses as traumatic as a house fire. More importantly, it also works for consumers who are dealing with everyday events that chip away at their self-esteem and sense of stability. Whatever the ages of your target customers, offer them merchandise and services which encourage play.
  • Mix fun with serious items. Researchers from New York University and University of Pennsylvania found that a shopper who makes a serious purchase decision is ready to buy an item intended mostly for play. Now, when your customer is looking around for playthings, you'll want to be sure you make those items easy to find. Have fun items available throughout the store and ecommerce site. Then display those fun items in ways which exude excitement and whimsy.
  • Sell playthings embossed with a logo carrying prestige. Researchers at University of Minnesota found that a prestige logo on even a mundane product generates confidence. For the young child, the right logo might be a picture of Hello Kitty to impress friends, while for the teenager, the choice could be a rock star or special heartthrob. The Minnesota researchers were evaluating what happens with adults, and determined a Massachusetts Institute of Technology logo works well.
  • Let people play in the store. Play puts people into what University of Chicago researchers called a “flow state.” Two characteristics of a flow state: First, shoppers buy more. Second, shoppers feel they have the skills to handle any difficulties. This is true even when there are substantial difficulties. Don’t aim to build unrealistic optimism or to unleash compulsive buying. But do be ready to help heal shattered confidence.
Click below for more:
Have Fun Items Throughout the Store
Notice Customers’ Cultural Aspirations
Flow Shoppers into Extra Purchases
Maintain Purchase Momentum in Customers

Monday, January 10, 2011

Generate the Excitement of a Football Game

How nice it would be to have your customers chanting about your retail business throughout their conversations as would devoted fans who are expressing their sentiments about a favorite football team. That’s more likely when consumers are fans of shopping with you. It has to do with interior décor, the merchandise you carry, and most of all, the interpersonal interactions. When it all comes together, shopping gives a positive emotional charge approaching that from attending an exciting sports event.
     A University of Oregon study of football game attendance suggests some ways you can keep up the thrills and pack the stadium—I mean, your store.
     The researchers found three varieties of sports fan motivation:
  • Die-hard fans. These football fans are committed to the team and love the sport of football. These store shoppers love the game of shopping, and they’re dedicated to doing it with you. Keep feeding them information about the history of your business. Have staff spend time talking with them. Post pictures of the team. Give customers plenty of notice about upcoming changes so they feel they’re in the know. Distribute business cards and special event announcements for them to pass on to their friends. Sell items carrying the store logo.
  • Fair-weather fans. These football fans like to cheer for the winners, and they’ll switch who they cheer for if games get dull. These store shoppers get their excitement from looking at the latest developments. If it’s electronics, they want to be the experts on the newest technologies. If you carry clothing, they want to try on next month’s big thing. If it’s groceries, they’re into the Food Network trends. These shoppers are much more likely to switch stores than are the die-hard fans. Keep them excited by regularly introducing new items and by presenting your classic items in novel ways. These fans like to be around winners, so use signage and conversations to tell them how your store is unquestionably best.
  • Tailgaters. These football fans are there for the camaraderie. These store shoppers get most excited about the social experience. Hold special events in and around the store. Have places in the store where small groups can exchange critiques. Give discounts when a group of shoppers purchase together.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Consider Downselling to Commercial Accounts
Get Endorsements from Groups
Consider Your Store a Sports Stadium

Sunday, January 9, 2011

Hitchhike onto Purchasers’ Shortcuts

For product categories in which purchases are made regularly and repeatedly, customers usually employ decision making shortcuts rather than process all the available information. Consumer behavior researchers have used laundry detergent as an example. Researchers at University of Texas-Austin found that half of the number of laundry detergent shoppers take no more than nine seconds to select the product. We can figure that most of those seconds are spent in locating the product and lifting it into the cart. These speedy shoppers almost surely aren’t discussing their decision with a salesperson or with other customers.
     If the purchaser’s selection satisfies both their product performance objectives and our profit making objectives, we don’t need to do much. The shopper is on automatic. But if we’d like the customer to try a new brand, we might need to depend on pre-shopping advertising, store signage, product adjacencies, and very brief salesperson interactions to steer the customer.
     In all of this, let’s hitchhike onto the selection shortcuts shoppers use. In a multinational study covering consumers in the U.S., Singapore, Thailand, and Germany, researchers at National University of Singapore identified the most common of these shortcuts, which can operate in combination:
  • Price. “It’s the least expensive.” “This is a big discount off the regular price.” Use words like “lowest price” and “20% discount.”
  • Performance. “I believe this particular product will get the job done for me in a way that satisfies me.” Briefly list product performance benefits, but not technical specifications.
  • Normative. “My friends use this product, and I care about their opinion of me.” “My mom bought this product, although I’m not sure why, but I trust her judgment.” Use brief product testimonials and phrases like, “Recommended by nine out of ten professionals,” to the degree this is true.
  • Habit or brand loyalty. “This is the same brand I’ve been buying for months.” “I know this brand well.” To steer the customer to the new brand, use words like, “As good as Clorox, but easier to pour.”
  • Variety seeking. “I want to try something different than what I usually buy.” Use phrases like, “Here’s something new and exciting!”
  • Affect. “I have a good feeling about this item, although if asked why, I’d need to create a reason, since I’m not sure.” Create a pleasant atmosphere surrounding the product, such as with pleasing colors and easy-to-read text.
Click below for more:
Switch Brand Selection with Shopper Anxiety
Change Brand Loyalty Habits Gradually
Let Shoppers Go Through Their Rituals
Dissolve Cautions About Private Label Goods
Capabilities Before Technical Specifications

Saturday, January 8, 2011

Love Your Role as Store Matchmaker

A while back, consumer behavior researchers from Memorial University of Newfoundland noted that customers don’t generally describe interactions with retailers as “relationships.” Still, there are people who will talk about loving to shop with you. How can you tell if your customers love to shop with you? More important, what does it take for them to fall in love and stay in love with your store?
     Based on results from in-depth interviews, researchers at Arizona State University and Texas Christian University described what they call “love-smitten consumers” as showing certain characteristics. Here’s my adaptation of the description:
  • Become more likely to buy from you when they’re feeling sad or unsure of themselves. You might facilitate the love by including some comfort products and indulgent services in the mix you offer. Staff expertise can instill confidence. Your shoppers love being served by experts. 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.
  • Come by the store or website when they’re feeling lonely. The Arizona/Texas researchers spoke of a passion evidenced in strong urges to visit, even if only to look. Have staff greet customers and, to the degree possible, call them by name. We each love to hear others say our name as long as it’s said to support us.
  • Use nicknames for the love object. Target might be called “tar gay” with a French accent, and Johnston Fashion Emporium might be called “Johnny’s.” This is one where you’re usually best waiting for the customers to do the nicknaming. Suggesting a nickname risks cheapening true love.
  • Commit themselves to support you for better or for worse. Build store advocacy, not just customer loyalty. Store advocacy means how often and how strongly your customers praise you to potential shoppers with specifics. Beyond “I love to shop there,” to “I get an excellent price on top-quality herring,” “Almost everyone there listens to my complaints and then makes things right,” and maybe most important of all, “I don’t go out of my way to recommend stores to people, but I feel real good about recommending this one to you.”
Click below for more:
Honor Those Who Love Those Pets
Build Store Advocacy Beyond Customer Loyalty
Have Staff Who Show and Share Expertise

Friday, January 7, 2011

Incorporate Family Values into Your Retailing

In Somerset County, Pennsylvania—population about 77,000 and shrinking—the fourth generation of the Frank B. Thomas, Sr. family has taken the reins of Thomas Drug Store in Meyersdale. The drug store first opened in the town in 1896.
     To persevere as a retail business owned and operated by one family generation after another requires a convergence of the right ingredients. Being in a community too small to interest a large retailer or a chain does help. Owning your own building helps.
     From a psychological perspective, one other ingredient is to cultivate a life outside your store. If the children grow up seeing their parents’ imprisoned by the business, unable to do what they love doing and not being with family often enough, odds are the children won’t want any part of it.
     At the same time, a distinctive marketing advantage of a business like Thomas Drug Store is that the business projects an authentic sense of family to customers and prospective customers. Some retailers say, “Make our customers feel like family.” I prefer, “Give a sense of family” because research findings seem clear that for maximum profitability, you want to be sure to keep the interactions as a business relationship. Don’t promise more than you’ll deliver. That wouldn’t be authentic.
     About twenty years ago, Thomas Drug Store demonstrated with a flair how they care about their customers as they would about family members: Adrian Thomas instructed that the store’s entire stock of tobacco products be carted to the back parking lot, where Mr. Thomas set fire to it. He was subsequently asked to speak at American Cancer Society and American Heart Association events.
     Giving a sense of family is valuable not only for retailer-to-consumer relationships, but also for retailer-to-business (B2B) relationships. According to research at University of Geneva, there are two dimensions to a business-to-business expectation. The researchers called the first type “secure business attachment.” Your B2B customer may want to rely on you for quick answers to questions about purchases made from your business and for quick solutions to problems with purchases. Very businesslike.
     The researchers called the other type “close business attachment.” Your B2B customers may want to develop close personal bonds with you or with your outside sales agent, exchanging information about family and friends. Something like family members would do.

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

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Cultivate a Life Outside Your Business
Give a Sense of Family for Emotional Attachment
Offer Family-Oriented Experiences

Thursday, January 6, 2011

Perpetuate the Health Momentum

It was around this date during a January past that while in the locker room at my local Gold’s Gym, I saw an unfamiliar face. Attached to an unfamiliar body. But it was the face that caught my eye. It was the countenance of trepidation. “Are you okay,” I asked.
     At that point, he smiled. “I was realizing right now that to get healthy, you have to do more than sign up. You actually have to go out there and exercise.”
     I’ve belonged to gyms for enough years to expect the New Year’s Resolution Flood which in succeeding weeks resolutely drains away. According to a Marketing Daily post, January is an especially busy time for gyms, but for each four people who sign up in January, one will drop out.
     Perpetuating the momentum of the health wish. That is the challenge for gyms, exercise equipment stores, weight loss programs, diabetes care maintenance programs, and all sorts of other providers of services and products catering to the consumer’s desire to stay in good shape.
     Here are some tips on peddling to the customer so they’ll keep pedaling away at your place:
  • Keep a personal approach. We’re asking customers to acknowledge their weaknesses. When they signed up, we may have weighed, prodded, and questioned them. So be sure to relate to them as people, calling them by name and asking them about themselves. 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 shared characteristics with them were more likely to sign up.
  • Provide companionship. Staying on a weight loss diet or diabetes care diet can get boring. Physical exercise can, too. So provide the social stimulation of support groups and group classes in your offerings. Have the enrollment procedures and any participant materials clearly refer to the customer as a “member.” Have staff regularly thank the customer for being a member. If the member has signed up for a limited time enrollment, the feeling of companionship becomes especially important as the renewal date approaches. When the member feels part of a network, they’re less likely to drop out.
  • Give a sense of progress. Toward the start, tell the member how far they’ve come. As they approach a goal, point out how little they have to go.
Click below for more:
Apply Systematic Desensitization to Fears
Announce Commonalities with Shoppers
Give Loyalty Program Members Prestige

Wednesday, January 5, 2011

Feature Underappreciated National Origin Products

Cheeses and perfumes from France have a special cachet, as do cutlery and timepieces from Switzerland. Your customers are more likely to find such country-of-origin associations attractive, which means you can set higher prices. However, it also means you’ll pay suppliers a premium for the items. An alternative is to feature in your store high-quality products with underappreciated national origins.
     Here are two examples identified by Harvard University researchers:
  • Chocolates El Rey in Venezuela, which sells cacao to candy makers in Switzerland and Belgium, but has difficulty selling its own chocolates to connoisseurs internationally
  • Winemaker Concha y Toro in Chile, whose Don Melchor cabernet has received ratings equal to French Bordeaux wines from Wine Spectator
     A chief advantage of stocking such products is that you’ll pay less. A chief disadvantage is that shoppers may not grant to these products the prestige deserved by their quality. The Harvard researchers suggest ways for manufacturers and suppliers to overcome this disadvantage. Here’s my version of that list, tuned to reflect the retailer’s perspective and infused with shopper psychology findings:
  • Keep prices high enough. Research at Israel's INSEAD and at Stanford University confirms that when people buy products or services at what they consider to be deeply discounted prices, they tend to end up feeling that the benefits are less than if they'd paid full price. They love having gotten a discount, but they don't have as much love for the product or service. Consumer psychologists call this the price-quality link.
  • Flaunt the country of origin. Alongside the underappreciated product, have items carrying a sterling reputation which come from the same country. We can introduce the impression of quality to the shopper's brain indirectly or subconsciously. Ideas introduced this way have a special power. Because the perceptions arrive subconsciously, the person is less likely to mobilize reasons not to buy.
  • Downplay the country of origin. The Harvard researchers analyzed how Corona beer successfully accomplished this. Early on, Corona was nicknamed “Mexican lemonade,” and rumors circulated that workers urinated into the beer during the manufacturing process. Corona chose to position itself not so much as a Mexican beer as a beer of the beach.
     Marketing researchers point out it took decades for brands like Toyota and LG to shake off their country-of-origin disadvantages. This means the opportunities for reduced supplier prices to you are more than short-term.

Click below for more:
Feature Country-of-Origin Advantages
Allow Modest Expectations of Discounted Products
Compare Unknown Brand Extensions
Prime Customer Interest with Adjacencies

Tuesday, January 4, 2011

Plan for Customers to Satisfice

In the 1950s, psychologist/economist Herbert Simon coined the term “satisficing” to refer to his finding that successful people accept less-than-perfect alternatives so they can move on to the next choices they want to make. We are satisfied with sufficing.
     But your customers, who are now making their purchase decisions in a world of seemingly boundless alternatives, might drift from satisficing toward maximizing. Maximizers hold out for the ideal and are always looking for a better trade-up. Researchers at Swarthmore College find that although people might spend more time on certain decisions than on others, maximizing-satisficing is a personality dimension on which consumers vary in stable ways.
     It’s in your interest as a retailer to have your customers toward the satisficing side on that personality dimension. For an example of why, consider the new federal legislation that requires restaurant chains with at least twenty outlets to post calorie counts on their menus and provide other nutritional information in response to customer requests. The law doesn’t take effect nationwide until March. However, a similar law in my home state of California is in effect now, and the reactions to that law are instructive.
     Quick Service Restaurants (QSRs) like McDonald’s, Dunkin’ Donuts, and El Pollo Loco have been adding lower-calorie options to their menus. But according to a recent Los Angeles Times article, the QSRs also have in the works for 2011 entrees such as bite-sized sausage links wrapped in a maple-flavored pancake and a 1,310-calorie breakfast platter. A Marketing Daily posting says that the restaurants are doing this because that’s what customers want.
     It’s another example of barbell retailing, in which consumers are avoiding the middle choices in favor of alternatives further out toward the extremes. Either the low-calorie option with the less indulgent flavor or the indulgent option with the abundance of calories. The way this works best, though, is for the customer to be a satisficer, to be satisfied with a choice that comes close to the ideal of a low-calorie fulfilling meal.
     It works nicely for the customer, at least from a mental health perspective. The Swarthmore researchers say that satisficers have higher life satisfaction, happiness, optimism, and self-esteem than do maximizers.
     It also works out well for the retailer. The Marketing Daily post points out how this bifurcated merchandising allows a retailer to increase profitability by reducing necessary inventory and, in the case of restaurants, preparation expenses.

Click below for more:
Move Ahead with Incomplete Information
Attend to Genetic Influences in Selling
Strengthen Your Barbell Retailing

Monday, January 3, 2011

Appeal to Non-Traditional Mothers

Target Corp. is ramping up a campaign aimed at moms who don’t fit the mold of a married white women in her mid-20s. Behind Target’s decision to do this are the sorts of statistics gathered and reported a few months ago by Advertising Age—statistics of interest to all retailers who market to moms:
  • Moms of young children are, on average, older than in past decades. In 1970, about 1% of first births were to women at least age 35. By 2006, the percentage was more than 8%.
  • Advertising Age speculates that the Great Recession has raised this percentage even higher, since in surveys, many women say they intend to postpone having children until they feel financially secure. Nearly 40% cited finances, while more than 20% cited career employment as what has the greatest impact on their parenthood decision.
  • About 36% of moms are not married. Although unmarried motherhood is more common among younger women, about 17% of births to unwed mothers are to women at least age 30.
  • In the U.S., about 25% of births are to women who call themselves Hispanic. Births to Hispanic women in the U.S. rose 95% since 1989, while births to non-Hispanic women fell 3%.
  • More than 40% of mothers say that advertising targeting them as a mom are ineffective, and almost 30% say those ads are unappealing.
     How might you use this information to improve your profitability now?
  • In your advertising, incorporate references to mothers who have non-traditional characteristics. The Target campaign is inclusive of ethnicity, age, and partnership/singlehood arrangements.
  • Aim your messages toward mothers who are in their 30s and 40s, not just to younger mothers. Include in advertising people who look those ages. The Target campaign shows the funny disorganization and reorganization that accompany raising a child when you’ve less energy than younger moms. Don’t take this to mean an older mother would be offended by also seeing moms in their 20s in ads. The older mothers don’t mind thinking of themselves as somewhat younger.
  • Focus on what moms have in common: Pride in their little ones. Target’s campaign is featuring Big Baby Billboards in New York and Los Angeles. People can submit birth announcements, some of which will be showing on large billboards in Times Square and at the Hollywood & Highland Center for the rest of this week.
Click below for more:
Give a Sense of Family for Emotional Attachment
Sell Product Families
Be Provocative, But Don’t Offend