Wednesday, November 30, 2011

Present Low-Risk Comparisons for the Nervous

In comparative selling, the phrasing we choose could be saying to the prospective customer, “The item I’m suggesting to you is better than the alternative you’ve been considering.” Or our phrasing might be communicating, instead, “The alternative you’ve been considering is not as good as the item I’m suggesting to you.” It’s a positive framing versus a negative framing.
     Does it make a difference? Researchers at Babson College and Western Kentucky University find that it does.
  • When presented the comparison as a positive frame, shoppers tend to analyze the product features more carefully than when a negative frame is used. If your good reputation as a retailer has not been firmly established, you’re more likely to influence the shopper by using a positive instead of a negative framing.
  • When presented the comparison as a negative frame rather than as a positive frame, shoppers become more likely to consider the quality of the store surroundings, how much expertise the salesperson seems to have, and how positive a mood they find themselves in. They’ll still look at the lists of features and compare the prices, but these will carry somewhat less importance when there has been negative framing.

     A third alternative is to say to the consumer, “What I’m suggesting to you is just as good as the alternative you’ve been considering.” It’s not that one is better or one is worse.
     Are there situations where this phrasing is best?
     Yes, say researchers from Indiana University, Northwestern University, and New York University. The situations are ones where the shopper believes the decision is a risky one. With one or a combination of the following sorts of risks, the shopper wants to know that, whichever choice she makes, it’s likely to work out fine.
  • Functional risk: “Will the product or service solve my problem or meet my needs effectively and efficiently?”
  • Financial risk: “Am I paying too much money?”
  • Time risk: “If I make this purchase, does it mean investing too much time for what I gain?”
  • Physical risk: “Is my health or safety or that of those I love in danger if I use this product or service?”
  • 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?”

Click below for more:
In Comparative Ads, Don't Show Users
Relax Caution About Comparative Imagining
Reduce Unwanted Risks for Your Shoppers

Tuesday, November 29, 2011

Effect Spillover Buys via Surprise Specials

In a research article published a few years ago, Professors Narayan Janakiraman at University of Arizona, Andrea C. Morales at Arizona State University, and Robert J. Meyer at University of Pennsylvania asked readers two questions:
     “Consider a consumer who makes an urgent late-night visit to a local supermarket to purchase a pain reliever. Upon arriving she notices that the store is offering routine discounts on a number of unrelated goods such as milk and paper towels, and she makes a mental note to pick up a few on the way out.
     “But she then encounters an unexpected shock: She sees that the pain reliever is being sold at twice its normal price. Will this negative surprise affect her decision to buy the other, unrelated, items she saw in the store?
     “And what if the situation were reversed; would she be any more likely to buy extra items if the store was offering an unexpectedly large discount on pain relievers?”
     From your retailing experience, how would you answer those questions?
     The correct answers have to do with cross-category spillover effects. When a shopper encounters an unexpectedly high price on an item in a particular category, she becomes more likely to purchase an alternative in that same category, but less likely to purchase items in the store from other categories. If the name brand pain reliever is being sold at twice the price she expected, she’s more likely to buy the house brand pain reliever, but she becomes less likely to buy the milk and paper towels, even if they’re being sold at a discount.
     The answer to the first of the two questions above is “Yes.”
     That’s also the answer to the second question. In the Arizona/Pennsylvania study, participants had to buy an essential item at the store because they were completely out at home, and they also could buy other items while at the store. In one experimental condition, the essential item was priced 80% lower than usual.
     This surprise discount resulted in about an 8% increase in the quantities purchased of other items available at the store. On average, this could much more than make up for the lower profit on the item sold at the 80% discount.
     This study doesn’t stand alone. Other researchers found that giving shoppers an unexpected cents-off coupon for the purchase of one product in a store increased overall spending at that store.

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Have Unannounced Discounts on Common Purchases
Look at the Whole Picture in Profitability
Try Out Dollar Over Percentage Discounts

Monday, November 28, 2011

Leverage for Changing Consumer Behavior

With a name like Unilever, you might expect them to announce one, not five, levers for changing consumers’ behavior in buying and using products.
     Unilever’s broad portfolio of brands includes Dove, Vaseline, Lipton, Hellman’s, and dozens more. Chances are their products are on your shelves or the shelves of a retailer in your area. They’re sold in 180 countries.
     The “Five Levers for Change,” published earlier this month, were developed by a team of experts which included Dr. Richard L. Wright, Behavioural Science Director at Unilever. I’ve topped off the list of five with two bonus tips and added a few research-based angles:
  • Make it important for yourself and for your customers. Before you undertake efforts at behavior change, check that you’re aiming for differences which will benefit all around. You’ll earn a higher profitability. The customers will achieve better value than they are now.
  • Make it specific enough. Identify the current set of consumer behaviors, the desired replacement behavior set, possible incentives for the consumer making and sustaining the change, and likely disincentives for the consumer making and sustaining the change. Not overly specific, however. Recognize there are almost always a variety of ways consumers can change their behaviors to achieve your desired outcome.
  • Make it understood. Raise awareness of the benefits of the change among consumers and your retail staff. Don’t assume that people promptly recognize why they should change. Acceptance often requires repetition over time and reminders in a variety of ways.
  • Make it easy enough. Confidence comes from convenience. Convince consumers that they are capable of making the changes. At the same time, maintain enough difficulty to intrigue the consumer and let them know this change is more than trivial.
  • Make it desirable. Show how the new behavior fits in with how the consumer likes to think about herself and enhances what others will think of her. Your promises here can range from helping the consumer to show off to allowing him to show social responsibility.
  • Make it rewarding. Once your customer has changed his behavior, point out the gains. Unilever says that this step demonstrates the proof and the payoff.
  • Make it a habit. You want to maintain sufficient motivation to hold the changed behavior in place. After it’s carried out repeatedly, it becomes part of the consumer’s repertoire. To the degree you can, catch consumers at the times they’re choosing what to do.
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Acknowledge Inertia in Consumer Behavior

Sunday, November 27, 2011

Feather Your Shoppers with Light Thoughts

Researchers at National University of Singapore have been studying the effects of a shopper’s physical tension on purchase behavior. In collaboration with University of Chicago researchers, they found that clenching one’s fists at the moment of temptation strengthens resistance to making a buy.
     Timing counts here. If the shopper bunches up his fists, extends his fingers, contracts his calf muscles, or stiffen his biceps too far in advance of facing the temptation, he will fatigue himself, with the result that he’s actually more likely to end up succumbing.
     This suggests that when your prospective customer is tense at the moment of the sale, it will be more difficult for you to overcome objections. I guess you could keep the tension high for a while, fatiguing the prospect into submission. Better yet, though, is to relax the shopper a bit.
     That idea is central to a later set of studies, this time in a collaboration of researchers at National University of Singapore and Chinese University of Hong Kong. First, it was confirmed that physical tension does lead to consumers taking relatively routine purchase decisions quite seriously. To produce tension, the participants were asked to hold shopping bags full of water bottles. Then another set of participants who had carried the heavy weight were instructed to think about feathers and balloons. It turned out that this was sufficient to lighten the mental load. These feather-weight participants were more open-minded when thinking about purchase evaluations.
     Lift the spirits of your shoppers. An abundance of research finds that if store staff exude a positive mood, it increases sales.
     It was in spring 2005 that Ben & Jerry's ice cream shops introduced customers to a special selection of new flavors. With names like Chocolate Therapy, Apple-y Ever After, and The Last Straw, these flavors were not, as it happens, designed to stimulate the romantic urges we associate with spring. No, the Ben & Jerry’s folks intended the new flavors to soothe rather than stimulate.
     Ben & Jerry’s had been receiving bundles of correspondence about what an entire sorority had named their “breakup ice cream brand of choice.” The ice cream shops were ready to lift the spirits of their recently-dumped customers.
     Context does matter, though. When life has tarred and feathered you, feathers may not lighten your thoughts. If your customer is feeling grumpy, she might not want a salesperson flaunting nonstop happiness.

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

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Clench Your Fists to Fight Temptation
Start Your Shoppers Feeling Yes
Lift the Spirits of Your Customers

Saturday, November 26, 2011

Bug Shoppers with the Positives

NYC’s Brooklyn Kitchen has drawn notice for their Mexican feast special which included smoked corn custard sprinkled with pale yellow, squirming wax moth larvae along with chapulines, those little fried grasshoppers described as tasting like the exoskeleton of a potato chip. Not too long after that, Bloomberg Businessweek was reporting on the opportunities for retailing all sorts of bugs as food ingredients and nutritional supplements.
     Decades ago, Australian vendors of deer meat undertook a campaign to convince prospective consumers that what others might call a gamey taste was more accurately experienced as full-flavored. Such a marketing challenge is minor compared to convincing consumers in many parts of the developed world that eating insects makes sense.
     The tactics—bugging shoppers with the positives—can be applied to a range of retailing endeavors.
  • Go overboard in addressing common concerns. For example, the world of insects does carry the stigma of being awfully filthy. So the highly successful insect merchant World Entomophagy publicizes their strict standards: The bugs are fed only oats, vegetables, and fruits. Organically-grown oats. Vegetables and fruits that are both organic and locally grown.
  • Appeal to social responsibility. Although consumers often select the socially irresponsible choice, they want to think of themselves as socially responsible. Have you heard about researchers at Wageningen University discovering that breeding insects for food produces far less greenhouse gas per gram of meat than breeding livestock? If not, Hotlix, which has, for decades, been selling lollipops with a scorpion inside each, would be pleased to tell you. To establish credibility, they might add that Wageningen has as a mission statement, “healthy food and living environment.”
  • Hide the downside. Be ethical and follow all laws in doing so. Simply recognize that there are some things some consumers prefer not to know. Etom Foods is developing ways to extract meat from crickets and grasshoppers, then throwing away the unsightly parts of the body.
  • Get influential endorsers. BugMuscle is pumped up on using crickets, mealworms, ants and housefly pupae as a legal source of steroids, so is lining up bodybuilders to recommend BugMuscle nutritional supplements.
  • Tout the challenge. Consumers go on the most treacherous roller coasters not only for the stimulating physical sensations, but also for the sense of pride achieved in prevailing over fears. To draw shoppers, publicize the thrill of confronting the exotic. Tell people they’ll be able to take away memories to verify their show of courage.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Ease the Guilt for Adult Unhealthy Eaters
Impress with the Exotic

Friday, November 25, 2011

Limit Variety as Shoppers Approach Goals

For many years, consumer behavior researchers have known that a large variety of offerings attracts shoppers, but as shoppers get closer to wanting to make a purchase decision, they welcome a pruning down of variety. They prefer a smaller assortment to assess.
     Now researchers at University of Maryland find a parallel phenomenon with consumers who are working toward a goal over time, such as a fitness program, a diabetes maintenance program, or physical rehabilitation from a serious injury. At the start of the program, the merchant or professional should offer the customer a broad variety of assistance items. Then as the customer feels closer to achieving the goal, offer a more limited selection.
     In one study, the researchers asked each of a set of college students to write down an individual fitness goal. Next, some of the study participants were given evidence they were close to reaching the goal, while others were led to believe they were far from the goal.
     All the participants were then shown a set of six protein items. In some cases, the items were all protein bars differing only in flavor. Six different flavors. This was a low-variety set. The other participants—some who felt close to their goal and some who felt far from it—were presented a high-variety set that included a protein bar, a protein shake, and four other forms of protein supplement. Six different forms.
     As a last step in the study, each participant was measured on their motivation to achieve the fitness goal. Here’s what the researchers found: Among consumers who felt far from the goal, motivation was higher when the consumer was asked to choose among the high-variety set. On the other hand, among consumers who felt close to the goal, motivation to achieve the goal was higher when the consumer was asked to choose among the low-variety set.
     Based on findings like these, the researchers suggest the plan of offering the goal-seeker a broad variety of assistance items at the start and then, as the customer feels closer to achieving the goal, offering a more limited selection.
     With a self-help group working together toward a goal, the “from lots to little variety” works best when the group feels they are all at a similar progress point. One way to accomplish this is for the service provider to encourage group members to take responsibility for each other’s progress.

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

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Protect Shoppers From Too Many Choices
Perpetuate the Health Momentum

Thursday, November 24, 2011

Map Mobile Device Users to Buy from You

Millennial Media reports substantial growth in mobile device ad campaigns using maps. Since Millennial Media is the largest independent mobile ad company in America and reaches users in more than 250 territories, that fact about maps has significance for retailers who use mobile technology marketing.
     From the second quarter to the third quarter of 2011, there was a 27% increase in mobile device ads which allow a shopper to view a map to get to the advertiser’s shop. It’s said that when William T. Dillard—who founded the Dillard’s department store chain—was asked what were the three most important factors for the success of a retail operation, he answered, “Location. Location. Location.” He’s often credited with originating that phrase, even before real estate agents began claiming it as their own. But whatever your location, you’ll want to bring ’em on in to you with maps.
     Consumer enchantment with technology, and with GPS systems in particular, increase the influence of maps. Even when the shopper knows where you are, they’ll have more fun when there’s a map to follow. And prospective customers may not know where you are.
     Once the shopper is inside your store, encourage her to use a mobile device to keep others posted about her shopping experiences and to invite others to participate. A repeated finding in consumer behavior research is that when people shop in groups, the total of what they buy is usually higher than the total would be if each were shopping alone. Here, too, maps can add to the enjoyment.
     In this case, it would be a map of the store. Your message could be, “Did others come shopping with you today, but are in a different part of the store? Get in touch with them using your mobile device, tell them where you are, and get their thoughts on what you’re shopping for.”
     In addition to providing directions and entertainment, maps increase sales because they are images. Psychologists at Dartmouth College and Arizona State University provide evidence of how when we imagine carrying out an action, we’re significantly more likely to actually do it. As the shopper traces out a route on the map, their motivation to take that route goes up.
     There does need to be more than the map, though. The Millennial Media study found that the top activity for mobile device users is to find a good value.

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Locate Mobile Shoppers in Your Space
Encourage Group Shopping

Wednesday, November 23, 2011

Give a Free Token to Shift the Odds

USA Today reports that some big retailers are augmenting Black Friday sales with free gifts to shoppers. J.C. Penny has almost two million Disney snow globes ready for distribution. A customer who is among the first 1,100 to spend at least $40 at an Old Navy store gets a Kodak EasyShare Sport digital camera—said to retail for about $100—tossed into the bag at no extra cost. Sears is handing out a collectible Christmas ornament to each of the first 200 Black Friday shoppers who buys clothing, intimate apparel, or accessories.
     Notice that these are not surprise bonuses in the style of a Louisiana or Mississippi lagniappe. The retailers are spreading the word about the gifts in advance in hopes of drawing shoppers toward them during the limited hours of Black Friday specials.
     This added twist might seem to make it even harder for you to keep your loyal customers coming to you to buy items they could purchase from the larger retailers. In fact, though, the publicity around these free gifts can shift the chances back toward you. If you’re willing to distribute holiday presents as well.
     Researchers at University of Chicago and Columbia University find that a gift can break ties. Here is your customer who enjoys shopping with you and, if truth be told, hates going out in the middle of the cold night, even to save money. But then your customer starts thinking about the free camera or the snow globe. Wait! Now your customer discovers they can get a gift from you as well. They can easily justify staying home and warm and spending their money with you during daylight.
     Your gift must have apparent value. The fact that it’s being given for free can itself give the impression of cheapness. Still, the gift need not be extravagant. The Chicago/Columbia researchers call the phenomenon the “mere token effect.” A little something can work as well as an expensive item in tilting the odds.
     You don’t have to give away the shirt off your back. No, Abercrombie & Fitch already has that one covered—or actually, uncovered. As the calendar turns to Black Friday at midnight, rolling across America’s time zones from east coast to the west, emerging from each store will be the famous shirtless male greeters. Presumably, those fellows are able to handle going out in the middle of the cold night.

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Break Ties When There’s Limited Selection
Give Free Samples of New Products
Maintain Purchase Momentum in Customers

Tuesday, November 22, 2011

Correct for Language Preference on Surveys

When surveying consumers about their likes and dislikes, use images of happy and sad faces on the degree-of-agreement scales. That’s the advice from researchers at Erasmus University in the Netherlands. Their advice is directed to situations where the consumers’ primary language is not English, but the questionnaire is being administered in English.
     The researchers’ reasoning is not what you might think. Sure, if the respondents don’t read or understand English well, it makes good sense to provide, in place of words, pictures with universally understood meanings. The smiley face means you like it. The frowning face means you dislike it.
     However, the researchers’ argument is that even when the survey respondents can comprehend English just fine, those who are not native speakers tend to interpret emotion words differently. Specifically, according to findings, they tend to report more intense emotions when answering in a non-native language than when using their favored language.
     “Love” and “hate” don’t feel as strong in the second as in the primary tongue. It loses something in translation. So where the Spanish-speaker might say “disagree somewhat” on the Spanish-language version, he’ll say on the English-language version, “strongly disagree.” Experts on multi-language survey administration have called this the Anchor Contraction Effect (ACE).
     One approach to addressing ACE is to administer consumer attitude surveys in people’s favored languages. However, top-quality translation is expensive. To start, we’ll have a skilled professional translate from English into Spanish, for example. Next, we’ll have another skilled professional, who has never read the original English version, translate from the Spanish back to English. This “back-translation” assesses how well the English-to-Spanish maintained the meaning of the original. We keep at it until the degree of distortion from translation is minimal.
     Using the happy and sad faces is a less expensive approach.
     Another way to reduce the chances respondents ACE the survey questionnaire is to remind them they’re using a nonnative language. The whole personality of the customer changes between languages. Researchers at Baruch College and University of Wisconsin-Milwaukee studied what happened to bilingual Hispanic women as they switched between speaking English and speaking Spanish in American settings.
     The researchers found that the women tended to feel more assertive when speaking Spanish than when speaking English. And when these women read English text, as might be used in a survey, they were less likely to take risks, such as exaggerating the statement of their emotions.

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Have Bilingual Staff for Bilingual Shoppers

Monday, November 21, 2011

Inventory the Damage from Sold Out Items

When preparing to consult with a retailing community, I visit the stores. I make it clear I’m there to discover, not to give advice. The advice comes later, after I’ve mastered enough to deserve credibility. Often, that credibility comes from exploring what the consumer psychology literature has to say.
     During a visit last week, I was asked about out-of-stocks. This store features jewelry, wood, and gourmet food items. The value of the items is that they are distinctive, not commonly encountered. When the stock of food items is depleted, the store proprietor can order more, but when a handcrafted jewelry piece is sold, it often can’t be replaced with an identical match. And even with the foods, a shop of limited size can’t afford unlimited inventory.
     Well, a while ago, a man came into the store, fell in love with a particular jewelry item, then left without buying it. When he came in again some days later, he inquired after the item. “It was sold,” said the store owner. “Why did you sell it?,” he asked. “Well, that’s what I do for a living,” she answered. He seemed irritated.
     The owner doesn’t like to irritate shoppers. What’s the risk of losing the customer?, she asked me. What should she do? My first reaction was, “I’d think that shopper would’ve learned how when he comes into your store and sees something he loves, now’s the time to purchase it.”
     Whoops, I caught myself violating my principles. “I’m here to discover,” I said. “I’ll think about it and dig into the research.”
     It turns out that researchers at Georgia Institute of Technology and Emory University had part of the answer. In the short term, encountering a stockout causes someone who is already a regular customer to buy more on the next few store visits, all right. However, repeated stockouts sharply decrease customer loyalty and consequently, the total dollar amount of purchases over the customer’s lifetime with the store.
     In the type of retailing where such out-of-stocks are inevitable, here’s the research-based procedure:
  • Briefly empathize with the disappointed shopper.
  • Ascertain what the customer liked about the item.
  • Propose an item that has the desired functions, but is in a different category.
     The third step does sound odd. Researchers at American University in Washington, D.C. and University of Arizona find it works because it gives the shopper more of a sense of control.

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Control Out-of-Stock Irritation
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Shoo Away Negative Customer Feelings

Sunday, November 20, 2011

Tell Shoppers to Be Happier

Researchers at Georgetown University and Ben-Gurion University were intrigued by the success of the Nike slogan, “Just Do It.” Classic consumer behavior research says that if you tell a shopper what to do, they’ll move away. If you put a whole bunch of sales pressure on a customer, they tend to 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, where an important value is to go along with what will please others. Classic consumer behavior research has found reactance among all age groups.
     Yet “Just Do It” gets it done when it comes to making money for Nike retailers. Why? The Georgetown/Ben-Gurion researchers find that highly directive sales messages do not trigger reactance if the products or services bring happiness. The happiness might come from immediate sensual pleasure. The salesperson for the spa says, “You belong on our massage table.” Or the happiness might come from an anticipated sense of accomplishment. Running the marathon in Nike shoes qualifies under this prong.
     Contrast this with what would happen at a bank where the staff want to store your money. In the Georgetown/Ben-Gurion study, some participants read a message encouraging them to try a chocolate treat. The other participants’ message encouraged them to open a bank account.
     Those in the first condition responded best to an assertive message, “You must try our chocolate.” Those with the bank message responded best to a non-assertive pitch, “You could open a bank account with us.”
     When the researchers analyzed slogans for retail products, they found that 24% of hedonic products—such as ice cream, beer, and designer jeans—have assertive slogans. Among utilitarian products—real estate and diapers, for instance—the percentage was only 8%.
     Never push the customer too hard. Otherwise you’ll push her away from this sale and future sales at your store. However, at any point where what you’re selling is pleasure, up the assertiveness. Be sure you’re convinced this is the right purchase decision for this shopper. Then, with justified confidence, let her know why you are convinced.

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React When Faced with Reactance
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Be Just a Little More Upbeat Than Your Customer

Saturday, November 19, 2011

Party Right…Or Left or Middle

Stay aware of partying.
     A case in point: As a YouGov posting points out, Herman Cain’s leadership of Godfather Pizza ended fifteen long years ago. Yet his repeated association with the restaurant retailer’s name in political reporting is influencing consumer perceptions.
     The YouGov BrandIndex measurement, which goes from -100 to +100, is compiled by subtracting negative feedback from positive feedback on consumer ratings of quality, value, reputation, satisfaction, and willingness-to-recommend.
     Last February, prior to Mr. Cain’s declaration of intention to be the Republican candidate, the BrandIndex was mildly positive for Godfather’s Pizza. Republicans, Democrats, and Independents were all within four points of each other.
     Beginning in May, after the announcement, the index climbed markedly among Republicans, dropped markedly among Democrats, and vacillated in the middle among Independents. Later, when allegations of sexual harassment by Cain spread, the Godfather Pizza BrandIndex dropped sharply among Democrats and Independents. It continued to climb among Republicans. It’s now at about +16 among Republicans, +3 for Independents, and -9 for Democrats.
     Impressions through association are not news for retailers. They’re why celebrity endorsements and special appearances are used. Because of the highly polarized political climate in America now, associations of the merchant with a political party have additional impact.
  • Research findings from Iowa State University, University of Illinois, and Pennsylvania State University suggest this sort of generalization is more likely to occur and persist when the consumer is in a positive mood. Having a good time, loving the pizza, and planning to vote Republican? Then your positive opinion of Godfather’s is multiplied.
  • University of Minnesota research indicates the effect is more likely when there is conceptual similarity. Receiving service from an African-American Godfather’s employee or discussing politics over lunch? Then the move in the positive or negative direction is amplified.
  • The effect is more likely with prestige retailers than with others, according to researchers at University of South Carolina and University of Minnesota. The political affiliations of a Bloomingdale’s count for more with the consumer than those of a Walmart.
  • A set of research findings indicate that the contamination of retail brand image by political association can be reduced by encouraging consumers to think analytically instead of holistically. If you want to sidestep the effect, bring attention to specific product and service features in advertising and face-to-face selling. If you want to enhance the effect, talk in generalities, such as, “We’re your best bet.”
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Celebrate the Celebrity Appeal
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Friday, November 18, 2011

Dress Up Your Neighborhood

San Francisco has a sense of style. Up through the early 1960’s, most women wouldn’t think of shopping in downtown San Francisco department stores in casual clothing. It also was around this time that Malvina Reynolds wrote “Little Boxes” to protest the “ticky tacky” exterior design of buildings in Daly City, south of The City by the Bay.
     Many downtown San Francisco storefronts no longer project the elegance like decades ago. Still, the city does pride itself on having distinctive neighborhoods in which retailers do dress up store exteriors.
     In any city, keeping up appearances outside can be more difficult than handling the interior décor. Store owners often don’t own the building itself so have limited control over the exterior. Concerns about homeless populations and street demonstrations can shift the store operator’s criteria for outside design from decorative elegance toward bland architectural security.
     Municipalities, short on funding, are placing more emphasis on industrial parks and Big Box power centers, since they pay such a high percentage of the property and sales tax revenues. Small to midsize independently-owned retail operations get fewer publically-funded amenities. And often, there’s lax enforcement of city regulations mandating quality standards for exteriors.
     Overcome these difficulties in order to use your store to dress up your neighborhood. While you’re decorating the interior of your store for Christmas, decide how you can portray the personality of your business and of your neighborhood on the outside.
     If you’re thinking how difficult that will be, take inspiration from a new set of San Francisco boxes. These days, nine shipping containers are positioned on top of a vacated parking lot along a block of Octavia Blvd. Called the Proxy project, the tiny shopping center includes, so far, an artisanal coffee vendor, an ice cream maker, a museum shop, and—taking up five of the nine boxes—a beer garden.
     Proxy drew praise in a feature article by John King, Urban Design Writer for the San Francisco Chronicle. An important part of the appeal is that each shop-in-a-box looks much better than bare asphalt. Along with this, they together create a sense of community.
     The boxes are considered a limited-time solution until development funds and retailers’ interest grows further. Also, former shipping containers as store space do exemplify the values of recycling. Those values resonate with San Francisco consumers. The boxes almost certainly would’ve gotten a pass even from Malvina Reynolds.

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Form Retailer Groups for Practices Recognition

Thursday, November 17, 2011

Eye, Robot

When you enter Book Shop Benicia, your eyes are drawn to the neatly chevroned shelves. Unless you’re a three-year old boy, that is. The eyes of those consumers are often drawn to what sits on top of the tall shelving along the outside walls. Robots. All kinds of toy robots. Dozens of toy robots.
     As shoppers enter your store, where do their eyes go? That’s where to consider placing a store directory, to position your staff member who welcomes the shopper to the store, to display a preview of products you’re featuring, or to have whatever else it is you’d like the customer to see right away.
     People who make a habit of shopping with you are familiar with the store layout, so they’re not depending on seeing a store directory. And your experienced shoppers might miss not being greeted the moment they enter, but they’re coming back to shop again because they already feel welcome, and they probably have figured out where to go to return an item. So it’s okay if they wait for their greeting until they see a salesperson.
     Does that mean you don’t need to notice where your repeat customers are looking as they enter your store? Well, no. Once you make your observations, you might decide to reconfigure the entry area. As soon as you do that, your long-term shoppers will become as bewildered as customers coming into your store for the first time. Know where all your customers are likely to look for guidance.
     Different types of shoppers in different sorts of retail stores have different habits. The shopper who comes to a familiar sporting goods store for one specific item will promptly start looking for information about how to get to that item. On the other hand, the husband and wife walking into a furniture store with the intent of setting up a bedroom, dining room, and family room, will be looking around in a number of different directions.
     This is why you’ll want to observe your particular shoppers and make store layout decisions based on your particular observations.
     Where they look might not be where you’d first predict. Watching those three-year-olds serves as a reminder of this. You might think they’d be looking at what’s a foot or two off the floor. In fact, though, any three-year-old worth his salt realizes the really interesting stuff requires looking up. Way up.

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Notice Where Your Shoppers Look as They Enter

(My thanks to Christine Mayall, owner of Book Shop Benicia in historic, artistic Benicia, California, for telling me the tale behind this posting.)

Wednesday, November 16, 2011

Crack Ecommerce Brains for the Holidays

A recent Bloomberg Businessweek posting describes how the growth of ecommerce has turned Possibilities Shoppers into Mission Shoppers. The Mission Shoppers go right for a particular item and, if the value is acceptable, they want to buy the item as soon as possible. The other category loves to look through the possibilities. Even if they've specific items in mind, they enjoy digesting the alternatives, discovering and analyzing what’s new.
     Because consumers are now accustomed to learning all about the products, the alternatives, and the prices before entering the store, many more of them bullet in with a target in mind, and then leave without even as much as a ricochet toward impulse items.
     Since research indicates your Possibilities Shoppers average higher holiday cart totals than do your Mission Shoppers, use what we know about the ecommerce brain to shift the balance:
  • Help shoppers avoid unwanted crowds. Many people find enjoyment in the busy bustle of holiday shopping. The ecommerce brain—especially the female ecommerce brain—finds that being with others who are in a holiday mood gives a sense of community energy. But although these women love the bustle, they hate to be jostled. It’s the unwanted crowds which make the shopper choose to run home to the computer to finish the purchases. In your bricks-and-mortar store, establish operating hours that spread out any crowds. Up the merchandise density for the holidays, but reserve enough spaces—such as pristine restrooms—to which shoppers can retreat from crowds for a few minutes.
  • Integrate the e. Teen clothing retailer Pacific Sunwear of California outfits their salespeople with mobile devices so that the Mission Shopper for a single item can promptly be shown the possibilities for creating a whole outfit around the item. Brookside is using Wi-Fi and iPads to demonstrate toy helicopters controlled with mobile applications, merchandise even ripe technophobes with raw fingertips may not have previously considered as holiday gift possibilities.
  • Let customers thank you. Customers wish to deal with retailers who help them out, and one way customers express this wish is to say thanks to store staff. Research findings from Università Commerciale Luigi Bocconi and another set from University of Maryland and Yale University together suggest that giving the customer an opportunity to express gratitude to staff facilitates loyalty to the retailer. This seems to become more important during the holiday season because of the spirit of giving.
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Have Shoppers On a Mission Look at Possibilities
Appeal to Holiday Shoppers’ Ecommerce Brains

Tuesday, November 15, 2011

Selectively Neglect

It was in a 1911 story, Gertrude the Governess, that Canadian humorist Stephen Leacock, wrote, “Lord Ronald said nothing; he flung himself from the room, flung himself upon his horse, and rode madly off in all directions.” It is a line that has been quoted, misquoted, and misattributed since then.
     Riding madly off in all directions at once is a risk for a retailer when the challenges keep flying at you. You might fling yourself into trying to take care of everything.
     Keep your focus. The successful retailer engages in skillful selective neglect. Actually, you can do it all. The problem is you can’t do it all at the same time. And the fact is that you won’t really want to do it all at any time.
     There are very many ways to improve your profitability as a retailer. You almost certainly don’t have the resources to implement them all at the same time. And recognize that more is not always better.
  • Researchers at University of Mannheim in Germany and University of Texas-Austin found that customers who are adequately satisfied are willing to pay higher prices than are customers who are barely satisfied. But the researchers also found that developing customer willingness to pay even higher prices generally requires ensuring those customers are consistently very highly satisfied. The costs of doing this might make it unprofitable. If so, why not be satisfied with adequate customer satisfaction?
  • Researchers at Duke University and University of California-Berkeley find that advertising a warranty today has no effect on consumer perceptions of retailer and product quality unless both retailer reputation and manufacturer reputation are in other ways flawlessly positive. So until you’re confident that your shoppers absolutely revere your reputation, why advertise warranties?
     Prioritize. Keep your eye on many important tasks at once. But allow some tasks to be in your peripheral vision. The central focus should be on tactics and measures that, if they fall too far short, substantially impact your profitability.
     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 in order for them to be able to move on to the next tasks to be accomplished.
     With the many unknowns facing the small to midsize retail business, assiduously avoid riding off in all directions at once.

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

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Selectively Neglect Interactive Marketing
Implement Tactics Strategically

Monday, November 14, 2011

Guard Against Trade Name Dilution

Retailers such as Burger King, JCPenny, and US Bank. Retailer groups like the National Restaurant Association and U.S. Chamber of Commerce. Altogether, 40 businesses and 47 associations are fighting a proposal to dramatically expand the nature of internet Top Level Domain names. TLDs are what appear to the right of the dot, such as .com, .net, .biz, and .org.
     The proposal, from the Internet Corporation for Assigned Names and Numbers (ICANN), would allow almost any word to be reserved as a TLD. The problem for retailers is that they’d need to buy countless numbers of internet domains and stay alert to requests to create new TLDs, all this in order to protect against the power of the retailer’s business name being diluted. For small to midsize retailers, that would be a great burden.
     U.S. federal law protects against trademark dilution. The Trademark Dilution Revision Act of 2006, which amended prior legislation going back to 1946, allows for legal action when there is a likelihood of dilution, not just proven dilution. This is good, but if the domain name expansion caused such troubles, the retailer would be required to launch a lawsuit. Again, this is a significant burden for small to midsize retailers.
     Researchers at Rutgers University, California State University-Long Beach, and Ohio State University demonstrated the reality of dilution. They measured the proportion of study participants who think exclusively of one brand’s products when asked about a given brand name. They found that a single exposure to a logo similar to the logo for the given brand name, but for a different business, diluted exclusivity by about 35%.
     An antidote to trade name dilution is to maintain the strength of the association between your store name and your store image. To accomplish this, market in all the channels the shopper uses when engaging in searches that could end up with purchases from you. Researchers at University of Texas-Austin and University of Southern California name these:
  • Personal contacts. When people visit your store, be sure they’re exposed to the name in signage, shopping bags, what salespersons are saying, and more.
  • Non-internet advertising. Use a full range of channels and have the store name in distinctive fonts and in a memorable logo design.
  • Interpersonal contacts. Beyond social media are the face-to-face interactions your satisfied customers have with other consumers. Give to those customers business cards with the store name in prominence.
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Sound On When the Purchase is Completed
Shrink Brand Alliances When They Contaminate

Sunday, November 13, 2011

Build Trust Before Asking for Information

In a survey conducted last month by loyalty program consultants LoyaltyOne, the majority of the 2,000 U.S. and Canadian respondents said they feel businesses are using personal information collected about them in order to better serve customers. However, that majority was only 52%, and 88% said they feel businesses are using the personal information primarily for the businesses’ own benefit.
     Serving customers better is certainly to the benefit of the business, so the answers are compatible. The difference between the 52% and the 88% does indicate consumers should be given reasons to tell about themselves.
     Businesses are aware of consumers’ concerns. Although it seems every shopper would welcome personalization, privacy worries are a barrier. Last year, the Ponemon Institute, which conducts independent research on consumer trust, said that over 95% of the companies they surveyed reported not fully exploiting the potential of personalizing because the companies feared customer pushback against the data collection required.
     Research findings from Quinnipiac University in Connecticut and Providence College in Rhode Island indicate that a retailer such as you should state to customers what information you’d like to gather about them, how you’ll be using the information to make their individual shopping experiences more efficient and fruitful, and how you will safeguard the security of that information.
     The LoyaltyOne survey asked about possible benefits which might be offered to the shopper who is deciding whether to share information:
  • Tailor special offers based on what the customer buys. In the survey, 49% of respondents said they would expect businesses to do this.
  • Give advance information on new products and/or services which would be attractive to the customer. About 41% said they’d expect this.
  • Modify the merchandise mix in the store based on what the store learns about the customer. The figure for this was 36%.
  • Grant preferential treatment because of the willingness to share the information. For this one, too, the figure was 36%.
     (These figures add to more than 100% because each survey respondent could select more than one.)
     For each of these your store does, the consumer builds trust that sharing the information makes a difference, and so the consumer becomes more willing to share additional information about himself.
     If you encounter resistances, pull back on all you’re asking for. Start out modestly. Also see what you can obtain by looking at records of prior purchases to honor individual customers’ likes and dislikes.

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Personalize by Respecting Privacy Concerns

Saturday, November 12, 2011

Lob Lots Over the Net with Funny Earlobes

How about this for a silly waste of research money? Three professors and a doctoral researcher found that work teams have a 20% advantage in performance outcomes when led by someone whose earlobes don’t match perfectly.
     The researchers—from Aston University, University of Lancaster, and University of Birmingham, all in the UK—even spent time developing an explanation for their finding. The explanation begins with musings on why the finding runs counter to what we might expect: We are genetically programmed to like left-right symmetry in people’s physical appearance. Evolutionary biologists say it’s because an irregular body on the outside can signal abnormal chromosomes inside. In most cultures and organizations, the symmetrical are more likely to be selected as leaders.
     Then the explanation for the research finding takes an twist: To succeed, those without symmetrical features must develop skills in persuasion, and this means recognizing others’ needs and appealing to others’ emotions. That’s why the teams led by those with mismatched ear lengths, wrist widths, and finger lengths were more productive.
     The lesson for retailers? Even if you and your staff are paragons of balanced left-right beauty, you’ll lob more balls over the net profit benchmarks when you show empathy as you coach employee teams.
  • Privacy. There are circumstances where it’s helpful to have other employees overhear the coaching of a single employee. Better yet is coaching a group of staff at one time. The ongoing feedback and coaching you give to staff can be done on the store floor, although not in front of customers. Still, when it comes to formal performance appraisal, meet in a private setting with expectations of confidentiality.
  • Calm, concerned demeanor. Use a normal voice volume, pitch, and pace. Because there might be strong emotions, you’ll want to listen to yourself as you talk and stay aware of your posture and gestures. It can be difficult to tell an employee about areas in which they need to make improvements in order to meet expected standards.
  • Accurate accounts of cause and effect. Give examples of situations in which you saw the employee perform. Say what you saw and heard the employee do or fail to do. It is important to then explain what the consequences were for the success of your store. New staff often don’t know this. Long-term staff too often forget it. And the rest of your staff will benefit from being reminded.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Manage Staff Performance with Respect
Fix the Problem, Not the Blame
Emphasize Empathy in Providing Services
Show Complainers Respect, Concern, & Empathy

Friday, November 11, 2011

Complicate Life Decisions for the Concerned

The retailer’s edge comes from knowing when to make exceptions to the more general rules of shopper psychology. One example has to do with the degree of complication of decisions for the consumer.
     In general, we want to simplify choices. Consumers like to take mental shortcuts. We attract shoppers by advertising a good abundance of alternatives, but move the prospect toward purchase by offering tools the shopper can use to deftly filter the choices.
     Yet researchers at University of Pennsylvania and Columbia University found circumstances in which retailers do well to complicate choice. These arise with purchase decisions the consumer considers as having potentially life-changing consequences and the alternatives are quite clear-cut. Some of these situations, such as buying a house, extend over time. Others, such as selecting funeral arrangements, could last no more than a day or two.
     These types of decisions have to do with people’s careers, homes, caretakers, and life partners. Because of the significance of such choices, the person believes they should be devoting more time and mental effort when the process seems at first impression to be an easy decision.
     Here, rather than helping the consumer find shortcuts, we should tolerate the mechanisms the consumer is using to add complexity. The Pennsylvania/Columbia researchers identified these three as the most common ones:
  • She focuses on the choice that does seem clearly best, but then exaggerates the importance of what are actually insignificant disadvantages of that choice.
  • He changes the criteria for decision making he had previously decided to use so that the decision making has to start over.
  • She keeps the same criteria, but agonizes over the relative weighting.
     In such circumstances, inexperienced retailers could find themselves feeling frustrated by the indecision and then reacting to the frustration by pressuring the shopper or by reassuring the shopper that the decision really is an easy one. A better alternative is to acknowledge to the shopper the significance of the decision and reflect, without criticism, on the convolution the shopper has introduced. You’ll be complicating, rather than simplifying, the life decision in order to help the consumer satisfy a decision making need.
     “Decisions like this are very important, so I fully understand your exploring all sides. You’re starting the decision making process again so you can look at each part in detail. That will take time and mental energy you want to put into this task.”

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Let Shoppers Go Through Their Rituals
Comfort the Confused

Thursday, November 10, 2011

Manage by Wandering Around Aimfully

Kevin Peters described how, after taking over as Office Depot president for North America, he learned a great deal by walking outside and through 70 Office Depot stores in about 15 states. The way in which he meandered could be coined “management by wandering around,” a phrase credited to another Mr. Peters, that one being Tom Peters, author of the classic In Search of Excellence. But since I’m thinking about Mr. Kevin Peters now, I’ll put mention of Mr. Tom Peters aside.
     Mr. Kevin Peters began by pulling into the store parking lot to watch customers walking into and out of the store. He was struck by the number who walked out carrying no merchandise. He’d then go into the store to watch customer traffic flow, listen to interactions among customers and employees, and decide how to turn his observations into plans for action.
     The wandering around was not aimless, but instead with targeted aim: He was gathering data to use to improve the store operations.
     Considering the thinking patterns of retail store owners/operators, store employees, and shoppers, here are tips on making MBWA meaningful:
  • Relax yourself before starting. Open up your mind. You’re gathering information. Only afterwards will you analyze it. Understand before you critique. Go one better on Mr. Peters by separating the decision making steps.
  • Relax your staff. Mr. Peters used a “secret shopper” approach, not telling the employees he’d be coming by. That would be impractical for most owner/operators of small to midsize businesses, unless they happened to have bought up astoundingly good disguises at a Halloween closeout sale. An alternative is to let your staff know how you regularly walk around to learn. Then at a separate time, give feedback on what you saw and heard and what you plan to do with the information. Incorporate your employees in the self-improvement.
  • When starting MBWA, go to areas you’re unaccustomed to visiting. Stay relaxed enough to break old habits. If you restrict yourself to your usual comfort zones, you’ll miss out on seeing all your store’s strengths and shortfalls.
     A warning: Be ready for “wandering around aimfully” to become “wandering around painfully.” Mr. Peters tells of coming across a store employee leaning up against a façade outside the Office Depot store, smoking a cigarette while shoppers were walking out of the store carrying nothing.
     It turned out that employee was the store manager. Not a promising sign for the future of Office Depot.

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

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Embrace Your Key Performance Indicators
Bind Yourself to Your Plan

Wednesday, November 9, 2011

Transition As Entire Cultures Transition

What’s been called the Arab Spring exemplifies revolutionary changes in entire cultures. Retailers doing business in these cultures benefit from insights about how the people—especially the adolescents and the family caretakers—transition into new consumer preferences. The adolescents are important because they are ready to push for the new and progressive. The family caretakers are important because they tend to champion the traditional ways in transitioning societies.
     Researchers from Laval University in Canada and University of Sousse in Tunisia began by identifying adolescent girls—future family caretakers—who could be classified as either progressive or conservative. Then the researchers aimed to find what factors caused the girls to hook meanings to product and store brand names.
     Here’s what they found:
  • The progressive girls formed brand images most directly based upon their self-esteem. The implication for retailers is to appeal to what the shopper believes will make her feel better about herself. Because what we think of ourselves is determined in part by what others think of us, this also was a factor. However, it was an indirect effect, much weaker than the self-esteem. The progressive girls are relatively independent.
  • The conservative girls were directly influenced by what psychologists call “self-monitoring.” This refers to the personality type which pays close attention to what others think of the person. (Yes, “high self-monitoring” does seem a strange name for the trait of paying more attention to others’ views than to one’s self views, but we psychologists need to maintain a certain amount of confusion in order to seem necessary.) With conservative girls, the retailer does best to appeal to whatever the shopper believes will help them fit in well. The conservative girls tune into trends in a transitioning culture to decide what they need to hold out against. But they also trace the paths of change in order to decide when to make monumental instead of incremental changes in order to maintain social acceptability.
     A fine example of the unexpected forms rebellion might take comes from researchers at Bilkent University in Ankara, who investigated why an increasing number of Turkish women were insisting on wearing veils in a secular country where the practice is banned in public buildings.
     The answer? Rebellion. Although the veil is generally seen by Westerners as repressive, many Turkish women adopted it in part as a sign of deviance from the values of their mothers and peers.

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Sell to People Who Want to Rebel

Tuesday, November 8, 2011

Dissolve Disgruntlement Before Goodbye

When a research study assesses the behavior of one million consumers, you’d better pay attention to the conclusions.
     Researchers at Tel Aviv University and at Arison School of Business note the power of neighbors in influencing people to shop at a particular store or buy a particular product at the store. A network of positive reviews increases the likelihood of adoption by about 80%.
     What about the flip side? How influential are social networks when a neighbor stops buying at a business? The researchers analyzed the effects using data from one million customers and former customers.
     Their findings? Again, the 80% effect. When a consumer’s neighbors defect, the odds of the consumer also defecting go up by an average of about 80%. As you might expect, the effect is greater when consumers view the neighbors as being like themselves, and it’s less when the consumers find that their own experiences contradict the experiences of the neighbors.
     The lesson is to help each customer recall their positive experiences with you. This applies not only to the customers who have loyalty to you, but also to the customers who are defecting. Sometimes you’re no longer able to adequately satisfy a customer who’s been frequenting your store. It’s time for a breakup. When this happens, the emotions probably won’t be nearly as intense as in the breakup of a relationship with a lover or the termination of an employment relationship with one of your staff. Still, there will indeed be emotions, and unless you handle matters properly, those emotions might result in consequences harmful to your business.
     Those emotions often include shame and insecurity, according to researchers at University of Western Ontario and Queens University in Kingston, Ontario. The consequences, the researchers found, spring from this ashamed, insecure former customer deciding to hurt the business by spreading as much negative word-of-mouth as possible. The root of it all is the customer’s belief that the retailer has betrayed the customer’s trust in them. The loss for the retailer is from the customers’ future purchases, but potentially much more than that, from others who are influenced by the negative reviews.
     Keep the relationship alive. Make the last memory that person has of your store one of gracious respect. After they get away long enough to relax their shame and insecurity and to correct their belief that you’ve betrayed their trust, they might come back.

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Break Up with Customers Graciously

Monday, November 7, 2011

Steam On Through to Success

According to fable, when Robert Fulton first demonstrated his steamboat, a man standing on the banks kept yelling loudly, “He won’t be able to start ’er.” Then as the steamboat did move with increasing certainty, the heckler stood silent, a shocked look on his face. Moments later, though, he yelled again. “He won’t be able to stop ’er.”
     This anecdote came to my mind as I was going over notes about retailer profitability initiatives I’ve been implementing. In collaboration with merchants in a specific neighborhood, the Small Business Development Center serving that area, and a grant maker, I coordinate initiatives based on my “Profitability Tactics for Small Retailers.”
     Producing the best results from these projects involves more than training and consulting. Direction comes from focus groups, surveys, and other assessments of the retailing neighborhood’s strengths, challenges, and opportunities.
     Often, what makes the difference between a successful initiative and a less successful one is the ability of the neighboring retailers to collaborate. And it takes no more than one heckler to hijack the collaboration. The heckler asks perfectly reasonable questions about the profitability tactics, questions which stimulate thinking by the others. So far, quite good.
     But then there is no end to the probes and the doubts. Soon, the heckler is not moving the discussion forward, but instead freezing it in place. A voice of caution becomes a force of obstruction.
     When this happens, the organizational dynamics don’t stop there. Merchants are, after all, action-oriented. In the retailer profitability initiatives I’m coordinating, I’ve seen how others in the group meetings react to the heckler’s obstructionism by lurching forward prematurely, pushing for action without full consideration of what the retailers will be getting themselves into.
     Early versions of Robert Fulton and Robert R. Livingston’s steamboat did have difficulty progressing up the river because the designers had not sufficiently accounted for resistance from the water. During an August 8, 1803 trial, the boat sank. Even at its best four years later in New York State, steamboat travel was deliberate, but slow.
     In your own retailer profitability initiatives involving collaboration among merchants or among your own store’s team members, steam on through to success. Think deliberatively.
     Also keep in mind that if you waste enough time looking in unnecessary detail, you can always find something to complain about. You won’t be able to start ’er or stop ’er in highly profitable ways.

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Be Creative, But Only Sometimes
Hobnob with Your Neighborhood Retailers
Form Retailer Groups for Practices Recognition

Sunday, November 6, 2011

Protect Customers Against Price Decreases

KTRK-TV Action13 in Houston, Texas reported last week on low-price guarantees. They say that a handful of retailers will price match for about one to four weeks after purchase: If you find a lower price under equivalent conditions, return to the store for a credit.
     Because Walmart is such a major player in retailing, note that company’s current promotion when deciding if and how you’ll offer a low-price guarantee. Up through Christmas Day, Walmart purchases are accompanied by a promise that if purchasers find any of the items being sold cheaper at any store, including Walmart itself, they can claim a Walmart gift card for the difference.
     Also take note of the catalog of exceptions Walmart sets on the promise: Black Friday ads, offers with gift cards, limited time or limited quantity offers, fall décor items, food and grocery items, internet pricing, and more.
     If you choose not to have a low-price guarantee, you might answer customer questions about Walmart’s offer by pointing out how many transaction types are not covered. You could also point out that the customer must spend time and money returning to Walmart to have the guarantee honored and would not get a cash refund.
     On the other hand, if you do, as a small to midsize retailer, decide to offer a low-price guarantee, researchers at Wayne State University and Babson College recommend you attend to how you present the promise. It’s best done as protection for the purchaser: “Our store wants to protect you against the risks of prices going lower after your purchase.”
     This is better than a small to midsize retailer presenting the low price guarantee as a promise the store holds itself out as a low-cost leader. The Wayne State/Babson researchers found that this second alternative resulted in more post-purchase regret than the protection alternative whenever the customer did find a lower price elsewhere. This was true even after the difference-in-price was delivered. The “I was protected” consumers feel a promise has been honored. The “I came across a better price” consumers feel a trust has been violated.
     Along with this, researchers at Wayne State University, Baylor University, University of Mersin (Turkey), and University of New Mexico found that with items distinctive to your store, low-price guarantees result in more customer satisfaction after a purchase, whereas with commodity items, the guarantee could encourage your regular customers to start exploring your competition.

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Guarantee with Care
Use Low-Price Guarantees Strategically
Impassion Your Shoppers

Saturday, November 5, 2011

Demand to Know Characteristics of Bias

You make your way into the local tavern, where the barkeep serves you up a provocative offer: If you participate in a taste test of the beer on tap, you won’t have to pay anything for the beer.
     You agree, so you’re given two small mugs of beer and asked to announce which one you like better. What you’re not told is that both mugs were filled from the same Samuel Adams tap. The only difference is that one of the mugs has a few drops of balsamic vinegar added.
     When this actual study was done, about 60% of the participants said they preferred the beer which, unbeknownst to them, had the added vinegar. Why? Perhaps because the beer drinker was intrigued by the unusual flavor. Give them a large mug and they wouldn’t like it. In a small mug, the novelty hasn’t yet worn off.
     Now we’ll change the scenario: When you’re invited to participate in the taste test, you’re told the mug to your left contains Sam Adams while the other contains Sam Adams plus a little balsamic vinegar.
     What percentage of participants said they preferred the doctored brew?
     It turned out to be about 35%. Much less than 60%, but still much more than nobody. The explanation for the findings gets more complicated. It has to do with what psychologists call “demand characteristics.”
     Demand characteristics occur when participants in a study or shoppers in a store believe they’ve figured out what the experimenter or the retailer wants them to do and then mold their behavior to fit. Classic research at Northwestern University found that when the consumer believes they’ve been treated nicely, most will want to help the other person prove a point. With the beer experiment, the tasters figured they were being offered the strange-testing beverage because the experimenter wanted to prove it tasted better. And the tasters were getting the beer for free.
     Why the drop in percentage when the people knew one of the mugs had vinegar added? Because some tasters become sourpusses about vinegar in a Sam Adams, even if it’s free beer. Others will still go along with it.
     When you have contradictory outcomes after using a profitability tactic, analyze the demand characteristics in the situation. Are some customers trying to meet your expectations, while others are trying to do the opposite of what they think you expect them to do?

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Go for Customer Gratitude and Guilt

Friday, November 4, 2011

Let Lonely Consumers Know They Belong

Even with the current abundance of internet-based social media, and perhaps because of internet-based social media, more American consumers say they’re socially isolated than the percentage of consumers saying this twenty years ago.
     That’s the report from researchers at University of Iowa, Stanford University, and University of British Columbia. Their research also provides guidance for selling to the lonely: These shoppers are drawn to products which, like the shopper, are yearning to belong. More specifically, consumers who are lonely are highly interested in products endorsed by a vocal minority of other consumers. At the start of the purchase process, they’ll want to look at the product choice praised by 20% of consumers before looking at the choice praised by 80% of consumers.
     Certain shopper populations are particularly likely to be feeling lonely. Senior citizens, for instance. In selling to any consumer you sense is feeling lonely, start out by talking about a product or service a discerning minority has found appealing. This will create a motivation to buy.
     However, once the shopper has expressed interest in the class of product you’re selling, switch to inviting that shopper to consider the majority-endorsed product. The Iowa/Stanford/British Columbia researchers found that when lonely customers went public with their own choices, such as would happen in telling the salesperson what they decided to buy, they wanted to be seen as considering the popular alternative. This is true even if they end up selecting the lonely minority-endorsed item.
     In other studies, consumer behavior experts from Arizona State University and Erasmus University in the Netherlands conclude that when people are feeling lonely, they become interested in items which remind them of their personal history in years gone by. This included preferences regarding automobiles, food brands, TV shows, movies, and even shower soap.
     At another point in the research, people who had been dropped from a game were offered a cookie carrying a brand name popular in the person’s past. Those who ate the treat ended up complaining less of loneliness than they did before.
     Of course, talking with a lonely person is a straightforward way of helping them know they belong—in your store shopping. Arizona State University and Texas Christian University researchers identified a passion evidenced by lonely consumers to visit stores where staff greet shoppers by name. We love to hear others say our name, as long as it’s said to welcome us.

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Suggest Nostalgic Items to Lonely Shoppers
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Thursday, November 3, 2011

Hook Going Green to the Excitement of Nature

Consumer behavior researchers are finding that while people say they want to protect the environment by purchasing less wasteful alternatives, they quite often devise many reasons not to do so.
     According to researchers at Suffolk University in the U.S. and York University in Canada, consumers use three sorts of justifications to indulge in purchasing wasteful products while saying they object to waste.
     Here are my adaptations of those three to incorporate other research findings:
  • Finances. “Especially now, when money is so tight, I want to get the most for what funds I have. If a product is manufactured or packaged in a way that produces waste, but gives me more value for my money, I deserve to be able to purchase it.”
  • Institutional dependency. “The government and the industry leaders should be setting the standards that will minimize waste. If I go it alone, my individual actions won’t make any noticeable difference. In addition, if I reduce waste, but others don’t, that’s unfair to me.” Researchers at University of Kentucky found that Swedish consumers went a step beyond this to say that if they alone aimed to reduce waste, this would challenge the expectations of conformity important in their culture.
  • Cynicism. “To succeed in the competitive marketplace, every business has to engage in wasteful practices at least occasionally.”
     An Entrepreneur blog posting includes an example of the price of misunderstanding this contradiction: The initial marketing thrust for luxury resort Bardessono, located in Northern California, was to broadcast the platinum environmental credentials. But consumers seeking luxury understood the word “green” here to mean sparse and uncomfortable. As a result, it was the hotel bookings that turned out to be sparse, and this made the owners highly uncomfortable.
     Now the Bardessono website gives equal billing to the Leed Platinum environmental award and the Travelers’ Choice “Top 10 Relaxation/Spa Hotels in the World” honors. The visuals on the website highlight bike trails, bountiful gardens, and rippling water.
     In your retailing, stay green in environmental awareness, but hook it to natural. For contemporary consumers, natural is more attractive than is artificial. Perhaps that preference resides within our DNA, so basic is it in the choices our shoppers make. It’s why green product packaging and store décor have a special appeal to our shoppers. Show consumers from throughout the world green product packaging and you'll probably hear descriptions like new, organic, healthy, and refreshing.

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See Through Anti-Waste Consumers
Excite Consumers with Nature

Wednesday, November 2, 2011

Dog Each Track for Pet Food Profits

Sales of items for household pets outpace sales in other retailing sectors. What can you do to profit from this? Almost any retailer can add at least a limited line for pets. Harley-Davidson, Ralph Lauren, IKEA, and Lands’ End have all done it.
     Notice the trend toward the upscale and claims of health benefits. It’s not just that suppliers of small pet items include high-fashion brands like Gucci, but also that consumers are willing to pay for merchandise and services they believe enhance the health of their animal companions.
     Survey researchers at Eastern Washington University found that about 80% of dog owners said they were serious about selecting healthy food for their dogs, but only 65% of the same people said they were this serious with their own food selection. Findings from an ethnographic study at University of Utah attributed trends like these to us considering our pets to be more defenseless than ourselves.
     It’s in our human nature to nurture. So as the percentage of families with children decreases, the drive to own a pet increases. Some of the decrease comes from people staying single longer, some comes from empty nesters living longer, and some from other sources. Researchers at American Demographic report that 92% of owners of dogs and cats consider them to be members of the family. If it won’t work for you to allow the pet to join the shoppers in your store, feature pictures of pets with their people.
     But do be aware that there are limits to how cute your regular customers will let you get. And some are likely to consider your store to be foolish for catering at all to health-oriented pet items. Dog owners are more nurturing of their pets than cat owners are of theirs. The psychology of the cat owner, along with the feline itself, is one of greater independence. And one aquarium owner wrote sarcastically, in a comment to a Boston Globe article about the health trend, “I feed my goldfish organic, wild caught (not farmed) fish food. I am hoping they live 7 months instead of 6.”

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

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Go Upscale for the Pet Market
Have Products & Services to Pamper Pets

Tuesday, November 1, 2011

Hand Shoppers An Aid to Imagining Usage

When using comparative advertising, we prefer not to have the shopper imagine using the product. Visualizing takes mental energy away from intellectually analyzing the comparison, thereby making the comparative ad less effective.
     However, in other sorts of advertising, we’d like the consumer to imagine usage, since this increases the probability of purchase. Research findings scheduled for publication in next April’s Journal of Consumer Research provide a simple suggestion for increasing the ease with which people can engage in this mental imagery: Show the product oriented toward the person’s dominant hand. Since most people are right-handed, this would mean an orientation toward the right in most cases. The advice influences not only pictures in ads, but also displays in stores and demonstrations by salespeople.
     The researchers, from Brigham Young University and University of Michigan, prepared for their study by creating ads which oriented to the right or the left parts of the illustration most directly related to usage. This included handles on mugs and the placement of forks and spoons. When the orientation was to the right for a product people otherwise liked, the motivation to possess the product became even greater.
     Notice that this means the more effective ad is showing a mirror image of the setup for a right-handed person to use the product. The consumer is looking at the ad, so what would be closest to the consumer’s right hand will have been to the left of a person whose image faces us in the ad. Again, because most people are right-handed, a natural tendency would be to orient photo setups the other way around. The research findings indicate this detracts from the motivational power of the ad.
     For an appreciation of how this applies to in-store demonstrations of a product, you need only think of how confusing it can be when the dance teacher or exercise coach faces you in teaching a new move. The instructor might turn her back to you for the demonstration so that when she lifts her right arm, you know to lift your right arm, not your left arm. If facing you, the instructor does best to lift her left arm while giving you verbal instructions to lift your right arm.
     When you or your salesperson faces the customer while demonstrating usage of a product with the intent of having the shopper imagine usage, left becomes right while right becomes left.

Click below for more:
Help Shoppers Use Their Imagination
In Comparative Ads, Don't Show Users
Relax Caution About Comparative Imagining