Tuesday, May 31, 2011

Couch Retail Therapy for Chronic Conditions

The term “retail therapy” describes the intentional use of shopping by people who are feeling sad in order to improve their mood. Retailers who create tempting store environments enhance the effectiveness of retail therapy for purchasers, as well as for browsers.
     But do consumers seeking retail therapy go overboard in making impulse purchases from you they’ll regret later? Will any such regret lead to the shopper avoiding your store afterwards? Is it an ethical business practice to couch your sales pitches in ways that prey on a customer’s sadness?
     Researchers at Pennsylvania State University and HEC-Paris have answered those questions. With the exception of the 5% of adults who suffer from Compulsive Buying Disorder, people seeking retail therapy are fully capable of exercising self-control. Their shopping is mindful, not mindless. They restrain themselves because the restraint itself helps lift their spirits.
     These consumers do make unplanned purchases, but unplanned only in the sense that they might not have decided in advance which specific treats they will buy for themselves. In fact, research indicates that most shoppers make plans to make unplanned purchases.
     A University of Pittsburgh and Baylor University study was conducted at several Texas grocery stores. Before starting their shopping, participants were asked to estimate how much they planned to spend. For more than 75% of the shoppers, the amount they thought they’d spend altogether was more than the amount they estimated to be the cost of items they planned to buy. These shoppers had prepared themselves to come across both needs they’d forgotten to include on their shopping list and items they wouldn’t realize they wanted until the items were in front of them or in their hands.
     Then the researchers found even more evidence that shoppers carefully plan to do the unplanned: It turned out that the shoppers were very accurate in predicting how much they’d spend altogether. The average overall difference between predicted spending and actual spending was only 47¢.
     The Pennsylvania/HEC researchers also found that the restorative benefits of retail therapy last well beyond the duration of the shopping trips. These consumers associate relief with their trips, not regret or guilt for making unplanned purchases. Instead of avoiding the stores in the future, they become more likely to return whenever sadness reoccurs. Feeling down from time to time is a chronic condition. Show how you understand, and your store will become the therapeutic couch.

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

Click below for more:
Compulsive Buying Disorder. Okay, Laugh
Sell Impulse Items to Serve
Show Impulse Purchase Items for Groups
Suggest Nostalgic Items to Lonely Shoppers

Monday, May 30, 2011

Add Variety to Shoppers’ Thinking

Most shoppers are tempted to switch what they buy for no reason other than that people enjoy variety. If you want to introduce the customer to a new brand, their interest in switching is fine. However, if the brand the customer has been buying delivers good value for them and high profits for you, I’d think you’d prefer to at least delay the brand switching, even if you can’t completely eliminate it.
     Research findings from Carnegie Mellon University, University of Minnesota, and New York University suggest that we can slow down switching by encouraging the variety-seeking customer to think about other alternatives they’ve already tried. If the shopper talks about purchasing a different brand “to break out of my routine,” ask, “What are some other brands you’ve used in the past, and what convinced you to start using our brand you’re using now?”
     If the customer is talking about holding off on a purchase so they can try out a store that opened recently in the area, ask, “What are some of the stores you’ve shopped at before or in addition to shopping here, and what about our store keeps you coming back?”
     This tactic is an example of how what we do might make us money for a combination of reasons. The customer’s answers to these questions not only provide “virtual variety,” but also give us the chance to find out what’s important to this individual shopper and then use this information to make our case for the shopper forgetting about switching. Instead, we’ll work to show the customer different ways to use the same items they’ve been using up to now.
     Take inspiration from Poultry Consumer Trend Report, recently released by food industry consultants Technomic. Among the findings from the survey of 1,500 U.S. consumers was that almost 90% of Americans eat poultry at least once each week. With that degree of market saturation, variety seeking is likely. However, about 25% of chicken consumers said they’d be very likely to order chicken for breakfast if it was available. The figure was higher—at 29%--for turkey consumers welcoming turkey for breakfast. That 4% bump might be because we’ve already heard of turkey sausage.
     Think of the ways you can suggest additional uses for your most popular products. Just a change in the circumstances under which your product is used could add enough variety to prolong shopper interest.

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Slow Switching by Asking About Prior Choices

Sunday, May 29, 2011

Dazzle Customers with Surprise Gifts

My granddaughter Molly will be reaching her sixth birthday. With the help of her parents, she’s been planning her celebration. A few weeks ago, she announced that on the invitations, she’d like it to say it is a surprise party. Molly then drew a diagram of where the guests could hide before jumping up to yell, “Surprise,” when she walked in.
     I’m not sure this truly qualifies as a surprise party. Still, like Molly, many other consumers who love to plan in detail also enjoy surprises. For example, researchers at Yale University and Carnegie Mellon University found that a surprise gift to commercial bank customers resulted in significantly higher deposit account balances.
     In the Yale/Carnegie Mellon study, some bank customers with relatively high account balances were mailed unexpected gift certificates to restaurants and gas stations. The outcome was that account balances for those receiving the gift grew by $6,000 more, on average, than did account balances of those not receiving the gift. Those receiving the gifts also were more likely to praise the bank.
     Another form this can take is to have surprise specials in your store. At first glance, it might seem to be really bad business to surprise a customer with an especially low price on items the shopper had already intended to buy. After all, they’ll buy the items at the price they had expected, so why give up any of the profit? But consumer behavior researchers at University of Arizona, Arizona State University, and University of Pennsylvania found that just such a practice, used with care, can end up building your profits.
     The reason is that customers who are grateful to you will buy more from you, and nothing brings out gratitude in a customer more than finding a surprisingly low price on an item the customer already had intended to buy. They’ll buy more from you over time, and they’ll also spend more than they’d originally planned to spend during the shopping trip where they found the surprise special.
     Don’t discount most items on the person’s shopping list, and don’t stop advertising the low prices on those popular items which will draw traffic into your store. But knowing you offer surprise specials will motivate all that traffic to move up and down the aisles on a treasure hunt. What better way than this to make shoppers aware of all the products you offer them?

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

Click below for more:
Have Unannounced Discounts on Common Purchases
Tailor Loyalty Programs to Customer Culture
Thank Shoppers Freely

Saturday, May 28, 2011

Verify Suspicious Recollections

Researchers at Southern Methodist University and College of William and Mary showed some study participants ads for Orville Redenbacher’s Gourmet Fresh microwave popcorn. The ads included vivid language designed to stimulate the imagination. About a week later, the participants were asked their attitudes toward Orville Redenbacher’s Gourmet Fresh microwave popcorn. They also were asked if they’d eaten the stuff.
     Those who had seen the ads, but had never actually eaten it, were as likely to say they did eat it as were people who, instead of seeing the ads, were given a popcorn to eat identified as Orville Redenbacher’s Gourmet Fresh microwave popcorn.
     How do I know that the ad-only group hadn’t ever eaten it? Because there never was any such product. They might have eaten an Orville Redenbacher product, but it wasn’t that one. The ad-only group misremembered.
     Some of your shoppers may fully believe they’ve had experiences they’ve never truly had. They might recall seeing a price on TV or hearing about a price from a friend, but that memory is mistaken. They might have a negative opinion of a product or brand they only believe they’d tried out.
     The Southern Methodist/William and Mary research and other findings identify certain factors which make this sort of misremembering more likely:
  • Vividness. Does an ad use phrases which evoke imagery or include colorful, dramatic images? A group in the study that read a less vivid ad were less likely to say they’d eaten the popcorn.
  • Plausibility. The Orville Redenbacher name is familiar, and the phrase “Gourmet Fresh” sounds like a good name for popcorn, so thinking you’ve eaten it is plausible. Participants in the study who were shown vivid ads for Pop Joy’s Gourmet Fresh were not, one week later, anywhere as likely to say they’d eaten it than those who had been told one week earlier that the popcorn they were eating was Pop Joy’s Gourmet Fresh.
  • Motivation. It’s reported that in a Market Strategies International survey of consumers, about 14% of the respondents said they had used a Segway Personal Transporter. Considering that there are only about 80,000 Segways are in use worldwide, and most of those are owned by police forces, it looked like many people only wanted to believe they’d used one.
     Or the purported Segway users were intentionally lying.
     In any case, do verify shopper recollections you suspect to be mistaken.

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Help Shoppers Use Their Imagination
Check Instructions with Elderly Customers

Friday, May 27, 2011

Dampen Involvement to Redirect Preference

Your customer’s coming close to selecting from among the alternatives. However, the item they’re favoring is not the one that would best serve their needs or your profitability.
     Research findings from Ghent University and University College Ghent in Belgium, suggest that refocusing the shopper onto your preferred alternative can change the shopper’s mind. But do it gently. If the shopper feels pressured, they will push back against your suggestions, moving more firmly toward their original choice.
     The Ghent research findings say to keep the importance of the purchase decision low for the consumer. One way to accomplish this is to suggest that the shopper look for other items on their list and then come back to make the decision you’re concerned about.
     Once you’ve dampened the involvement, determine how much time and mental energy the shopper wants to put into selecting the item to purchase. Some people are uncomfortable spending less than lots of time considering all the alternatives, even for purchase choices they know are relatively unimportant. Other people are driven to make all shopping decisions quickly and with minimal resource expenditure.
     With shoppers who seem to want to spend minimal time and energy in making the choice, point them toward your preferred alternative. Literally. Point your finger toward the item briefly, drop your hand to your side, and then be silent for a few seconds.
     With shoppers who want to spend lots of their time on the choice, which is now relatively unimportant, ask the shopper’s opinion of the benefits and tradeoffs for each of the alternatives and reflect to them on what they consider to be the three chief benefits of the alternative you prefer.
     Don’t ask for or repeat too many reasons, though. It is not a matter of the more reasons, the better. Research findings from Universität Heidelberg and Universität Mannheim indicate that if you ask the consumer to generate loads of reasons to buy the particular product, the task becomes more difficult for the customer, and this actually makes your preferred alternative less attractive to them.
     The need to spend lots of time on choices seems to be a family characteristic. When the family group is making the purchase decision together, your asking them for opinions of the alternatives could kick off a brainstorming session in which you can ricochet off answers given by each person to formulate selling points for the others.

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Ask Shoppers for Reasons to Buy

Thursday, May 26, 2011

Clench Your Fists to Fight Temptation


There are temptations a retailer does well to resist.
  • Buying from a supplier with purchase terms that sound too good to be true
  • Accepting an offer from a customer when there’s clear evidence you can obtain a better price if you’re patient
  • Replying to an obnoxious customer by yelling the obscenities instead of muttering them under your breath
     Research findings from University of Chicago and National University of Singapore suggest that clenching your fists at the moment of temptation can help strengthen your willpower. That might not strike you as surprising. What the research does add is a note on timing: If you bunch up your fists, extend your fingers, contract your calf muscles, or stiffen your biceps too far in advance of facing the temptation, you’ll fatigue yourself, with the result that you’re actually more likely to succumb to the unwise alternative.
     However, when the muscle-clenching was done at the time of temptation, the study participants were better able to accept shorter-term discomfort in the service of longer-term gain.
     It really works only when you want to resist the temptation. If you prefer to dive in and sin, somebody watching might notice how your clenched fists are paired with an excited smile on your face.
     All of this holds for your shoppers, as well. When they are extremely tense at the moment of the sale, it will be more difficult for you to overcome objections. You could keep the tension high for a while, fatiguing the prospect into submission. Better yet, though, is to relax the shopper a bit.
     Consider fear appeals. Raise the fear only when you’ve a product or service to introduce that will substantially reduce the worry. Unless the customers come to believe that you’ve a remedy, many will ignore the risk in order to make the fear go away. Other customers won’t ignore the risk. They’ll stay afraid and probably just get quite irritated at you for getting the fear started. Either way, you’ve lost a sale.
     Many consultants advise retailers to arouse enough fear to scare people into action, but not so much that they tune out the retailer. In my opinion, a better guideline is to raise enough fear of a real danger to win the customer’s attention, but only to the degree that you’ve a guaranteed way to substantially reduce the risk.
     Then watch those clenched fists relax.

Click below for more:
Check Your Optimism When Dealing with Vendors
Scare Customers into Buying
Start Your Shoppers Feeling Yes

Wednesday, May 25, 2011

Court Market Mavens for Social Media

Compared to other internet users, the category of opinion leaders called market mavens are notably more likely to recommend for or against your store as a place to shop. According to results announced this month from a survey conducted by social marketing company BzzAgent in collaboration with University of Rhode Island, 73% of these brand advocates tell others where to shop. This figure was 59% for internet users overall. (Registration on the BzzAgent site is required to download the report.)
     Positive word-of-mouth helps convince people to shop at your store, and market mavens are particularly effective at broadcasting positive word-of mouth. Market mavens are a special type of opinion leader. Rather than considering themselves expert advisors on only certain retail products and services, market mavens counsel others about the whole shopping experience and go on to recommend specific stores.
     Consumer researchers at University of Pittsburgh and University of Arizona have used questionnaire items like the following to identify market mavens:
  • People ask me for information about products, places to shop, or sales.
  • I like helping people by providing them with information about many kinds of products.
  • If someone asked me where to get the best buy on several types of products, I could tell him or her where to shop.
Here are a few ways to identify market mavens in your community:
  • Ask your staff to be aware of customers who offer suggestions for improvements. This is one trait that distinguishes market mavens from customers who only ask questions, give praise, and give criticism.
  • Regularly ask your customers who recommended they shop with you. When you start hearing a name repeatedly, you may have spotted a market maven.
  • Team up with other local retailers to exchange information on market mavens. Research at University of Mannheim and University of Texas-Austin finds that market mavens aim to keep current about all sorts of retailers.
     Once you contact market mavens, offer them samples and other gifts, including the gift of taking at least some of those suggestions for store improvements. Give them recognition, and encourage them to exchange ideas about your store across the full spectrum of social media channels. The BzzAgent/Rhode Island study finds that more than 60% of them agreed with the statement, “It’s important that people view me as a good source of information.” The figure for internet users overall was only 24%.

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Build Buzz with Market Mavens

Tuesday, May 24, 2011

Level with Clients about Placebos

An article in the NYU Alumni Magazine raises an ethical question which directly affects medical providers, but also has implications for other types of retailers: What is the retailer’s responsibility when selling a remedy that works, but the retailer believes it is working only because the recipient expects it to?
     This is the placebo effect.
  • Many Parkinson’s disease sufferers report less agitation after a regimen of a pill that contains no known bioactive ingredients.
  • Saltwater injections often relieve pain nearly as well as does a morphine injection.
  • Toothaches can be relieved by a procedure the patient thinks is an ultrasound, but in fact is nothing more than official-looking equipment making noises.
     Is it legitimate to use such pills, injections, and procedures as part of medical care? After all, the saltwater and sugar pill have fewer side effects than the morphine and L-dopa.
     For me, the ethicality depends on relative risks, candor, and inquisition.
  • Another example of the placebo effect is that knee pain can be relieved by a fake operation, in which the leg is opened and then closed. Here, the potential risks from surgery are such that recommending a fake operation is, in my opinion, ethically wrong. Based on this logic, if there are less invasive methods for pain relief than a saltwater injection, those alternatives would be the legitimate choice.
  • The placebo effect works even when the consumer is told the mechanism of action is unknown. At this point, it’s not clear exactly how mindful meditation reduces high blood pressure and relieves depression, but it seems to me quite legitimate to say, “Many people have reported positive results with mindful meditation, so I recommend you give it a try to discover the results for you.” Similarly, it would be okay to say, “Many people have reported relief from back pain after using this pill. Medical researchers don’t know exactly why it works. But because of the absence of known side effects, I recommend we try it as our first alternative.”
  • As I see it, a spirit of inquisitiveness is necessary for use of what we consider to be placebos. We need to press for explanations of how the pill or procedure is working. Maybe saltwater is diluting the toxins causing the pain. Maybe as we carefully assess mindful meditation, we’ll see ways to simplify the routine without lessening the payoffs.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Moderate Discounts to Project Quality

Monday, May 23, 2011

Cultivate Business at Farmers’ Markets

Edith’s Gourmet Baking Company, out of Modesto, California, runs 35 shops. Well, sometimes 35. At other times of year, it’s 14, and other times, somewhere between 0 and 14.
     That’s because all the shops are booths at an assortment of farmers’ markets. The number of booths depends on the seasonal variations in how many farmers’ markets are operating. It’s a distinctive business model for retailing.
     Edith’s Gourmet Baking Company also illustrates a trend among farmers’ market businesses away from a diet of produce, eggs, and cheese. According to a recent CNBC report, the traditional diet has fallen far short of adequate profitability. Across all vendors, average monthly sales are only $1,070. Most farmers use the markets to augment other income sources and introduce themselves to the community.
     Whatever you sell, think of ways you might use farmers’ markets to spread the word. At the Pleasanton, California farmer’s market, there’s often a massage booth. The Vacaville, California farmer’s market recently had an event featuring jewelry vendors. Loads of earrings adjacent to the arugula. More and more people are coming to look, listen, smell, taste, and feel the merchandise. The number of farmers’ markets in the U.S. is now almost 250% what the number was in the mid-1990’s.
     The consumers are coming for the carnival. They bring along family and friends. They’re also coming to support a “Buy fresh. Buy local” spirit. That’s why you’re opening up shop at a farmers’ market instead of a flea market.
     Here are some shopper psychology angles on this retailing format:
  • Be flashy in your booth décor. Incorporate bright, intense colors that, if used in your bricks-and-mortar store, could easily distract customers. Have streamers and mobiles which move with the breeze to attract attention. Remember it’s a carnival.
  • Have a well-stabilized canopy. It protects visitors from the sun, the rain, and that wind. A canopy also gives your booth a sense of place and substance.
  • Have staff wear aprons in a shade of green. Show consumers green and you’ll hear descriptions like organic, healthy, and refreshing. Research says green stimulates thoughts of well-being.
  • Highlight your store logo throughout the booth, on the aprons, on any product literature and shopping bags. You want people to quickly recognize you when they again visit a market where you have a booth or are in the neighborhood where your regular store is ready for business.
Click below for more:
Open Up Profits Using Stores-Within-A-Store
Excite Consumers with Nature
Strengthen Store Identification Using Bags

Sunday, May 22, 2011

Pledge Allegiance to Patriotic Consumers

“Getting into debt is the American way.”
     This was the prevailing opinion among a group of 27 white, middle-class Americans selected and interviewed in depth by consumer researchers from Oregon State University and France’s École des Hautes Études Commerciales du Nord. By “the American way,” the respondents meant that buying on credit was extremely common. The one white, middle-class American who said she avoided credit went on to add that her un-American habits resulted in her being unable to get a cell phone and experiencing endless troubles when traveling without a credit card.
     But there was more to it: Taking on debt is patriotic, some said. It’s necessary for Americans to do it in order to keep the economy rolling.
     When a shopper considers making a purchase that is more than habitual, they weigh the amount of risk involved. If patriotism is a factor in purchases, this involves psychological risk—the chance taken by shoppers that the purchase of the product or service will threaten the image that the shoppers want to maintain of themselves.
     The lesson for retailers is that if a purchase or terms of purchase can be framed as a patriotic act, this could facilitate the transaction. The consumers might even generate the patriotism rationalization themselves, particularly if they sense they’re under attack by critics.
     An older study by researchers at University of Wisconsin–Madison, York University in Toronto, and University of Innsbruck in Austria found that owners of Hummer vehicles explained themselves with flag-waving. Here the sample for the in-depth interview consisted of 20 Hummer owners born and raised in the U.S.A.
     The respondents were acutely aware of the accusations that the Hummer is a prime example of greed and wastefulness. The owners replied that driving a Hummer exemplified, instead, the boundless frontiers and rugged individualism springing from the very founding of the nation. They saw themselves as intentionally visible defenders of America against anti-American diatribes.
     Each of these studies was done by careful researchers using accepted qualitative research methods. Still, with each of these two studies including only a limited number of interviews, the findings should be considered intriguing rather than conclusive.
     Also keep in mind that nationalistic sentiments change. For instance, did I mention that the Oregon/EDHEC interviews were completed prior to the 2008 U.S. financial freefall? No, I didn’t. I expect that consumer sentiment about getting into debt has changed since then.

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

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Satisfy Each Customer’s Self-Concept
Consider Your Store a Sports Stadium

Saturday, May 21, 2011

Bow Down Before the Shopper’s Power

It is 10:00 AM. The doors open at the Tobu Department Store in Tokyo, and as the shoppers enter, the neatly dressed salespersons are standing ramrod straight at their respective counters. Then as the first shoppers of the day pass, each salesperson bows gracefully.
     But as I watched, I didn’t see customers bowing back.
     It’s not as if the Japanese are shy about bowing. They bow toward trains arriving at stations. The children bow toward cars that have stopped so the children can cross the street. No, the dearth of reciprocal bowing wasn’t because of a lack of habit. Instead, it may have been due, in part, to the substantial time pressure under which many residents of Tokyo operate. The consumers looked more interested in spending their precious moments buying things.
     It also was an acknowledgement of power difference. The Tobu employees were bowing down before the power of the shopper to determine if the store would make a profit. The Tobu bowing ritual is a daily reminder. You’ve an opportunity to deliver that reminder in a different way each payday.
     Do you or one of your managers personally deliver the paychecks or direct deposit statements to your staff? Personal delivery provides the opportunity to recognize each employee as an individual contributor to the profitability of your business. Fully use this opportunity.
     Make mental and written notes of what your managers are doing well and how they can do even better. Your managers and supervisors should note the same regarding the employees they oversee. Then as the employee is handed the envelope with the paycheck inside, hook it to the performance with a comment or two individualized to that employee.
     I’m not suggesting this as a replacement for the daily coaching and the annual performance reviews you’ll be conducting. But getting paid is a time for celebration and rededication to boosting business profitability.
     It’s also a time to recognize where the profit comes from—customers who shop with you. No customers? There’s no reason to pull open the curtains at 10 AM.
     May I propose how to gift wrap each paycheck? In an envelope reading, “Here’s a thank you from our customers.” To keep top-of-mind awareness for the message, vary the color of the envelopes.
     I’ll leave it to you to decide if you’ll bow to each employee to acknowledge their power in your business success.

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

Click below for more:
Personally Deliver Paychecks

Friday, May 20, 2011

Resolve Incongruity via Additional Sales

In Retailer’s Edge, I lead off with the report about a customer who returns a dress because, although it would look good on her friend who recommended the dress to the customer, the customer came to realize the dress would be not aesthetically pleasing on herself. The skilled saleswoman turns this merchandise return into a potential sale to the friend.
     A variation on this theme is reflected in research findings from University of Houston and Boston College: In many cases, when a customer concludes that there’s an aesthetic mismatch between a purchase and their belongings surrounding it, the customer will consider returning the product, and this return visit can be turned into making a sale.
     We’re all familiar with stories of the woman who starts out buying a new pair of shoes, and then decides she has to get a new dress to fit with the shoes, and a new hairdo to fit with the dress, and so on. So the urge for congruity often arises on its own. But it’s more likely with certain sorts of items and in certain sorts of stores.
     As to items, the Houston/Boston research finds that it’s most likely with designer product lines, luxury branded items, and/or unusually designed consumer goods. This has to do with a regret/frustration balance. When people find that an item doesn’t fit in, they’ll evaluate how important distinctive design was in their decision to make the buy. If it was quite important, they’ll feel frustrated and want to purchase additional items to make the original purchase fit. But if the distinctive design was not an important factor, the person will regret buying the item and so will want to return it.
     And interest in further purchases is more likely when the store design is itself aesthetically pleasing:
  • The underlying design should be balanced, with mostly matching elements on the left and right and in the front and rear. But there also should be a few asymmetries.
  • Customers find visual aesthetic pleasure in layouts and décor that repeat themes. If a visual design theme is also reflected in sounds or aromas in the store, this augments the aesthetics.
  • Familiarity helps. This often results from using in the store a principle of design common in a culture. In China, stores designed according to the principle of feng shui are often familiar, and therefore more aesthetically pleasing.
Click below for more:
Design Stores with Visual Aesthetics

Thursday, May 19, 2011

Search for Better Supplier Costs

Notice how gasoline prices rise as fast and directly as a rocket, but any price drops we see at the pump come down as slowly and unevenly as feathers?
     Economists have noticed it so thoroughly that they’ve given a name to the phenomenon: Rockets & Feathers. They’ve also found Rockets & Feathers to be widespread. Researchers at University of Chicago report it occurs in about two out of every three supplier-to-retailer and retailer-to-consumer product transactions. It also occurs with services such as banking: Deposit rates respond more quickly to an increase than to a decrease in money market rates.
     However, now expect fewer feathers in the retailer-to-consumer arena. When supplier-to retailer costs go down somewhere in the marketplace, smart retailers will be dropping their prices to shoppers more quickly than they’ve done in the past. This means that unless you find those lower supplier costs for what you sell, you’ll be losing business to your competitors.
     The reason for fewer feathers is improved consumer search strategies. The tight economy sharpened price sensitivity. Increasingly comprehensive search engines and databases allow shoppers to find the best prices. Mobile technologies let them do it while they’re in your store or browsing at the competition.
     Researchers at University of Illinois and Renmin University of China find that search strategies aren’t the same when prices increase as when prices go down. If a consumer sees a price on a familiar item go up, the consumer searches diligently to locate the best deal. This behavior enforces a direct connection between supplier costs and retailer prices.
     However, traditionally, when a consumer sees a price on an item that’s only a little less than what they paid before, they aren’t motivated to search for an even lower price. That’s resulted in the prices drifting downwards in the flight path of a feather. This habit is what’s changing.
     These days, retailers overall may be seeing increases in supplier costs. One major driver consists of the signs in many quarters that the economy is recovering—giving courage to suppliers to make up for profits they sacrificed during the Great Recession. You’ll be able to justify price increases to your shoppers by explaining that your supplier costs have climbed.
     However, stay alert for any price decreases in the supplier marketplace. Be sure you’re among the first to find those lower-cost suppliers so you can rocket into a competitive pricing scheme.

Click below for more:
Check Your Optimism When Dealing with Vendors
Prepare Customers for Price Increases

Wednesday, May 18, 2011

Earn Your Way into Children’s Minds

Within days of the protests getting mobilized, the retailer withdrew this week.
     The retailer is Scholastic Inc. The protests were initiated by Campaign for a Commercial-Free Childhood, Rethinking Schools, and Friends of the Earth. The impetus was a set of fourth-grade school lesson plans titled “United States of Energy,” designed for profit in collaboration with an industry-sponsored nonprofit, the American Coal Foundation, and then distributed to educators.
     The protesting groups were saying it is evil to buy your way into children’s hearts. Scholastic might see the “United States of Energy” in a different way. Still, I believe all would agree the best alternative is to earn your way into children’s minds.
     As a retailer, work with educators to propagate your messages, but be sure the parents know what you’re doing. One tactic for accomplishing this is to—in consultation with educators from your community—develop and distribute worksheets to build consumer skills at different age ranges. University of Minnesota research findings suggest this:
  • Ages 3 to 6. These children are learning to classify products. For the younger children, it’s by size and color, which lets the child select the right product to assist in shopping and meal preparation. For children closer to age 6, the classification is by function. This helps the child accept a substitute product when a desired one isn’t available. Worksheets could show pictures of products in your store and ask the child to draw lines between ones that are similar.
  • Ages 7 to 11. Around age 7, children’s consumer skills blossom. They become better at recognizing benefits made possible by product features, moving beyond a focus on the features themselves. Their understanding increases for the correlation between money and value. They gain a greater ability to compare products and to do it on more than one dimension (such as ease of use and duration of use) at the same time. Worksheets could present a task that products in your store could be used to accomplish and then ask the child to select which of the pictured items would be the best set and write why.
  • Ages 12 to 16. Consumer skills to develop for this age range include an appreciation of multiple perspectives. Worksheet themes might include asking the future adult shopper to propose return/exchange policies and pricing structures which take account of the interests of both the customer and the retailer.
Click below for more:
Distribute Worksheets for Children
Give Elementary Schools Volunteer Time

Tuesday, May 17, 2011

Keep It Clean

A recent Morpace Omnibus survey of 1,000 consumers concludes that a clean store attracts more customers than does a dirty one:
  • Over half the number of respondents said they’ve avoided a business because it looked dirty from the outside.
  • Of customers who shopped at a store a single time and did not return, more than one-third said a reason was that when the customer entered, they found the premises to be dirty. More than half said that a reason was that the store interior was so disorganized, the customer couldn’t find what they were looking for.
     The shopper’s perception of tidiness is especially important if you want them to pick up merchandise. When customers handle products, the purchase potential grows significantly. However, researchers at University of Alberta, University of British Columbia, and Arizona State University verify what most of us would have predicted: Customers have less interest in an item on a rack or shelf when they’re thinking about who else has touched it. They feel disgusted at the idea the product could have been contaminated by other shoppers.
     The researchers discovered a few details about what causes and doesn’t cause the disgust:
  • The closer a customer is standing to the item when it’s being handled and the more people seen handling it, the more likely it is that the customer will reject the item.
  • If a fair amount of time has passed since the customer sees the item was touched, the customer no longer rejects the item.
  • The disgust is worse if there is evidence of product damage, but the disgust develops even if there is no visible evidence the product has been damaged.
     Based on all this, here are a few tips:
  • Recognize that the shopper begins forming impressions of your store well before they walk in. Keep the parking areas and the store exteriors clean.
  • Adjacent to, but separate from, shelving and racks that hold the items to be purchased, have sample items that can be handled by the customer.
  • Have staff frequently refold, repackage, and re-shelve in order to remove cues of product contamination.
  • Space out items on racks and shelves rather than have them tightly stocked. Research finds this reduces fears of contamination.
  • Avoid showing pictures of people handling the product, since research finds that can be a cue which sets off disgust.
Click below for more:
Head Off Concerns about Touching Products
Walk the Parking Areas

Monday, May 16, 2011

Limit Social Media for Prestige Appeal

Social media marketing is not for every retailer, and for those who do use social media marketing, there are situations in which it’s best for the marketer to place limits on the retailer-consumer interaction.
     Consider the findings from an intriguing study conducted by advertising agency Wong, Doody, Crandall, Wiener, as reported recently in Adweek. The study compared Facebook pages of marketers selling luxury goods with those of marketers selling FMCG merchandise. FMCG stands for “fast moving consumer goods,” characterized by low prices, relatively frequent repeat purchases by consumers, and little emotional involvement from the consumer in the purchase process. Grocery stores sell FMCG merchandise like soft drinks, cleaning products, and toiletries. On the other hand, luxury brands in the study included Giorgio Armani, Burberry, Cartier, and Gucci.
     Here’s what was found:
  • The FMCG businesses averaged about 365,000 Fans, while the luxury businesses averaged more than 1.5 million. And each post from a luxury business received just over 3,000 Likes on average, while the figure was a scant 131 for the FMCG businesses. From this, it would look like the luxury businesses generated more interaction than the low-involvement FMCG ones.
  • However, among the luxury brands, only Tiffany & Co. allowed fans to post to the company page. By contrast, every one of the FMCG marketers allowed the postings. About half the number of FMCG businesses posted surveys and quizzes, either for fun or for consumer research. None of the luxury brands did so. In the end, it looks like the luxury businesses are less approachable than the FMCG businesses.
     Adweek says that’s intentional and probably a good idea. Stanford University researchers have used “Sophisticated-Approachable” as a name for a dimension of store personality. Highly sophisticated retailers are formal, assertive, and ambitious. Highly approachable retailers are casual and sociable.
     Sophistication goes with exclusivity. Researchers at University of Pennsylvania and Southern Methodist University note that customers of sophisticated retailers prefer subtle signals in their purchases. This was learned years ago by Lacoste, which discovered that their crocodile logo stopped portraying as much status when displayed too prominently.
     Customers often pay more for the identical item when sold by a store perceived as sophisticated. If your retail business plan calls for you to sell at higher prices rather than higher quantities, you’d like each aspect of your business, including the Facebook page presence, to be more sophisticated and less approachable.

Click below for more:
Project Your Store’s Personality
Cultivate Store Prestige with Context
Make Your Shoppers Feel Special
Distinguish Customers from Friends
Offer Aspirational Shoppers Subtle Signals

Sunday, May 15, 2011

Jazz Up Humdrum Shopping

Last week marked the passing of retailer and philanthropist Leo Kahn at age 94. An Associated Press article announcing his death said Mr. Kahn helped start the age of Big Box retail stores. The New York Times headlined their article “Trailblazer in Big-Box Retailing.”
     They were referring to his co-founding of Staples, Inc. But well before Staples was Mr. Kahn’s launch of the Heartland grocery chain in the 1970s, consisting of warehouse-style stores in which shoppers picked their merchandise out of bulk shipping boxes and then bagged the goods themselves.
     I propose that a tribute to the legacy of Mr. Kahn be a continuing search for ways to jazz up humdrum shopping. After all, he did it with one of the more mundane product lines—office supplies. His Staples co-founder, Tom Stemberg, told the AP reporter how Mr. Kahn recognized that the person doing the shopping for supplies often was a secretary or office manager—someone especially likely to find the task quite boring. So Mr. Kahn proposed putting at the front of the store special items the secretary or office manager would find it fun to look at and consider purchasing.
     In our tribute to Mr. Kahn, let’s not reserve the fun for the front. Have those items throughout the store. For instance, researchers from New York University and University of Pennsylvania found that when people put a healthy food item into their grocery shopping cart, they become much more likely to select a fun food item next. In choosing the fun food item, they’re still interested in the nutritional value, but from the opposite point of view. They might very well be selecting the fun item because it’s not nutritious.
     A shopper who makes a good, sound purchase decision is ready to buy an item that’s mostly for fun. Whenever a customer makes the decision to buy a highly sensible item, offer them a follow-on sale of a fun item. Researchers from Columbia University and University of British Columbia found that the sort of variety provided by fun items even helps customers in crowded stores to feel better about their shopping experiences.
     For each of your product categories, what are some items you can include which are there mostly because they are fun to have, or even simply fun to consider purchasing? How can you display those items to project the fun, the excitement, the humor?

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Have Fun Items Throughout the Store

Saturday, May 14, 2011

Trade On the Right Trade-In Payments

How much should you offer for the customer’s trade-in when the customer is purchasing a new product? Researchers at University of Toronto and University of Minnesota point out that the amount you propose for the trade-in influences whether the shopper makes the purchase from you.
     One challenge is that when selling durable products—such as computers, skis, golf clubs, or cars—you’re aiming to convince a consumer to buy a replacement for an item that still has useful life in it. You want to set a trade-in payment that is not higher than necessary, but you want to acknowledge the residual value.
     A related challenge is the “endowment effect.” People set a higher value on objects they own than on equivalent objects they do not. Among other consumer behaviors, it explains why people hesitate tossing foods with an expiration date from last week and why people resist selling used items at a price others would find attractive. In general, people place somewhat more importance on the relative amount of the trade-in credit than on the relative amount of the replacement item price.
     A third challenge is that you might be dealing with more than one moving part. In automobile dealerships, the retailer can set an amount both for the sale of the new item and the credit for the used item. In other settings, the merchant might offer a discount on the new item price in order to lower the out-of-pocket cost for the purchaser.
     After testing how all these work together in sample situations, the Toronto/Minnesota researchers recommend:
  • For items where the new item’s cost is many times the fair market value of the trade-in, charge a relatively lower price for the new model and offer a relatively low price for the trade-in. Automobile sales would be an example because the fair market value of a car generally decreases rapidly as each model year passes.
  • For items where depreciation is slower—such as with jewelry—pay amply for the trade-in contingent on the shopper paying a relatively higher price for the replacement item.
     Another University of Toronto study finds that there more to it than the nature of the product: Who the shopper is with at the time of negotiation counts. For example, if the shopper has their mate or children with them, the endowment effect is stronger. They’ll hold out for a higher trade-in price.

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Reconfigure Your Own Endowment Effect

Friday, May 13, 2011

Gather Revolutionary Ideas from Spirals

Where should you look for ideas on how to change your business in revolutionary ways? For the suggestions that go beyond incremental adjustments? For the sorts of fundamental modifications to your business model you might find necessary if a new Big Box competitor opens up down the street or if a major employer of your target customers closes down up the street?
     To answer questions like these, business professors at Dartmouth College and University of California-Riverside reviewed the existing research on personality theory and consumer information-processing. They found that the best sources of workable, productive, revolutionary notions had a distinctive thinking style: Ideas emerged from those people in a spiral-like fashion.
     These sources would start out with a general notion of what was to done. Then in successive cycles, they’d converge on the final plan by incorporating what others suggested and what was learned from trying out preliminary approaches. They could promptly converge on a great idea, but it didn’t come out in the final form all at once. In a way, the revolutionary was evolutionary.
     Here are characteristics of these spiral thinkers:
  • Show optimism and determination
  • Talk more about the future than about the past
  • Use a blend of words, drawings, and demonstrations to describe fully-formed ideas in ways that allow others to vividly and with excitement envision the outcome
  • Discuss implementation details in terms of how things will end up more than in terms of where we are now
  • Have no hesitation in spotting and then giving up on impractical details of their own ideas, although the basic thrust of their ideas tends to stay the same as what they began with
  • Have no shame in appropriating the ideas of others
     As you seek others in your retailing community who have these characteristics, stay aware of the advantages of also developing them in yourself.
     And keep in mind two research-based cautions about using the revolutionary ideas generated by spiral thinkers:
  • Because they so smoothly incorporate the ideas of others into their own, emergent thinkers can fail to give adequate credit to coworkers. Unless you step in to accurately acknowledge the contributions of the team, resentments can build which will interfere with the new business concept working.
  • Spiral thinkers are significantly better at coming up with new business concepts than with identifying new customer segments for the current business concept.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Ask Customers & Staff for Ideas
Draw Out Advice & Opinions from Shoppers

Thursday, May 12, 2011

Emote Selectively

Researchers at National University of Singapore and Nanyang Technological University find that for certain consumers in the world, emotion sells, but for others, strong emotions irritate.
     The researchers coined the term “emotional receptivity” to describe this personality dimension among shoppers. In studies of sales presentations and fashion browsing, participating consumers felt greater enjoyment of the shopping experience and more positive feelings toward the retailer when there was a closer match of the salesperson’s level of emotional expression with the consumer’s degree of emotional receptivity.
     The Singapore/Nanyang researchers developed an inventory for measuring emotional receptivity. You’re unlikely to administer a personality test to each shopper entering your store, so you’ll need another way to do the assessment. Research findings from Universidad Pùblica de Navarra in Pamplona, Spain indicate that a good technique is to monitor the extent to which your shopper uses emotion words themselves.
     With shoppers low in emotional receptivity, a touch of happy emotion might still make a difference. Researchers at University of California-San Diego and University of Michigan offered thirsty study participants a serving of a beverage. Along with this, some of the participants were exposed to a brief image of a frowning face and some to a brief image of a smiling face. The exposure was so brief that any notice of the emotion would almost surely be subconscious. In addition, the exposure of the emotion-laden face occurred along with the person being shown an emotionally neutral face for a long enough time to be consciously perceived.
     The thirsty people shown the smiling face didn’t report feeling much different from those shown the frowning face. However, those shown the smiling face poured more beverage from the pitcher into their cup, drank more from their cup, and were willing to pay about twice as much for the beverage. A smile—even one so brief as to have no conscious effect—made for more motivated consumers.
     Emotional receptivity seems to be a fairly stable characteristic of people, cultivated by both genetics and culture. Still, within each person, it also is affected by the situation. Music and colors in the store can increase or dampen it.
     Store salespersons have emotional receptivity and expressive thresholds themselves, of course. The Singapore/Nanyang researchers hold out their findings as a source of relief for frontline retail employees. It’s stressful, they say, to be expected to display nonstop exuberance to everybody walking by.

Click below for more:
Smile Often
Know How Much Emotion to Deliver
Emphasize Emotions with Older Consumers

Wednesday, May 11, 2011

Vent Sour Tastes When Surveying Consumers

At the university that had retained my consumer attitude survey services, students were outraged about the housing office. The anger was so great that each time an attitude survey had been administered recently, those students who did answer trash-talked absolutely everything about the housing office’s operations. Because of the universal negative reactions and the low response rate, the university felt unable to accurately prioritize corrective actions. They couldn’t afford to do everything all at once, but where to start?
     As I looked over the students’ comments, I was struck by two things. First, there were surprisingly few. If these housing office consumers were so angry, why weren’t they giving specifics? Second, of the comments there, a high percentage were downright vile. I recall one that cruelly ridiculed the physical appearance of an older housing office staff member. Clearly, I was dealing with a bunch of frustrated consumers.
     I decided to do something unusual: The comments section on a questionnaire is almost always at the end, after the degree-of-agreement questions. I moved it to the start of the questionnaire and allocated lots of room for it. I was figuring that if I gave respondents a chance to vent off their sour moods, I could get some valid responses on the degree-of-agreement items which followed.
     It worked.
     A related sort of remedy was suggested more recently by researchers at Northwestern University. Here the situation could be described as a sour taste about a candy manufacturer. The manufacturer had been found to be engaging in highly immoral business practices. Study participants were asked their opinion of the candy. The researchers found that:
  • When consumers who were highly critical of the immoral behavior were not asked about this on the survey, they used their ratings of the candy quality to express displeasure. The candy tended to be rated as being of inferior quality.
  • This bias—which could affect whether a retailer carried the line of candy—was eased significantly if respondents were told at the start of the candy quality survey that they’d have the opportunity later to express their thoughts about issues other than the candy quality.
     The bias did not disappear completely. I believe it might have if the comments section had been at the start of the questionnaire.
     Negative feelings are relevant to you, retailer. When shoppers express them, know what it is they’re really talking about.

Click below for more:
Phrase Consumer Survey Questions Carefully
Interpret Survey Results as a Retailer

Tuesday, May 10, 2011

Pinpoint Feelings in Imagining of Benefits

Having shoppers imagine the benefits of using your product or service substantially increases the potential for making a sale. Researchers at New Mexico State University, Arizona State University, and Claremont Graduate School described to neighborhood residents features of a newly available cable TV service. Then about half the residents were asked to imagine themselves using the features. The remaining residents were not asked to imagine usage.
     Some weeks later, sales representatives from the cable company solicited the neighborhood’s residents for orders. Of those who had only heard about the features, about 20% chose to subscribe. Of those who had been asked to imagine using the features, almost 50% chose to subscribe.
     Building on findings like these, researchers at National University of Singapore and Chinese University of Hong Kong discovered that a crucial element in the imagining is having the shopper tune into their personal emotions rather than staying just with their beliefs about what will happen when they use the product.
     Here are some tips:
  • Having mirrors in the shopping area helps pinpoint personal feelings for a consumer. One reason is that mirrors cause us to pause and look. Another reason is that the reflection in the mirror helps a person sense the emotions they’re experiencing.
  • Since mirrors aren’t everywhere, the Singapore/Hong Kong researchers suggest using self-focused words like “I” and “my” in ads and signage. Other researchers recommend that if signage shows pictures of people using the merchandise or service, you include some people who resemble your target audience in age, ethnicity, likely physical possessions, and so on. This makes the imagining easier than when there is no plausible match.
  • Give the shopper the minimum amount of technical information necessary to set up the imagining. Then be ready to provide more details if the shopper asks. The power of imagining is greater when a person fills in their own blanks.
  • Use vivid language designed to stimulate the senses: “As you enter your room, you’ll be tempted to take off your shoes immediately so your feet can sink into the plush carpeting.”
  • Allowing the shopper to handle a product, hear sounds associated with circumstances in which the product would be used, and smell any fragrances associated with use of the product or service will all facilitate imagination that can be focused on feelings.
  • Separate requests to imagine from requests to analyze product features.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Ask Shoppers to Imagine Usage Benefits
Help Shoppers Use Their Imagination

Monday, May 9, 2011

Update Perspectives on Daily Deals

Major players, like GroupOn and LivingSocial. Smaller players, like DailyDeal and Woot. Giants ready to descend, like Facebook and Google. Countless newspapers looking to reverse sinking advertising revenue.
     It’s social couponing, that promotion tactic in which a substantial discount is offered to people who are told the offer is activated only when a certain number of others sign up for it. Generally, a new deal is featured each day.
     Findings from an April 2011 survey conducted by Lightspeed Research lead me to update my shopper psychology recommendations to you about daily deals.
     In my opinion, the Lightspeed respondent sample of 3,300 consumers was not fully representative of the entire target population for daily deals. Still, Lightspeed is very careful to ensure the accuracy of the data they collect. I recommend you consider the percentages below as good approximations:
  • Set the terms to encourage additional expenditures. About 60% of those who used a daily deal spent more than what was covered by the discount ceiling.
  • Tempt repeat business. Only six months ago, many retailing consultants were warning that social couponing attracted only bargain hunters, who would quickly jump to another merchant as soon as you charged your regular prices. But 65% of the Lightspeed respondents who took a daily deal said they returned later to the retailer. Give each purchaser of the daily deal a coupon for a smaller discount on a subsequent visit by a deadline date that fits the nature of your business’s offerings. Notice I said purchaser, not user, of the daily deal. About 23% of the Lightspeed daily deal purchasers said they had failed to use the discount before the expiration date. It’s nice that you’ve use of their money without needing to provide a product or service. But you want to avoid bad feelings associated with your store. A small sale following a large sale helps accomplish that.
  • Recognize that, for now, the majority of your customers and potential customers aren’t using daily deals. About 75% of the Lighthouse panel said they have not purchased a daily deal during the past year. Be sure your services to your current customers aren’t compromised by services to the coupon customers. Tell your current customers about the coupon offer and encourage them to enroll online for their next visit. Have sufficient staff during the time of the offer, which often means increasing your staffing.
Click below for more:
Fine-Tune Your Social Couponing
Guard Your Promotions Against Being Gamed
Keep Discount Conditions Strict Enough
Follow a Big Sales Event with a Smaller One

Sunday, May 8, 2011

Mind Your Ps & Qs in Reviews

Whether you’re selling green peas in a grocery store or hotel rooms online, the quality of grammar in what is said and written will cue the consumer about how much to trust the recommendations.
     Researchers at New York University evaluated the various factors in online product reviews that influence a shopper’s decision to purchase a specific item. They discovered that among the more important ones were the ease of reading the review—which increased when the grammar was correct—and the accuracy of spelling in the review. Demand for a hotel was greater when reviews on TripAdvisor and Travelocity got a good grade for grammar from the researchers. Sales of items on Amazon were higher when the reviews would have received a nod of approval from your former English teacher.
     The researchers found this to be true even with reviews that included what might be considered criticism of the product or service. Well-phrased critiques build credibility. You want site visitors to trust the positive information in the reviews.
     Research at Stanford University finds that a product review is especially effective when the person qualifies themselves as an expert and then presents their conclusions with a bit of uncertainty. One way for a reviewer to qualify themselves as an expert is to give specific points of comparison of the product with alternatives that would fulfill an equivalent function. Therefore, in encouraging customers to post reviews, say something like, “Please describe some of the ways this item compares more favorably and less favorably to alternatives a shopper might consider.”
     Consider whether you’d like to tidy the grammar and spelling in those reviews without changing the content. Knowing the importance of proper language to credibility with shoppers, online retailer Zappos has been doing this sort of cleanup with customer reviews that appear on the Zappos site. I would expect consumers to be much more likely to appreciate than to mind that.
     As the old English expression urging proper language usage puts it, “Mind your Ps and Qs.”

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

Click below for more:
Encourage Balanced Customer Reviews
Make Your Product Reviews Credible
Sell More by Being Less Certain

Saturday, May 7, 2011

Break Ties When There’s Limited Selection

A recent St. Louis Post-Dispatch article discusses the success of stores that have a business model based on limiting the selection of products available to shoppers. Because the store footprint is smaller and inventory management is easier, retailers who offer a limited selection can keep prices down. The Post-Dispatch article uses an Aldi grocery store as an example. Each store carries about 1,400 SKUs, compared to about 30,000 in a typical supermarket.
     A difficulty with having a limited selection is that shoppers are called upon to make tradeoffs. This can lead to them getting frozen into indecision. Consumers in Western countries resist being confined in their choices.
     Here are some ways to head off and unfreeze the ties:
  • Diversify what you offer within the limited selection. Aldi carries a health-oriented line called “Fit & Active” and a gourmet “Grandessa Signature” line. Just the presence of this diversity gives the shopper a feeling of more control.
  • Consumer researchers talk about helping customers develop a consumption vocabulary so the customers can better describe to the salesperson what they're looking for. The vocabulary allows the shopper to appreciate the differences among products. To someone without the words, it all seems the same.
  • Add a gift to accompany one of the alternatives. Researchers at University of Chicago and Columbia University find that with financial investment decisions, it even works to offer a small gift with both of two alternatives because this moves the decision toward the riskier choice, breaking the tie. The researchers call this the “mere token effect.”
  • Offer a clearly inferior alternative. A customer comes into an electronics store to buy a printer. The customer narrows the choices to two, but can’t decide and finally says she wants to look at other stores. The salesperson replies, “May I show you one more model that I think would help you decide? I hate for you to need to go shopping somewhere else.” The salesperson presents a model from a manufacturer that does a lot of advertising, but has recently not received high ratings for their printers. If asked, store staff don’t give the model high recommendations. Still, they carry the model because people ask for it based on familiarity with the advertising. Researchers at University of Toronto report that the introduction of an inferior alternative in this way often dislodges a tie and results in a purchase decision.
Click below for more:
Give a Vocabulary for Richer Shopping
Dislodge Indecision with New Choice

Friday, May 6, 2011

Count on Numbers in Product Names

I spent most of my elementary and middle school time living in Burbank and Hollywood, California, two centers of production of television shows and movies. Among my classmates were a few genuine child stars and a whole bunch of aspiring child stars, each of whom seemed to place great importance on the teacher getting their name right.
     At the start of each school year, when the teacher would ask us to introduce ourselves, I found myself tickled by the special posture and tone with which each of the child stars would announce their name. Pomposity, I’d call it. If I’d known what that word meant at my age.
     My reaction to this was a bit of mischief: When it was my turn, I’d stand up, raise my chin so my eyes appeared to be looking down at the teacher, and spell it out. “B-R-U-the numeral 3-C-E. But the 3 is silent.”
     Recently reported consumer behavior findings indicate I was on to something. Numbers in names can add a special touch, and this is where I bring it all back to improving retailer profitability. On your limited shelf space, which would you prefer to depend on to yield high sales: V8 juice or Campbell’s Tomato Juice? Levi’s 501’s or Dockers?
     Researchers at University of Florida and National University of Singapore find that, everything else being equal, a number in a product name will make it more attractive to your shoppers.
  • Small numbers add appeal to low-tech names, larger numbers to high-tech ones.
  • Formula 409 has a history of selling well, and 409 is a prime number. However, the researchers find that for unfamiliar products, prime numbers do less well than non-primes. The imaginary shampoo name Zinc 24 was liked better than was Zinc 31.
     There is an important exception to the appeal of numbers in product titles. It has to do with movie stars—child and adult—or more accurately, with the movies they star in. Researchers at University of California-Los Angeles and University of Pennsylvania found that, compared to numbered movie sequels, named sequels earn more box office receipts and receive better reviews. The researcher’s explanation: A numbered sequel seems to be too much like the predecessors—and may very well have been produced to achieve similarity with a proven formula. But movie goers prefer fresh experiences.
     When the benefit is novelty, not consistency, omit sequential numerals.

Click below for more:
Number Costs & Benefits for Desired Effects
Boast About Underdog Determination

Thursday, May 5, 2011

Repeat Yourself Repeatedly

After years of observing retailers interacting with customers and staff, I’ve decided that many of those retailers are too quick to believe you can get results by saying something once. The root cause isn’t customer or staff stupidity. It is retailer familiarity: The retailer subconsciously assumes that if they’re highly familiar with how to do a task or why a certain product is good, the other party will get the message promptly.
     Effective retailers repeat themselves. Again and again. Researchers at Harvard University and Northwestern University discovered that, on average, about 15% of communications by managers are redundant. Some of the managers they shadowed generated four or more versions of the same message. Moreover, those managers who were intentionally redundant got better results.
     It’s not just the content of the message, says the research. When you repeat yourself, you’re maintaining contact with the message recipient. You’re making your presence felt, which strengthens your influence. Staff and customers are inundated with instructions and suggestions. Repetition adds distinctiveness.
     The commission of repetition easily irritates the recipient if you’re saying the same words in the same way again and again. Based on their results, the Harvard/Northwestern researchers suggest that when it comes to supervisors giving directions to their direct reports, a face-to-face followed by an e-mail works well. Not only does this ease the irritation potential, but it also takes account of the fact that different people have different learning styles and all people remember best what’s delivered in a range of modalities.
  • Tell the person
  • Give it to them in writing
  • Show them how it’s done
  • Have them demonstrate it to you
  • Ask them to teach it to someone else and then report the results
     It does work differently when communications are with customers rather than with direct reports. For one thing, retailers are about twice as likely to recognize the need for redundancy with customers as with staff. For another thing, the retailer is less likely to recognize the availability of multiple modalities. Sending a confirmation e-mail to a staff member is natural. It takes more effort to think about sending an e-mail to a customer to follow up on a store visit.
     When talking to a group of staff or customers, another way to ease the irritation potential is to talk to each group member in turn, shifting eye contact as you do.

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

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Delegate, Empower & Collaborate
Repeat Information When Selling to a Group

Wednesday, May 4, 2011

Tally the Costs of Customer Service

Are your shoppers willing to pay more if you provide them better customer service?
     The latest information says yes, overall they are. But there are important exceptions. Unless you appreciate those exceptions, giving people better customer service might fill your retailer’s heart with warmth, but fail to fulfill your profitability objectives.
     Let’s start with the overall. Yesterday, American Express Company announced their annual “American Express Global Customer Service Barometer” findings. Three months ago, adult consumers were surveyed in the U.S., U.K., Canada, Mexico, France, Germany, Italy, the Netherlands, Australia, and India by Echo Research. A random sample of about 1,000 respondents was included for each country.
     Results were generally consistent across the ten nations. About 70% of the Americans said they’d be willing to pay more to a retailer if they were assured of receiving excellent customer service. The average premium was 13% more. In last year’s survey, 58% said they’d be willing to pay more, and the average premium was 9%. It appears that the demand for customer service is up.
     But now the cautions: Other research finds that, indeed, people are willing to pay more for superb customer service than for good customer service. They also are willing to pay more for good customer service than for poor customer service.
     However, there is no firm evidence that your customers would pay more for very good customer service than for fair customer service. If you’re aiming for a price premium based on customer service, either settle for good or drive hard and long for consistently superb customer service. Moving from fair to very good will cost you more money than you’ll recoup from any decreased price sensitivity.
     Tally the costs of providing very good customer service: Selecting the right staff, since not every potential hire is capable of learning and maintaining service skills. Having rich staff-to-customer ratios. Arranging for ongoing training both in customer service and product knowledge. Monitoring the service quality and taking necessary corrective actions.
     Leverage the investment. Your customers might swear by your customer service while at the same time swearing at the customer service offered by other retailers. But unless you continue to remind consumers why to shop with you, they might end up forgiving the others and forgetting to give you their business. If you’re banking on customer service, then feature that fact in your advertising and give customers the opportunity to thank you.

Click below for more:
Assess the Costs of Customer Satisfaction
Keep Reminding People Why to Shop with You
Help Ecommerce Customers Thank You
Know the “Don’t Know” Answer Frequency

Tuesday, May 3, 2011

Push Customers Beyond the Like Button

Happy customers are more likely to push the Like button on your Facebook page than to write a review, according to results from a survey of American adults. The problem with this finding is that both your existing and potential retail shoppers are more likely to be influenced by even a brief customer review than by a tally of Facebook Likes.
     The project, sponsored by CityGrid Media and conducted by Harris Interactive, surveyed a nationwide cross-section of more than 1,000 adults. Overall, about 20% of respondents said they use the Like button to express praise for a local retail business, while only 13% said they write a review. About 25% of women use the Like button, while 11% write reviews.
     Push your happy customers beyond the Like button by making it easy for them to post reviews. Give shoppers materials they can take away with them as conversation starters. This is especially useful for newly introduced products and items for which the purchaser incurs monetary and/or self-concept risk. With ecommerce customers, make it easy for the purchaser to send on a URL to others to show off what they’ve bought.
     Along with this, use findings from marketing consultancy Harbinger about the ways people access and use recommendations. The Harbinger survey included 2,134 women in Canada and the U.S. through the Ipsos panel. I believe that many of the study trends would also hold for men.
  • With a toy, about 20% will read reviews when shopping and about 10% will write a review after purchase. On the other hand, with an automobile, about 40% will read reviews when shopping, but only about 5% will write a review after purchase. With automobile-related products, your encouragement to women to give reviews will need to be more vigorous.
  • For almost all product and services categories, family and friends were the most popular sources for recommendations. But for restaurants, casual acquaintances were the second most popular source, and for financial products, family and friends took second place to expert and professional reviews.
  • For almost all product and service categories, consumers were motivated to give and post recommendations in order to help other people make smart purchases. With automobiles and entertainment, a distinctive motivator was for the consumer to display her expertise. With the home furnishings and food/beverages categories, a distinctive motivator for sharing was the opportunity to help improve the products.
Click below for more:
Attend to Face-to-Face Word-of-Mouth
Generate WOM in the Right Places
Encourage Specifics & Criticism in Word-of-Mouth

Monday, May 2, 2011

Build on Couples’ Decision-Making Rituals

When a married couple make a purchase decision together, they are either developing or following rituals. By building on those rituals, you can guide the couple’s preferences.
     The newly married may have already set up housekeeping and therefore made many shopping decisions together already. However, shopping after the ceremony brings out different power dynamics. Both the man and the woman are each subconsciously influenced by how their respective mom and dad handled the decisions. The challenge for the retail salesperson is to track the ritual, which is still in a formative stage.
     The long-married couple have settled into their shopping-together rituals. Here, the challenge for the retail salesperson might come from the ritual being so automatic and quick for the couple that it is hard to discern.
     A set of classic cross-national studies by researchers at University of Chicago and Belgium’s Catholic Universities of Louvain and Mons concluded that the relative dominance of husband and wife depends on the type of product or service being considered when the couple shop together:
  • Husband-dominant: Lawn mowers, hardware
  • Wife-dominant: Children’s clothing, women’s clothing, groceries, toiletries
  • Shared dominance: Cars, refrigerators, televisions, living room furniture, financial planning services, vacations
     Subsequent research described how these overall patterns differ by cultural background. Mexican-American couples are more likely than others to have husband-dominant patterns, while African-Americans are more likely to have wife-dominant patterns.
     Even when there is shared dominance, the husband’s and wife’s decision making styles differ within the couple. While making the decision, the man’s objectives are underpinned by a desire to ensure his individual specifications are met, while the woman’s objectives are underpinned by a desire to have the shared specifications of the couple met.
     Very frequently, 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. Rather than viewing such couples as having opposite attitudes, view them as having complementary approaches. They married each other to help moderate the extremes. When making a sale, give them sufficient time to work their magic with each other.
     All these are overall tendencies, of course, and so differ among individual couples. Still, by remembering the tendencies, you’ve a starting point for identifying and building on the rituals.

Click below for more:
Identify Influencers in Family Decision Making