Monday, April 30, 2012

Take Hats Off to Innovative Marketing

When Abbie Dwelle, Wendy Hawkins, Olivia Griffin, and Kirsten Hove purchased Paul’s Hat Works in San Francisco, the four females began referring to themselves as the “Four Pauls.” A Retail Customer Experience posting reported that the four also came up with innovative guerilla marketing techniques—low cost, locally-based, attention-getting.
     Paul’s Hat Works custom-crafted men’s hats at prices ranging from around $250 to more than $850. Although the shop headed up the San Francisco hat trade since 1918, the purchase by the Four Pauls in 2009 coincided with blockbuster interest in the TV series “Mad Men,” about an era in which businessmen wore hats.
     Building on this interest, Paul’s Hat Works set up the front windows of the store to reflect scenes from the 1950’s and 1960’s. They then invited visitors to try on a hat and sit in the window for a bit. The Four Pauls sent out press releases, posted the invite on the store’s blog, and had updates on their Facebook page. Soon word-of-mouth took hold. In the end, there were too many volunteers for sitting than store hours allowed. Sales increased by about 10%.
     Then President Obama was featured in the San Francisco Chronicle Style section wearing a Paul’s Hat Works chapeau designed specifically for him. The sponsor was local author Robert Mailer Anderson, a regular customer of the shop, according to the Chronicle article.
     But for such a celebrity endorsement to have maximum influence, it needs to make sense to prospective shoppers that the celebrity is endorsing and why. After all, President Obama hadn’t ordered the hat. Fortunately for Paul’s Hat Works, Mr. Anderson says he extracted from the president a quote that in wearing the black-beaver-fur-felt fedora with a vintage grosgrain band in grey when going out on a date night with wife Michelle, “In a hat like this, I could get lucky.”
     With her excellent guerilla marketing sense, Ms. Griffin, one of the Four Pauls, added the angle of benefit to society by saying, “It would be great to have a president support the hat industry. It would create jobs.”
     It was nearly a century ago that Coco Chanel began building a retailing fortune by designing and selling hats while fashioning an elaborate biography for herself to better publicize her wares. Hats off to the tradition of innovative guerilla marketing!

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

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Mind Your Windows
Select Celebrity Endorsers Who Have Credibility

Sunday, April 29, 2012

Soothe Rejection with Chances to Contribute

Social rejection motivates people to buy.
     Participants in a study at Tilburg University in the Netherlands, Florida State University, Southern Utah University, University of British Columbia, and University of Minnesota were placed in pairs. Then one of the pair would resign from the team. In some cases, the remaining partner was led to believe this happened because the departing teammate disliked their partner. In these cases, the remaining partner became more likely to buy relatively useless products and spend premium amounts on foods they themselves disliked, but thought their partner would like.
     Here the social rejection was by an individual, not an entire group. Now, more recent research at University of Houston-Clear Lake and University of Texas-San Antonio also finds that when a group ignores a member, the member becomes motivated to engage in conspicuous consumption. Again, this could take the form of purchasing items they themselves find unattractive except for impressing others.
     But these researchers also say that social rejection by a group can motivate consumers to contribute. One set of study participants were made to feel actively excluded. For some, this was accomplished by asking the people to recall past experiences in which they’d been isolated by former colleagues. For the rest of these participants, the experimental manipulation consisted of the person being antagonized during online exchanges.
     The result was that these study participants became more interested in donating money to a worthy cause and volunteering their time to help out those who were less advantaged.
     The researchers explain this by distinguishing two types of social rejection—being ignored and being actively excluded. Consumers who are actively excluded are motivated to engage in prosocial actions, such as making contributions, because our psyches are designed to find charitable people to be interpersonally attractive. Those who are rejected yearn to get back in a group’s good graces.
     Because at retail you may no idea whether a rejected shopper has been actively excluded or only ignored, you can increase the potential for a sale by giving all shoppers an opportunity to make a charitable contribution as part of the sale.
     This can be especially useful with senior citizen shoppers, who are at enhanced risk of feeling rejected by younger family members. Researchers find that altruism is especially important to elderly consumers. Seniors like to give their business to retailers who are compassionate, and they like to view themselves as generous.

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Give Customers Assurance They Belong
Help Older Customers to Help Others 
Emphasize Emotions with Older Consumers

Saturday, April 28, 2012

Credit the Appeal of Cash

This week, Walmart.com launched their “Pay with Cash” program. “Pay with Cash” is designed for customers who lack a checking account and credit card, but want to take advantage of the broad item selection and ease of shopping online. The customer places an order via Walmart.com and pays with cash at a Walmart store within 48 hours, at which point the order is shipped.
     An opinion piece on the Forbes website ridicules the concept: If a shopper can’t get a credit card or a checking account, how would they ever have a computer? In my opinion, this opinion piece is what’s been called “marketing to the mirror.” For retailing success, we must broaden target markets beyond ourselves. The seed of “Pay with Cash” was Walmart’s epiphany that only 15% of transactions at the stores use some form of credit. The Walmart shoppers are needing to, or at least preferring to, pay with cash.
     And there’s PayNearMe. According to the Dow Jones & Company Inc. blog AllThingsD.com, Danny Shader, CEO of PayNearMe, introduces his company to potential investors by joking that they will probably never in their lives use the service. Those who do use the service place orders online and then can pay in cash at a 7-Eleven store.
     Mr. Shader goes on to say that estimates of the percentage of American households not having a bank account run as high as 24%. A target market for PayNearMe is teenagers too young to have their own credit. One of the first PayNearMe partnerships was with SteelSeries, a retailer of video gaming equipment.
     Last August, Walmart announced they’re expanding the list of checks they’ll cash. In addition to payroll and government-issued checks which have been accepted for some time, Walmart stores will now accept insurance, pension, and student loan checks. The goal is to encourage shoppers to feel more wealthy while in the store so they’ll spend more. Having cash in your pocket does that.
     Then for the holiday season, Walmart brought back layaway. Shoppers could put aside store merchandise and make cash payments on it until the full price has been met. Here, too, Walmart wasn’t alone. Other large retailers like Sears and Toys R Us and small retailers like the three Ritzy Ragz & Thingz stores in Northern California were among those laying away reservations about the technique.
     And giving full credit to the consumer appeal of cash.

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Broaden Target Markets Beyond Yourself
Inject Spending Power into Shoppers’ Pockets
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Friday, April 27, 2012

Raise Your Community’s Aspirations

Since forever, shopping has motivated people to reach for more in their lives, to set their aspirations a few notches higher. Consumers see merchandise and learn about services potentially available to them, then get energized to turn the potential into reality.
     It doesn’t always happen that way. Shopping also can frustrate and anger people when what they’re shown and told about seems too far beyond their realities. Researchers at University of Texas-Austin and Switzerland’s University of Bern found that consumers are more likely to form an emotional attachment to an item at retail if the consumers see the item as fitting their image of their current self rather than of the person they aspire to be. Shoppers hesitate stretching their aspirations out too far.
     This fact leads to two tips:
  • Feature items which, for your target customers, are out of grasp, but within reach.
  • Raise the self-esteem of your shoppers so that they feel ready to reach for the stars. 
     Doing that second one will increase your sales in the short-term. It also will help ensure longer-term sales by keeping your customers healthy. Recently published research from University of Chicago, Emory University, Johns Hopkins University, and University of Vermont supports a classic finding in psychology: Consumers with higher self-esteem fight off disease better than do others.
     Raise your community’s aspirations and your store sales by helping people feel great about themselves:
  • Flatter expertise. Researchers at Duke University saw that a motivator for many experts is showing off their knowledge. For the best long-term results, give genuine praise. But researchers at Hong Kong University of Science and Technology find that even insincere flattery can be effective.
  • Each time you personalize the selling message by referring to a characteristic of the shopper, you’re delivering a compliment. Even the smallest things can give you a retailer’s edge. For example, researchers at Universiteit Leuven in Belgium find that across languages and cultures, people’s self-esteem is heightened if their name is used.
  • When customers are completing their purchases, they are more interested in reassurance than in benefits statements. This is a prime opportunity for praise. Compliment them on the good decisions they made. Invite them to return to tell you how their purchases worked out for them.
  • Researchers at Virginia Tech, Babson College, and Florida Atlantic University found that improving the atmospherics in neighborhood retail stores tends to improve the self-esteem of the residents.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Convince Shoppers to Reach for the Stars 
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Thursday, April 26, 2012

Explore What’s Behind the Numbers

Deutsche Lufthansa has reported that their AG’s Frankfurt airline facility transported 110,000,000 animals during 2011. That’s actually more than the 106,000,000 people carried by all Lufthansa units.
     Does this mean the airline is primarily an animal freight company? Well, not really. You see, of the 110,000,000 animals, 80,000,000 were tropical fish. That still leaves dogs, cats, and race horses. Still, less than about 2% of Lufthansa’s total cargo revenue comes from transporting the creatures, and cargo revenue is but a part of the total. Lufthansa can safely say they are primarily a passenger airline.
      But can you safely say you understand what’s truly behind all the numbers you look at as key performance indicators (KPIs) for your business? Consider profit margin, for instance. An analysis by global management consulting firm Bain & Company notes how although Amazon’s five-year operating margin is only 4%, compared to an average of 6% for discount and department stores, the Amazon return on invested capital is more than double the average for bricks-and-mortar (B&M) retailers.
     To know what’s behind the numbers and set the right benchmarks, you’ll want to separate online from B&M figures.
     When analyzing financial indicators, slice and dice the numbers in different ways depending on your objective. For example, consider the size of your typical retail sale.
     Suppose it’s been a slow morning with only ten transactions. Two of those were for $100 and eight of them were for $5. The easiest way to calculate the average is to add up the total value and divide by the number of transactions. The total is $240, so the mean average for the ten transactions is $240 divided by ten, or $24. But $24 certainly isn’t the typical transaction. It’s $5, with two exceptions of $100 transactions.
     Instead of using only the mean, also look at the mode, the median, and the range. For the mode, group transaction amounts, such as everything from $10 to $19.99 into one bucket, everything from $20 to $29.99 into another bucket, and so on. Then see which bucket has the most entries. In my example, the mode is $0-$5.
     To get the median, line up the amounts from highest to lowest and then find the point where half the amounts are above it and half the amounts are below it.
     To get the range, look at the lowest and highest values.

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Wednesday, April 25, 2012

Lick ’Er Country-of-Origin Stereotypes

When your customer enters your store, she carries with her certain stereotypes about country-of-origin: Scotch whiskey is better than whiskey from India. Chocolates from Switzerland are superior to chocolates from China. Those are the sorts of findings from researchers at Babson College.
     How about putting the two of those together? What’s the perceived quality of chocolates from the country famed for Scotch malt whiskey? A recent article in The Economist says the perceived quality will be positive, and that it’s because of the luxury reputation of the liquor. Highland Chocolatier, a family-run artisan business in the village of Grandtully, Scotland, is experiencing massive production growth with retail sales of the products at upmarket department stores, restaurants, and hotels.
     This notion of quality by association also comes into play when we want to lick a consumer’s less positive country-of-origin stereotypes. Harvard University researchers give a couple of alcohol and sweets examples:
  • Don Melchor cabernet from winemaker Concha y Toro in Chile has received ratings equal to French Bordeaux wines from Wine Spectator, but is broadly perceived as not being world class. 
  • Chocolates El Rey in Venezuela sells cacao to candy makers in Switzerland and Belgium, but has difficulty selling its own chocolates to connoisseurs internationally. 
     Here are a few research-based tips on selling such products at retail:
  • Keep prices high enough. Research at Israel's INSEAD and at Stanford University confirms that when people buy products or services at what they consider to be deeply discounted prices, they tend to end up feeling that the benefits are less than if they'd paid full price. They love having gotten a discount, but they don't have as much love for the product or service. Consumer psychologists call this the price-quality link.
  • Flaunt the country of origin. Alongside the underappreciated product, have items carrying a sterling reputation which come from the same country. We can introduce the impression of quality to the shopper's brain indirectly or subconsciously. Ideas introduced this way have a special power. Because the perceptions arrive subconsciously, the person is less likely to mobilize reasons not to buy.
  • Downplay the country of origin. Harvard University researchers analyzed how Corona beer successfully accomplished this. Early on, Corona was nicknamed “Mexican lemonade,” and rumors circulated that workers urinated into the beer during the manufacturing process. Corona chose to position itself not so much as a Mexican beer as a beer of the beach. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Tuesday, April 24, 2012

Suggest Ways Shoppers Can Save Money

I’ve cancelled my service plan maintenance agreement with my HVAC (heating, ventilation, and air conditioning) company.
     I say “my HVAC company” because I, like most consumers, feel an extra commitment to a retailer when subscribing to a company service. Research at University of Pennsylvania and University of Southern California suggests that people agreeing to a flat-fee arrangement are even more likely to build commitment to the retailer and recommend the retailer to others if the customers are referred to as “members of the plan” rather than as “subscribers to the plan.”
     But I probably would have cancelled my enrollment and began to look for another vendor even if I’d been called a member. The problem was that I no longer felt the retailer was trying to save me money, and that was my motivation for enrolling in the first place.
     Some years ago, when I wanted a new HVAC system, this company had been praised to me by a good friend. The sales rep suggested a system adequate for my specifications after describing the alternatives and recommending against a more expensive system which he said was more than my house required.
     I was impressed with the company’s customer focus. When I received an e-mail encouraging me to enroll for the maintenance at a monthly fee, I did so promptly. About every six months, I got a call to schedule a visit, at no extra charge, to tune up the system. I liked the peace of mind. I could now think about things other than whether the system needed maintenance. Psychological inertia set in, as it will for any customers you have on a flat-fee or subscription arrangement.
     Then something changed for me during this last year. Each time, the serviceman finished by giving me a list of jobs that should be done at an additional cost. They seemed hungry for work. My trust faded fast.
     Still, I wanted to restore that trust. It was easier than having to find another HVAC company when I required service. So I telephoned the company and shared my impression that the list of recommendations was never-ending and that I was starting to doubt that they were motivated to save me money.
     Her reply: “Well, you don’t have to take the recommendations.”
     My suspicions were confirmed.
     If you want to keep the business of your consumers, let them know how assiduously you watch out for them.

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

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Weigh Flat-Fee Pricing 
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Monday, April 23, 2012

Examine the Magnitude of Differences

When you’re told that changing your way of doing business can make a difference in your business, ask how big a difference. After all, making changes consumes resources.
     I give you that advice after reading a recent report from social commerce consultants Bazaarvoice. The report supports some of what we expect: Women who buy in-store are happier with their purchases than are men who buy in-store. Men like buying online because they find in-store shopping to be a hassle and the liking of the experience spreads to liking the products more.
     The report also presents provocative tidbits:
  • Consumers ages 65+ have a stronger preference for products purchased online over products purchased in-store than do consumers ages 19-24. Retailers should welcome older shoppers to purchase online.
  • Asking purchasers to post online reviews of their experiences allows the retailer to continually improve. However, in-store purchasers receive an e-mail asking them to post a review only 45% of the time, while online purchasers receive such an e-mail 80% of the time. Still, in-store purchasers are just as likely to give feedback online as online purchasers. Retailers don’t need to depend on an e-mail if they ask in-store customers face-to-face and via signage to contribute reviews and suggestions.
  • About 70% of shoppers say they use smartphones while in the store. This suggests the in-store salespeople aren’t giving the shoppers enough of the right kinds of information.
     In my opinion, a difficulty with the Bazaarvoice report, however, is insufficient attention to the magnitude of differences:
  • Ceiling effect. Satisfaction scores can go only so high when you use a five-point scale. Although consumers ages 65+ reported a stronger preference for products purchased online over products purchased in-store, the difference is 4.34 versus 4.06. Both of these are more than 4.0, which indicates very good satisfaction. The corresponding figures for the respondents ages 19-24 were 4.48 versus 4.40.
  • Percentages without reason. A classic finding in consumer research is that percentages are easier than raw frequencies for a person to understand and remember. But that ease of comprehension sometimes masks the meaning of the raw numbers. The Bazaarvoice report says that iPad users spend nearly 16% more time on retail websites than do other tablet users and mobile users. But the difference is 5 minutes versus 4 minutes 19 seconds. Forty-one seconds is 16%, all right. Is that significant enough to guide a retailing strategy? Maybe not.
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Sunday, April 22, 2012

Celebrate Earth Day in Your Own Way

Each April 22 is Earth Day, the annual commitment to environmental protection. Earth Day was created by Gaylord Nelson, then a U.S. Senator from Wisconsin, in 1970 after he witnessed the ravages of the 1969 oil spill in Santa Barbara, California. The forces mobilized by that first Earth Day were behind the formation of the U.S. Environmental Protection Agency and the Clean Air, Clean Water, and Endangered Species Acts.
     My guess is that there are retailers who don’t celebrate those accomplishment of Earth Day, viewing them as excessive federal intrusions on the conduct of business. And as an article in the Los Angeles Times pointed out, Earth Day, with the undertone of conservation, doesn’t seem a good fit for promoting retail purchases as is done on Mother’s Day and Black Friday.
     Still, the Times goes on to list what a few retailers do to commemorate Earth Day in their own ways. Here’s my adaptation of the list:
  • The publicity and enthusiasm accompanying Earth Day can be used to add pizzazz to what would otherwise be a dull promotion. Some years ago, North Carolina retailers held a “Cash for Appliances” promotion funded by the state government. Purchases of qualifying energy-efficient refrigerators, freezers, clothes washers, and dishwashers got a 15% instant rebate. A prior event of this type had not pulled in much business. So for this one, the event was scheduled to start on Earth Day.
  • Retailers selling cosmetics from Origins Natural Resources are, with manufacturer sponsorship, accepting a bottle of a skincare product of another brand in exchange for an Origins organic product. To keep the offer even cleaner, bottles and packaging will be recycled.
  • Chipotle Mexican Grill has a real meal deal combo—you get a burrito and a lunch bag for the price of the lunch bag! Each lunch bag is made from recycled Chipotle billboard material.
  • Every Target store is giving away a reusable shopping tote to each customer who asks at the guest services desk.
     How you mark Earth Day should be compatible with the degree of environmentally-friendly practices throughout your business. Going green will lead to misunderstandings with your shoppers if they expect more than you're willing to do. This can produce anger instead of good will. People feel you're claiming credentials you don't deserve.
     Lay your plans to celebrate Earth Day, as well as every other day you are ready to do business, in your own way.

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

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Add Pizzazz to Dull Promotions
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Saturday, April 21, 2012

Turn Customer Habits Into Rituals

As the shopkeeper spots the ten-year-old boy coming in the door, he says to a customer, “I know this is the first time you’ve been in my store. I want you to see probably the dumbest kid you will ever see in your life.”
     While the customer watches, the shopkeeper opens the cash register, takes out some money, places a dollar bill in one open palm and two quarters in the other, and says to the kid, “Okay, which do you want?”
     The boy hesitates for a moment before pointing to the hand with the two quarters. The shopkeeper shakes his head, chuckles, hands him the coins, and returns the dollar bill to the register. The boy picks up items from the shelves, comes to the counter, plunks down the two quarters, and pulls more coins out of his pocket to pay for the rest that’s due.
     This entire episode without the kid saying one word. Nothing.
     The customer who’d watched all this is intrigued. She quickly makes her purchase and follows the boy out the door. When they’re both outside, she asks, “I’m wondering, why’d you choose two quarters instead of the dollar bill?”
     “The day I take the dollar, that’s the day I stop getting fifty cents every time I come by.”
     I’d say that kid was far from dumb. I’d also say the shopkeeper was on to something, too, even if not realizing it consciously. The boy had become a reliable repeat customer. A habit of coming into the store had been turned into the ritual of a game.
     Any retailer who opens the shop early in the morning and serves fresh-brewed coffee can change customers’ habits of dropping by into a ritual so embedded in the psyche that those customers won’t feel just right unless they’ve started the day at the shop.
     With any product line and at any time of day, think of the importance of rituals in building repeat business.
     As salespeople gain experience, they learn to engage with regular customers in going through rituals. And even if not engaging, at least staying out of the way of the rituals as much as possible. Consumer rituals are compelling because of being deep-seated in the personality. Many took form early in life as the child watched others shop and was coached by parents
     Don’t let yourself be exploited. But go along with useful rituals.

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Friday, April 20, 2012

Declare WAR on Customer Loyalty Measures

Customers who profess high satisfaction with your store, high loyalty to your business, and an interest in recommending you to friends will still go to other merchants. A major reason is that those customers may also be satisfied with and loyal to the others.
     Much of this is unavoidable. However, researchers at Ipsos Loyalty, Fordham University, and Vanderbilt University find that, with proper analyses, you can reduce the drift and significantly increase your share of your customers’ expenditures for the items you sell.
     The proper analyses involve what the researchers call your “Wallet Allocation Rule.” For the sake of brevity and to add dramatic appeal, I’ll call it the WAR score. And for the sake of reality, I’ll point out that if the calculation just below seems overly complex, adapt the procedure to what will reliably work for you.
     The distinctive addition in the WAR calculation is that you also ask your customers about where else they shop and their degree of satisfaction with each of the alternatives to shopping with you. You then look at where you rank compared to the others and plug the numbers into the WAR formula for each customer surveyed:
     To calculate your overall WAR score, average the results obtained from the customers surveyed. You can calculate the WAR score for each of the other stores in the same way.
     The WAR derives from the researchers’ tracking of the purchase habits of more than 17,000 consumers in nine countries. The correlation between the WAR score and the share of wallet was, on average, 0.9. This is extraordinarily high for any consumer behavior study. A perfect correlation is 1.0. The correlation between changes in the WAR score and changes in the share of wallet averaged 0.8. This shows that measures you take to improve your WAR score are likely to pay off well.
     The researchers suggest these steps to raise your WAR score if your rank is not Number 1:
  • First, ask your survey respondents what they specifically prefer about the others.
  • Turn this information into possible action steps for your business.
  • Estimate the costs of implementing each change and your best guess as to how much the implementation would increase your ranking for all customers.
  • Make the changes with the highest potential for profitability.
  • After you’ve given the changes sufficient time to make a difference, survey customers again.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Thursday, April 19, 2012

Transfer Technology to Retailing Adjacencies

“Technology transfer” means putting academic research findings to practical use. It’s my main objective with the RIMtailing blog, in the sense of using the results from consumer behavior studies to develop ways for retailers and other suppliers of products and services to improve their profitability.
     But the term “technology transfer” is often used in a somewhat different sense—to refer to discoveries and inventions in the physical sciences being transformed into innovations with commercial potential. Referring to this meaning of technology transfer, Nitin Nohria, as dean of Harvard Business School, wrote in Harvard Business Review, “Ultimately, the creation of jobs and wealth has more to do with harvesting the value of an innovation than with inventing it.”
     To do this, Dean Nohria advocated for attending to what business strategists call “adjacencies.” His major example, though, came not from the physical sciences, not from the realm of CPU chips and DNA mapping, but from an ancient invention: Yoga.
     What single company arguably harvested the largest creation of wealth from this ancient invention? Retailer Lululemon Athletica, purveyor of yoga clothing and accessories. Other adjacency providers of products and services include stores selling yoga DVDs, yoga retreat operators, incense producers, and physical therapists for yoga-related injuries. All these are adjacencies to the core invention of yoga and core commercial application—yoga instruction.
     As a retailer, you can count on upcoming opportunities to use transferred technology to increase sales of your current offerings:
  • The sensor that, when embedded in a point-of-sale location, analyzes each shopper’s facial structure, facial expressions, body size, posture, and movement paths. The promise is to determine the demographic breakout of those who show interest in a product and then track the degree of interest and the sequence of shopping steps for different demographic segments.
  • The kiosk which uses facial recognition technology to assess the shopper’s age and gender. Next, the consumer is invited to punch in information about planned meal times and swipe her frequent shopper card, which links to data about past food purchases. The kiosk then generates meal ideas. Want a sample of an item it suggests you buy? Poke the screen with a finger.
     Less esoteric and with greater profit potential are the upcoming possibilities you can be spotting for your core product and service offerings which are technology transfer adjacencies. For each electric vehicle, there’s a market for batteries and charging stations.

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

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Wednesday, April 18, 2012

Fire with Small Steps Before Aiming

Profitable retailers are action-oriented. They realize that in the fast-changing reality of retailing, those who stand still are sure to be left behind. Their operating principle is often “Ready. Fire. Aim.” Rather than “Ready. Aim. Fire.” They are “Give it a try and see what happens” people.
     Researchers working at Babson College, Innovation Associates, and The New York Times support this approach—but only for retailers who adhere to certain rules. Here’s my version of those rules, incorporating other research findings:
  • Act from purpose, not panic. “Don’t just stand there, do something” or some version of it has been shouted at one time or another by every manager throughout history. But there’s another side to it: “Don’t just do something, stand there,” has been publically proclaimed by a wide range of well-known individuals, from 1960’s radical Abbie Hoffman to U.S. President Ronald Reagan to the White Rabbit in the Disney version of “Alice in Wonderland.” In addition to freezing us into destructive inaction, panic can cause premature action. Instead of thinking through the alternatives and selecting the least bad choice, the retailer moves too soon.
  • Start with small steps. Use resources at hand or within easy reach before taking large steps which require stretching to acquire substantial new resources. Until you’ve achieved experience and momentum, aim for quick, inexpensive, incremental improvements rather than transformational change. One reason for this is that if you depend on many other people for project implementation, chances are some of those people will aim to impede your success. Those kinds of people lurk everywhere in the world of business.
  • Set safety limits. Clearly state how much you’re willing to lose before you’ll pull the plug on the initiative. Agree with yourself that you might change this limit, but require yourself to temporarily retreat from the project for a careful assessment before making any such change. Keep your promises to yourself and to others optimistic, while at the same time realistic.
  • Anticipate danger. As you’re moving along the open road, look straight ahead most of the time. However, also scan for risks approaching from unexpected directions and take evasive action.
  • Publicize achievements. These are opportunities to recruit additional resources along the way.
  • Satisfice. In the 1950s, psychologist/economist Herbert Simon coined that term to refer to his finding that successful people accept less-than-perfect alternatives so they can move on to the next ideas they want to implement.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Tuesday, April 17, 2012

Depend on the Kindness of Strangers

At the point in the play “A Streetcar Named Desire” when the character Blanche DuBois says, “Whoever you are, I have always depended on the kindness of strangers,” the character is portrayed as mentally ill. Results of a “Nielsen Global Trust in Advertising” survey indicate that it is the retailers who fail to depend on the good will of strangers who might be considered crazy.
     The survey polled more than 28,000 consumers in 56 countries. The results were statistically weighted to be representative of consumers who use the internet in each country.
     One major finding is that shoppers are more likely to trust the advice of strangers than ads sponsored by retailers or manufacturers. About 70% of respondents said they trust online consumer reviews posted by people they may not know personally. Four years previously, the percentage was about 55%, and the 70% figure is second only to the 92% who said they trust recommendations from friends and family.
     Only 47% said they trust paid ads, a decline from about 67% a few years previously. There is still some trust in online ads, but it’s declining and it’s notably less than the trust placed in the opinions of strangers.
     There were differences in results among areas of the world. For example, half the survey respondents in Africa, Pakistan, and the Middle East find TV ads to be personally relevant during product information searches, but only a third of European respondents had this trust in TV ads.
     Continue to inspire your satisfied customers to tell family and friends about their experiences. And don’t give up on advertising in traditional and newer media. However, also continue to encourage your customers to post and talk about your store to people they don’t know well.
     Aiming for referrals to weak connections spreads the good news about your store more widely. Weak links don’t substitute for strong ones; they augment them. It can be the difference between saying to customers, “Please recommend us to your friends,” and, “Please recommend us to your friends, and recommend those friends talk about us to their friends.”
     Encourage reviews which include both positives and negatives. These develop in prospective shoppers trust and curiosity which leads to the prospects wanting to check things out for themselves. Research at Rutgers University concluded that direct experience with the retailer affects how any negative information is interpreted.

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

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Inspire Customers to Post Repeatedly
Grab On with Weak Connections
Encourage Balanced Customer Reviews

Monday, April 16, 2012

Grin In Your Face

When you get in the shopper’s face, have a grin on your face.
     Forceful sales techniques—such as urging the consumer to take action—can make the sale. An advertising campaign designed by The Richards Group for The Scotts Company, manufacturer of yard care products, includes a TV ad which tells consumers to stop lollygagging and ends with the words, “Feed your lawn. FEED IT.” This in-your-face approach works, research suggests, because the verbal harassment is delivered by a whimsical character named Scott who has a whimsical Scottish accent.
     An online campaign designed by DDB Chicago and the Ad Council lets the consumer select the quality of the sales pitch by moving a slider among thirteen videos. The target audience consists of people without a high school diploma. The objective is to convince them to enroll in General Equivalency Degree (GED) classes. The in-your-face argument is made by comedian Jerry Stiller. Other videos include the milder “Convincing” by “The Sopranos” actress Jamie-Lynn Sigler and the “Fierce” by professional wrestler The Miz. The gentler of the thirteen videos feature straight talk, while the more forceful arguments come across with a grin. Each of the thirteen videos ends with the call to action, “Enter your ZIP Code above to find GED classes in your area.”
     The online campaign assumes that a consumer will select the video which is aggressive enough to persuade. The humor injected into the higher-octane versions makes this more likely.
     The grin must have an undertone of caring. We’re laughing with the shopper, not at the shopper. When Scott urges us to feed the lawn, he comes across as wanting us to have nice, happy grass. When the thirteen celebrities make the case for getting a GED, it’s with a tone of “We want what’s best for you.”
     In fact, if the seller’s caring and the buyer’s commitment are both sufficient, the grin might be inadvisable. Consider the athletic coach who’s motivating his team members to perform at their maximum. Getting in their faces with humorless yelling works because the athletes view this as helping them achieve the win. A grinning sales pitch wouldn’t carry the same influence. What would be viewed as harassment in other situations works here because it’s clear to all that the coach cares about the team, the team cares about prevailing, and in-your-face coaching is the social norm from Little League on up.

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Humor Your Customers
Analyze the Role the Customer Expects

Sunday, April 15, 2012

Switch Thinking About Switching Costs

We’d like to minimize costs to shoppers who want to switch from another store to shopping with you. We’d like to maximize costs to shoppers who want to switch from your store to another.
     That second one is more difficult to achieve with your customers who shop at your online store than with those who shop only at your bricks-and-mortar (B&M) store. Researchers at Yonsei University in Korea and Shri Shankaracarya Institute of Technology and Management in India note the ease of comparison shopping on the internet. If your customer finds a better online deal at another merchant, he might drag his B&M business to that merchant, too. The ecommerce brain homes in on information filtering shortcuts, and a nice shortcut is to deal with fewer merchants.
     Yes, there are individual differences in ecommerce brains. Some differences are related to age. Younger consumers’ brains are more likely than older consumers’ to enjoy multitasking and so are more likely to stay with your B&M operations even if changing their online supplier.
     For all your customers, and especially for those of older ages, recognize questions related to switching costs:
  • “How difficult will it be for me to master skills necessary to carry out the new behavior?”
  • “If I’m to shop at another store instead of yours, what time will I spend deciding how to fit that into my schedule?”
  • “What social costs would I need to pay? If the other store doesn’t carry the prestige of your shopping place, will I want to hide from my friends what I‘m doing?”
     The Korea/India research findings about switching costs support something called “status quo bias theory,” which says that there are many levers to motivate people to say with their current behavior. Here are some relevant to store patronage:
  • Risk avoidance. Staying with the familiar carries known disadvantages. Switching to something different chances unknown disadvantages.
  • Responsibility for change. If making the change impacts others, the consumer might be held accountable when anything goes wrong. Blame is less likely if staying with the status quo causes problems, as long as there’s been a history of good outcomes.
  • Saving mental energy. There are many important choices to be made every day. Devote thinking to those choices and put off thoughts of changing retailers for now.
     Switch your shoppers’ thinking, and your own thinking, about switching costs in order to achieve what is best all around.

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Minimize Switching Costs
Design Store Operations for Ecommerce Brains

Saturday, April 14, 2012

Label Freebies as Samples

Used properly, free samples build future sales of a product. Here are four shopper psychology tips based on academic research and in-store experiences:
  • Sampling is especially useful when the product is a new way of satisfying a routine need and the experience of using the product is difficult to describe or demonstrate. An example is Pretzel Crisps, a flat pretzel cracker.
  • Make the sampling itself a special event. Put the sampling station in a well-lit, interesting area of your store where a number of people can gather at the same time. We want shoppers to be attracted by seeing others sampling and then not feel crowded when doing the sampling. We want the shoppers to hang around long enough to get their questions answered by friendly staff who are handing out the samples.
  • Make it easy to buy the product by having the merchandise for purchase adjacent to the sampling station.
  • Sampling a satisfying product at no cost builds the sort of gratitude which can result in the consumer buying not only more of the sampled product at the full price, but also other products from the merchant.
     At the same time, other research findings underline the importance of presenting the free product clearly as a sample. In consumer behavior studies conducted at University of California-Berkeley, University of Southern California, Stony Book University, and Indiana University, researchers found that if a product is offered for free, the shopper becomes less likely to buy the product at full price afterwards. What happens is that when getting it at no charge, consumers conclude consciously or subconsciously that the product must be low quality. This is a terrible first impression to leave with the consumer about a new product. It also makes you look bad for giving what appears to be a low-quality gift.
     The way to avoid this problem, some of the researchers discovered, was to tell the shopper in signage, advertising, and salesperson-customer conversation that the free item is being offered as a sample because you believe the shopper will enjoy the product and want to buy it in the future.
     The free product should be prominently labeled as a sample, and it's best if the free item is in a size smaller than any of the standard sizes offered for sale.

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

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Give Free Samples of New Products
Ask Customers Where They Get Pre-Purchase Info
Stage Special Events to Build Sales

Friday, April 13, 2012

Slice Off Consumers’ Small-Penis Syndrome

What does penis size have to do with successful retailing?
     I’ll start with the research findings from Royal Hallemshire Hospital, Sheffield, and St James’s Hospital, Leeds, that about 45% of men risk “small-penis syndrome” (SPS). They wish for a more generous endowment. Yes, 45%. Perhaps a long-term opportunity for retailers wanting to stretch their service offerings.
     But I digress.
     How do men handle this concern? For an extended time now, consumer researchers with a psychoanalytic bent have said straight on that the men buy big gas-guzzler cars and large-screen televisions.
     Except they’re buying smaller and smaller computerized devices. What gives?
     Researchers at HEC-Paris and Northwestern University have pulled out the answer: When the large size of a product or package implies power, consumers craving more power go for the large. A set of study participants were offered a choice of different-sized bagel pieces. Those participants who felt powerless chose bigger pieces.
     With men, it might have to do with SPS. But the findings were pretty much the same across genders.
     Since they’d worked with bagels, the HEC/Northwestern researchers applied their findings to addressing the ways in which Americans are supersizing their meals and themselves. But in a recent MediaPost article, one of the researchers, Derek D. Rucker, says that the principles apply to a broad array of products. And that brings us to the puzzle of the computerized devices: When small size implies status, consumers who want more status will forgo the large.
     In another study, participants were offered four sizes of hor d’oeuvres. Some of the people were told that the largest ones had recently been served at a White House event. Others were told that the White House event featured the small hor d’oeuvres.
     The status of being a White House appetizer outflanked the importance of size.
     In all this, there are other factors, to be sure. With most product lines, the larger alternative costs more. That gas-guzzler commands a premium for the initial purchase and to keep the tank topped off. People who get the large vehicle project power because of their willingness to spend big. And smaller items which do the job are generally more desired because of convenience, even if the items don’t convey status.
     The relevance of the research findings to successful retailing is in questioning the notion that consumers universally select larger items in order to compensate for insecurity. Often they don’t.

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Label as Small to Increase Trial
Offer Aspirational Shoppers Subtle Signals
Shoe Things for Higher Sales Revenues

Thursday, April 12, 2012

Evaluate the Viability of Brand Extensions

TWICE reports online that Sears Holdings wants to license the Kenmore, Craftsman, and Diehard brand names to manufacturers as part of the company’s financial recovery plan. Flashlight and battery maker Dorcy has already signed on to use Diehard for some of their products.
     When deciding whether to include such brand names in your store’s limited shelf space, you’re walking into the well-worn consumer psychology research area of brand extensions. A general finding is that the extension should fit with the image of the brand personality. Nike probably would do better with treadmills than with cosmetics.
     It appears that Sears won’t place limits on how the brand names are used, so there might be instances of poor fit which you wouldn’t want to include. In their look at the issue of poor fit, researchers at Rutgers University, California State University-Long Beach, and Ohio State University uncovered the existence of Kodak pianos and Buick aspirin as misappropriated brand names.
     Findings from Georgetown University and Chile’s Universidad Adolfo IbaƱez indicate you should look at how well-known the brand names of the competition are. They give the fictitious example of Sony binoculars. With this product line, the prototype brands are Tasco and Bushnell, but those two brand names are much less well-known than the Sony name. Therefore, Sony might succeed here. However, if Sony decided to introduce a line of scanners, they’d be going up against prototype brands like HP and Epson, which are very well-known. Sony’s potential for success would not be as good.
     With a questionable-fit brand extension, evaluate both the amount and the nature of advertising support.
     Researchers at Purdue University, Indiana University, and University of Connecticut find that comparative advertising is particularly powerful. But what comparison type is used makes a difference: With the disinfectant wipe product category as an example, for follow-on entrants, such as those from Lysol and Mr. Clean, the comparison should be made to the pioneer product—in this case, Clorox disinfectant wipes—rather than to the parent brand—Lysol cleanser, for instance.
     For a pioneer entrant, comparison advertising is still great, but at introduction, the comparison should be made not to other ways of accomplishing the same function—in this case, disinfecting surfaces—but rather to the existing products that carry that brand name—Clorox bleach, for instance. The objective with the pioneer entrant is to show a favorable comparison to parent brand items.

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Display Unfamiliar Brands with Prototype Brands
Compare Unknown Brand Extensions

Wednesday, April 11, 2012

Connect Shoppers to Their Future Selves

Since you plan to be in business well into the future, you’ve an interest in your shoppers appreciating the longer-term benefits of their purchases. The challenge, say researchers at Columbia University and University of Chicago, is that shoppers may have trouble connecting to their future selves.
     Researchers at University of South Carolina agree. They offered a movie pass to theatre patrons one summer. For about half the patrons, getting the movie pass required completing a survey, which took about seven minutes. So that the researchers could compare time with money, a matching set of patrons were offered the movie pass for $3—no survey completion required.
     About half the tickets in each group were marked for use later that summer. The others were marked for use the following fall.
     For those who spent the $3, the percentage of fall ticket usage was the same as that for the summer tickets. People put out the money, and they were going to get their money’s worth. But among the patrons who earned their ticket by spending seven minutes of time, the season of usage made a big difference. People were significantly more likely to end up using the ticket if marked for the summer than if marked for the fall.
     When it comes to time, benchmarks like a change in the season go into defining benefits and value. Money spent in the summer can be redeemed for a reward in the fall, but time spent in the summer tends to lose value as the calendar rolls over to the next season.
     The Columbia/Chicago research findings indicate that a shopper’s connection to a future self can be strengthened by a retailer. In one study, graduating seniors were assigned to read a narrative in either of two versions. The first version described a graduating senior whose identity had been quite fully formed by the college experience. The second version portrayed the senior in the narrative as likely to undergo major changes in identity as a result of graduating.
     Those reading the first version were more likely to choose high-value gift certificates good after one year than did those reading the second version, who were more likely to choose lower-value gift certificates usable immediately.
     Talk with your shoppers about how what they will be in the future is largely shaped by what they are now. This will help them connect with their future selves.

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Clock Customer Actions to Fit Time Metaphors
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Tuesday, April 10, 2012

Show Them What They’ll Never See Again

Announce to your target audience an item you’re selling is a limited edition, and sales can blossom. It’s true with artwork and, it appears, with encyclopedias.
     When Encyclopaedia Britannica, Inc. announced the end of the print edition, the average 60 orders per week promptly grew to 1,050. What had become a marginal part of the business because of the move to digital versions of the product became a prominent profit center. Briefly.
     The publisher attributed the sales boost to nostalgia. That could very well be a motivator. Nostalgia does sell merchandise, although it usually kicks in when a product has been gone for a while and then comes back. Maybe a number of consumers who remember looking at the print edition in the past had forgotten their affection for the Encyclopedia Britannica as a crib sheet when writing term papers. Maybe they’d forgotten the print edition still existed. Suddenly, with the discontinuation announcement, the memories flowed back and people decided to make a buy.
     In my opinion, a more likely motivation for shoppers was the last chance to see. “Last Chance to See” is the title of a popular BBC documentary series and a book. Douglas Adams and Mark Carwardine tell listeners and readers about their travels to see the mountain gorilla and northern white rhino in Zaire, the Amazonian manatee in Brazil, and the kakapo in New Zealand. Animals in danger of becoming extinct.
     For you to turn “last chance to see” into a successful selling technique, the item or experience must be attractive to shoppers even when not on the brink of extinction. In addition, as Encyclopaedia Britannica, Inc. and the BBC did, you need to remind people it’s the end of the road.
     Researchers at University of Chicago applied this to tourism. A survey of people who’d moved away from the Windy City found that visits to tourist attractions, such as Chicago’s Millennium Park, were clustered toward the very end of residency, perhaps in the midst of packing up. Other surveys had found that tourists visiting a city for three weeks saw more of the major attractions than residents of three or more years.
     The Chicago researchers suggest tourism retailers sell to locals the idea of a “staycation,” such as a gift certificate for specific dates to visit the nearby attractions. The marketing hook is “Now’s the time to see.”

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

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Keep Up-to-Date with Nostalgia Appeals
Authenticate Subtly
Sweeten Scarcity with Ample Warning
Offer Scam-Free Scarcity

Monday, April 9, 2012

Cultivate Positive Moods for Risk Assessment

When shoppers read or hear about possible adverse consequences of using a product, they’ll overestimate the likelihood of the consequences. If the label says “it happens rarely,” they’ll be thinking, “it happens often enough to make a difference.”
     Researchers at Indiana University and Ball State University found that if the shopper is in a positive mood, the understanding of risk is more accurate. There’s a weighing of probability, severity, and tradeoffs. When it’s to the benefit of your customer and you to have a nuanced assessment of risks, cultivate a positive mood.
     Still, psychologists at Carnegie Mellon University, Columbia University, and University of Chicago who study real-world decision making point out that when it comes to assessing risks, consumers think in terms of possibilities—“How can I make this happen?” “How can I keep this from happening?”—more often than in terms of probabilities—“How likely is it that this will happen?” “How much would it cost me to make what I want twice as likely to happen?” “How much to make what I don’t want half as likely?”
     People pay much more than justified by the odds in order to gamble on a lotto ticket. “You can’t win if you don’t play!” and “Somebody has to win!” become rationales for spending money to turn a zero possibility of gain into a very small, but better-than-zero, chance. People pay for an extended services contract on an appliance even when the probability is that the cost of repair or replacement would be less than the cost of the ESC.
     A marketing researcher at University of Texas-Austin and forensic researcher at Northwestern University asked study participants to say which of two automobiles they’d prefer. The only difference between the two cars was in the performance of the airbag in the car. Car 1 had an airbag that was more likely to save a life than was the airbag in Car 2. However, the airbag in Car 1 also had a small, but measurable, chance of causing death because of the force necessary to deploy the bag. The airbag in Car 2 had such a tiny probability of this happening that it wasn’t even measurable.
     In the study, more of the participants chose Car 2 than chose Car 1. They were placing greater importance on possibilities than on probabilities. The researchers called this the “betrayal effect.” Car 1 might betray their trust.

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Reduce Unwanted Risks for Your Shoppers
Profit from Shoppers’ Positive Moods
Emphasize Possibilities, Not Probabilities
Betray the Betrayal Effect
Present Warranties as Insurance, not Assurance

Sunday, April 8, 2012

Mobilize Collective Efficacy for Health

Why are communities with an abundance of vibrant small to midsize retail businesses more likely to have healthier residents than those without such an abundance?
     Researchers at Louisiana State University and Baylor University began their exploration by recognizing an argument could be made in a different direction: Some say it is large companies, such as Big Box retail outlets, which would be associated with higher quality community health. These large retailers would be more likely than small retailers to provide health care insurance, and health care coverage is often considered the single most significant determinant of community health.
     But when the Louisiana/Baylor researchers analyzed data from 3,060 counties in the contiguous United States, they found that small businesses contributed in powerful ways other than funding trips to a doctor. A thriving community of merchants serves both as a cause and an indicator of investment in the neighborhood.
  • More interest in disease and injury prevention. There’s a greater push for recreational facilities, health education, workplace safety, anti-smoking legislation, and buying at local farmers’ markets.
  • Sustained support for health care access. There were more bond issues for health infrastructure, such as community hospitals, and drives to recruit physicians and other health care professionals.
  • Lower rates of death, obesity, and diabetes.
     The underlying factor is “collective efficacy.” Researchers at University of Bristol found that the sorts of trust and cooperation seen among locally-based retailers generate a sense of ability to accomplish great things. There’s also a component of competition. The merchants in the community want to prevail over the merchants in other communities, and, the research finds, local business leaders compete for influence and recognition among themselves. This competitive attitude energizes greater accomplishment.
     Successful small businesses are owned and operated by people with an entrepreneurial spirit. The psychology of the entrepreneur features self-development. You’re responsible for yourself. “If it is to be, it is up to me.” Take care of yourself, your family, your customers, and your customers’ families.
     Because collective efficacy is a state of mind, the benefits include mental health as well as physical health.
     Note that these research findings do not say that a community with an abundance of large retailers is less healthy than one without. The community of merchants which thrives will have a blend of different-sized retail businesses, all of them working toward mutual success and, by doing so, toward the health of the neighborhood.

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

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Perpetuate the Health Momentum
Unchain for Health
Subscribe to Community Supported Retailing
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Saturday, April 7, 2012

Appreciate the Effects of Falsehoods

Researchers at University of Sydney persuaded consumers to lie by offering them rewards. The objective of the study was to discover the subsequent influence on the consumers’ ratings of services. The finding was that lying for a reward causes more extreme ratings. Liars who would otherwise have been quite satisfied with service delivery are instead highly satisfied.
     We might attribute this to guilt: The consumer who has lied is motivated to make up for the sin by being nice to others, and so exaggerates the degree of satisfaction. But this explanation doesn’t work on the other end: Liars who would otherwise have been somewhat dissatisfied with service delivery are instead highly dissatisfied.
     The researchers’ explanation is a bit convoluted: For most consumers, telling a falsehood takes cognitive effort. Philosophers have said, in varied ways, that a liar needs to exercise a good memory. Because of the mental fatigue, the liars don’t closely track the progress of service delivery and are therefore more surprised than are truth tellers by the outcome. The surprise accounts for the stronger emotional reaction.
     How does this apply to your retail operations? The answer has to do with rewards which shoppers believe they get for lying.
  • They think that lavishing unjustified praise on a service provider will encourage the provider to give better service
  • They assume that making a big fuss of complaints will extort the service provider into granting favors
  • They want to return a purchased item, but can do so only by fibbing about the reason
     If you spot and then allow the lie, appreciate how the liking or disliking of subsequent evaluations of services you provide will be exaggerated.
     If you choose to discourage such lying, here are three techniques:
  • Have the customer seated while you’re standing. Raise your head slightly and extend your arms so your body occupies more space than usual. Columbia University researchers found that this makes it more difficult for a shopper to lie to you.
  • Ask brief questions that require the shopper to tell events in an order different from the usual one. Researchers at University of Portsmouth in the UK and University of Gothenburg in Sweden found that asking people to tell a confabulated story, but with the events in reverse order, made the liar’s nervousness obvious.
  • Eyeball the eyes. Liars shift their gaze rapidly or will fix their gaze on something aside from your face.
Click below for more:
Lie in Wait for Lying Shoppers
Facilitate Customer Truth-Telling

Friday, April 6, 2012

Imply Exclusivity Using Processing Difficulty

When shoppers are evaluating an item for sale, they associate ease of understanding with familiarity, and familiarity stimulates liking. Therefore, it would seem we’d always want our advertisements and sales presentations to be easy to understand. In ads, use high contrast. In sales presentations, make your points succinctly.
     However, maintaining a retailer’s edge requires mastery of the exceptions to the general rules. Regarding easy understanding, researchers at University of Maryland, University of Chicago, and Yale University make a case for processing difficulty sometimes implying that an item is exclusive, and therefore of higher quality. This is most likely, the researchers say, with special occasion gifts which the consumer doesn’t purchase regularly.
     Consumer behavior findings about gifts do often differ from findings about other purchases. For example, findings from Stanford University, University of California-Berkeley, and University of Chicago suggest that when a gift is expected, the givers who wait until the last minute get increasingly interested in avoiding pain. The result is that they’re willing to pay more for a gift and often more willing to upgrade to a fancier gift.
     And packaging counts with gifts, including a bit of difficulty in opening the present. Anthropologists at University of Florida observed how important admiring the gift wrapping and the unwrapping of the gift are as cultural rituals. Consider offering gift wrapping as a value-added service.
     The notion that processing difficulty can draw special attention is not new. Classic research by psychologist Edward Wheeler Scripture found that a bit of puzzlement in a headline—whether for a newspaper article or newspaper ad—increases interest in reading what follows. In an 1895 book, Dr. Scripture used his studies’ findings to suggest putting commercial notices upside down in order to attract the consumer’s close attention to the content, thereby increasing the likelihood of purchase.
     Still, it would be a cruel trick—and thoroughly bad business—to intentionally confuse that up-and-growing target market—elderly consumers. Safety might be at stake here. So to the degree that you have time, deliver the message in different ways. Tell the elderly customer the product usage instructions. Demonstrate your points with gestures or even a sample of usage. Then check for understanding by encouraging the customer to ask you questions. In doing this, be sure to respect the dignity of the customers. If they seem confused, let them know you and others in the store are available later.

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Transform Necessary Difficulty into Value
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Analyze Gifting to Develop Opportunities
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Thursday, April 5, 2012

Educate Staff to Educate Shoppers

What opportunities do you provide your sales staff to thoroughly learn about each of the products and services they are selling so they can later serve as expert endorsers of your store?
     To what degree do you take the recommendations of your staff—those who handle sales and those who handle returns—as to what products should be pruned out of your merchandise mix?
     The South Florida Sun-Sentinel reports that retailer Pet Supermarket can answer positively to both those questions. Almost every day, the Pet Supermarket president distributes to all sales employees literature about the products. And the retailer listens to the employees.
     The company competes for consumer dollars with Pet Smart and Petco, both much larger operations. An essential part of the Pet Supermarket success formula is to be sure all staff are educated both with product knowledge and with the skills to educate others. Those others include shoppers and fellow store staff. Plenty of people on a sales floor know the information, but many lack skills in teaching other adults.
     Staff your store with experts who enjoy sharing their knowledge with customers in a team-oriented way. Customers want sales staff who know it all, but without acting like stuffy know-it-alls. Retired journeyman plumbers make terrible hardware store employees if they have trouble explaining the steps to replace a faucet. Teens with a wonderful sense of fashion style are bad clothing department advisors if they label some teen customers as beyond fashion rescue.
     Your shoppers love being served by educated experts. As the salesperson asks questions and answers the customer’s questions, it gets clearer. Do your floor staff know where all the merchandise is located? Are they aware of the comparative features of brands in their department? Can they explain them to the customer if asked? Can they explain other things as well?
     An image of expertise can be built with an image of the employee: When we see a portrait-style photo of someone that’s posted in a public location, and then we meet the person face-to-face, we subconsciously grant that person additional credibility. You could benefit from this by including in your store advertising and as part of your internet presence photos of your employees or posting an 8 x 10 in the department where the employee spends most of their time.
     Customers don’t expect the salesperson to know everything. However they do expect the salesperson to get the answer when they don’t know and to do a personal handoff to another salesperson when necessary.

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

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Educate During Life Changes
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Have Staff Who Show and Share Expertise

Wednesday, April 4, 2012

Clean Up the Prospect’s Hassles

Massage professional Tobi Lessem, who does business in Northern California, comes to the client’s home with her equipment. This eliminates the hassle for the client of driving to the appointment and worse, needing to navigate through traffic to get back after the massage’s therapeutic relaxation.
     But Ms. Lessem’s service delivery method sometimes causes another hassle: Potential clients are ashamed to have a professional come into a messy home, and it would take an effort to clean up. The result? The prospect keeps putting off making the appointment.
     Ms. Lessem’s remedy? A package deal in which she’ll clean your place and then give you a professional massage. “You can feel the weight coming off their shoulders literally and figuratively,” she reports.
     Home improvement retailer B&Q in Sutton-in-Ashfield encountered a similar impediment to profitability and used a similar remedy: Research by the Behavioural Insights Team, UK Cabinet Office, had found that when prospects for installation of attic insulation thought about the need to clear out the loft in preparation, this thinking often was enough to give pause. Cleaning up was overwhelming, and so a cause for eternal delay. People weren’t taking the energy-saving route even though it would save them money and was subsidized by a UK government grant.
     So B&Q cleans up the hassle as part of the subsidized service. Their staff clear out the home owner’s belongings, give the owner the opportunity to decide what items to donate to a local charity or to discard to the trash bin, install the loft insulation, and then put back the remaining belongings. According to The Economist, the additional service resulted in a threefold increase in use of the installation program.
     Were prospects for Ms. Lessem’s massage services and the B&Q installation services aware from the start of the real reasons they were putting off the purchase? Until the offer was made explicitly, many probably didn’t make a clear connection. They were unlikely to say to the retailer, “Listen, if you throw in a cleanup service, you’ve got my business.” It took the retailer’s behavioral insight to achieve this profitability edge.
     Regularly think through what hassles may be getting in the way of more people using your services and purchasing your products. When you deliver to the customer’s home or business, the hassle could be cleaning a messy place. When the shoppers come to you, it could be a messy parking situation.

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

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Park Your Carcass to Learn a Lot

Tuesday, April 3, 2012

Redirect Customer Tempers

Some guy, energized by all the news of the weekend’s Mega Millions lottery, buys a two-buck ticket for a relatively minor-league twenty million dollar jackpot. And, against the odds, he wins.
     With great excitement, he rushes to the lottery office, ticket in hand. “I’m here for my twenty million dollars,” he says.
     “It doesn’t work like that,” is the reply. “If we verify your win, we’ll send you a check for one million dollars each year over the next twenty years.”
     The guy can barely control his rage. “Hey, I want my twenty million dollars. That’s what I heard promised. So I want all the winnings right now. And, look, if you can’t give me what I heard you promise me, then give me my two dollars back.”
     Customers can sometimes act in the spirit of that guy, letting their temper dictate disadvantageous actions. Handling an angry consumer requires finesse. The formula for action:
  • Let customers express anger in bursts of up to about thirty seconds. This gives you time to understand their points well enough to reply sensibly. Beyond about thirty seconds, people often get more and more wound up.
  • Listen attentively. At the onset, resist the urge to interrupt or even to decide what you’ll say. As you get closer to the thirty-second mark, decide what you’d like to reply.
  • Avoid interrupting the person in the middle of a sentence. Wait for him to take a breath and then begin to talk. Keep your voice decisive, but calm.
  • When the shopping experience itself has been responsible for the consumer’s anger, ask questions like, “What may I do to make things right?” Then decide what action is wisest and either do it or announce when you will do it.
  • If you conclude that the customer’s anger is not caused by experiences in your store, say something like, “I treasure our customers’ business, and I’m always looking for ways to improve. What suggestions do you have?”
     Next, efficiently redirect the discussion toward the positive. Findings from research at University of Maryland and Yale University indicate that too much talking will lock into the shopper's mind the bad feelings they're experiencing, and those negative memories make it less likely they'll buy from you in the future.
     On the other hand, when you redirect customers’ temper tantrums, odds are customers will feel indebted to you later, after good sense returns.

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

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Cool Down Customer Temper Tantrums
Protect Customers From Dangerous Decisions