Wednesday, October 31, 2012

Spark with Afternoon Delight Email

According to a GetResponse analysis of 21 million messages, you should send out your unsolicited marketing email when target recipients are looking at their inboxes but they’re not receiving much other email.
     Before dismissing this advice as no more than common sense, appreciate the details of the findings which will help you use them. About 24% of email opens occur within the first hour after delivery. With each hour that passes after delivery, the rate of opening of these unsolicited messages drops substantially. The rate of opening is about 10% during the second hour, 6% during the third hour, and 5% during the fourth hour.
     I believe there are two related explanations for this:
  • People generally start out looking at their most recent email and then work back until they run out of interest. The longer the time that goes by after you send your message, the greater the probability it’s buried out of reach. 
  • People treasure the latest information. Even if your recipient makes it to the day-old message, there’s a fair chance they’ll consider it less valuable. In the GetResponse analysis, the open rate for day-old unsolicited retail marketing messages was less than 1%. 
     The two-step process, then, is to as accurately as possible:
  • Discover on what days of the week or month and then at what times during these days your target recipients are likely to be looking at their email inboxes. 
  • Get on the mailing lists for other retailers who send email marketing to your target recipients so that you can plan to avoid the competition for the recipients’ attention. 
     …or, taking inspiration from lyrics to the pop classic “Afternoon Delight,” aim to “make the sparks ignite” by sending out your messages between noon and 6 PM. In the GetResponse analysis, this had the highest email open rate for a six-hour block, and the highest click-through rate was for the six-hour block following, 6 PM to midnight.
     Research suggests different schedule guidance when responding to inquiries: Do it as promptly as possible. InsideSales.com, Harvard University, and Korea’s Sungkyunkwan University researchers say retailers don’t respond quickly enough to inquiries. They looked at internet contacts which could turn into leads for B2C (business-to-consumer) and B2B (business-to-business) sales. They found that firms responding to inquiries within one hour were about sixty times as likely to move clearly toward a sale than those waiting a day or more.

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Tell Questioners Now When You’ll Answer

Tuesday, October 30, 2012

Be Sensitive to Who Gets Blamed for Damage

Hurricane Sandy changed the dynamics of the 2012 presidential election. The candidates curbed their campaign travel, and the storm put a crimp in both polling surveys and early voting.
     Plus findings published in the American Journal of Political Science indicate that voters will blame a president if weather disasters cause severe damage. This will be true even though voters realize these politicians have little control over the weather and even though the voters may share responsibility for the damage because they failed to heed warnings from government authorities. The 2006 Democratic takeover of the House and Senate were attributed in part to citizen disapproval of President Bush’s handling of Hurricane Katrina.
     The researchers, from Boston University and Carnegie Mellon University-Qatar, also say that when the president is seen as acting decisively to minimize deaths, injuries, and property damage from a hurricane, the president gains good will. The effect of this good will at least offsets the attribution of blame and, because it is based on logic, usually exceeds the power of the blame.
     The lesson from this for retailers comes when a product you sell or something your store does turns out to cause serious damage. The 2010 recall of hundreds of millions of eggs affected grocery stores, restaurants, and other sorts of retailers. The impetus for the recall was evidence eggs from certain sources had been contaminated with salmonella. One response from industry spokespersons was to say that people who had been poisoned had failed to cook their eggs thoroughly enough.
     Understandably, this led to criticisms of the industry for trying to avoid blame. But research at University of Florida indicates that when a retailer makes a major error, the public, after initial shock, becomes open to the idea other parties might share responsibility. Here are the types of explanations research indicates are most likely to lead to the public accepting that responsibility for damage is shared:
  • “There were circumstances we’d come across only very rarely, if at all, before. Now we’ve built in ways to spot those circumstances promptly.” 
  • “Here is the information we’d been given, and as you can see, it was misleading. Now we’ve developed ways to get more accurate information.” 
  • “Here are the legal requirements, regulations, or policies that required us to handle the situation as we did. Now we’re telling those who set these rules what happened and suggesting changes.” 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Assign Blame Accurately for Damage You Do

Monday, October 29, 2012

Think Through How to Wipe to the New

It’s once again time for my participation in the annual Bathroom Blogfest. Each blogger is to write from their interpretation of this year’s theme, “Still Climbing Out.” For me, the theme brings to mind change. How to gently and cleanly wipe shoppers and ourselves along.
     Such change can be a challenge with bathroom routines because many of those routines are firmly embedded in rituals consumers prefer not to reveal to retailers or discuss with friends.
     I’m thinking about what happened in 2001 when retailers started selling Cottonelle Fresh™ Rollwipes, called by the manufacturer Kimberly-Clark, the “First Major Toilet Paper Innovation in Over 100 Years.” These were pre-moistened wipes designed not to clog plumbing.
     Kimberly-Clark did much right in introducing the product:
  • Before developing the item, they inquired about the extent of Americans’ desire for moist toilet paper. They found that more than 60% of adult respondents said using a moist wipe is cleaner and more refreshing than using dry toilet paper. 
  • They sold the product in a dispenser which held both dry toilet paper and the moist wipes. The dispenser fit on standard toilet paper holders, and the moist wipes were held in a container which kept them from drying out quickly. 
     At product introduction, Kimberly-Clark estimated first-year retail sales in the U.S. would be $150 million, and could ultimately reach $500 million. Kimberly-Clark competitor Procter & Gamble was impressed. The company launched a parallel product, Charmin Fresh Mates.
     But retailers soon found that compared to projections, sales tanked, and then limped along. Why? In my opinion, Kimberly-Clark failed to recognize that Cottonelle Fresh Rollwipes were not a product innovation consumers would enthusiastically discuss with each other. You couldn’t expect widespread word-of-mouth recommendations. This wasn’t destined for social networking Followers and Likes.
     There were also other factors: Advertising needed to be tasteful so settled for slogans like “Sometimes wetter is better.” Kimberly-Clark didn’t give free samples at the start. The price point was high enough that those 60% who preferred moist toilet paper would be tempted to keep moistening the dry variety in the privacy of the bathroom.
     There may be good reason no major toilet paper innovation had come along in over 100 years.
     When you choose products which consume precious shelf space in your store, think through how well you’ll be able to make the case for purchase. Word-of-mouth, both face-to-face and via social networking, is essential.

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Climb Out of Mistaken Assumptions
Peek Into Bathroom Rituals

Sunday, October 28, 2012

Spy on Your Shoppers

A recent Adweek posting discussed how retailers are analyzing video recordings of customers in order to improve profitability. What patterns do people follow when moving through the store? How long do shoppers stay at various displays? Which products are most frequently handled, then not purchased? Are there spots where people are blocked by fixtures or other shoppers from grabbing items?
     Answers to all these questions can help build sales. The twist is that the retailers described in the Adweek posting are gathering their video data from security cameras. The ways in which this will improve profitability are in reducing theft as much as increasing revenues. Because the rationale for the recordings is security surveillance, says Adweek, the retailers don’t have to ask people in the store for permission.
     One trap in this arrangement is people feeling their privacy has been violated and concluding they’ve been exploited. Videos of them are analyzed for the retailer’s financial gain when there’s no reason to suspect the people are shoplifting.
     In the mid-1980’s as Intuit Inc. was first getting started in Palo Alto, California, company staff hung around local computer stores where Quicken was being sold. Whenever somebody would buy that flagship Intuit product, the Intuit staff member would ask the purchaser if staff could come watch what happens when the person installed the software on the home or office computer and began learning to use it. Intuit made full use of what they discovered. Quicken garnered a reputation as a user-friendly way to get boring bookkeeping out of the way.
     In this situation, the consumers knew they were being watched, and the observation occurred only if the consumer agreed to the intrusion on their privacy.
     Another trap in the video recording arrangement is what I call the “Big Data Dilemma.” It’s become awfully easy to gather stuff, but validly refining that abundance of stuff into actionable information consumes time and money.
     Making sense of what your store visitors do and say is important. Consumers often don’t know why they’re doing what they do, or they don’t want to tell you. An attractive alternative to the security cameras is to have your staff and you do the recording mentally and the data analysis on the fly. Watch and listen. Make notes on what you hear shoppers saying to the sales staff and to each other about your products, services, store appearance, and more. 

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Analyze What Your Shoppers Say and Do
Notice Where Your Shoppers Look as They Enter 
Follow Your Customers Home

Saturday, October 27, 2012

Distinguish Activity from Accomplishment

When I was in graduate school at Stanford, I suffered from SDS. The campus was riddled with the malady, so I figure I contracted it from other students.
     SDS is Stanford Duck Syndrome, described in a New Yorker essay as, “a well-known phenomenon” in which, “students seem cheerful, but all the while they are furiously paddling their legs to stay afloat.”
     Every fine university has its version of SDS. So does every successful retail store.
     The closest to a cure for SDS is to distinguish activity from accomplishment. The two are related, but they are not the same. Furious paddling might energize you and, through serendipity, bring success. However, you’re most likely to be propelled toward profitability when you’ve decided where you want to go and aim there. Moreover, excessive activity fatigues you.
     You’ll want key performance indicators to measure your progress along the way. Increased store footsteps can increase store revenues, so measure store footsteps. But don’t confuse store footsteps with store revenues. It’s helpful to stay busy in order to keep shelves fully faced, but not when that impedes you fully facing the shopper who’s just walked up with a question. A break from the activity allows for the important accomplishment.
     Sometimes you’ll bind yourself to your task. In The Odyssey, Ulysses avoids the temptation of the Sirens by having his crew bind him to the mast so that he won’t deviate from his intended route when he hears the Sirens’ calls. Beyond that, Ulysses orders his seamen to stuff their ears with wax, which they are to keep there until the craft had passed the Sirens’ island.
     Ensuring that our crew helps us stick to the plan is a good idea. Still, there’s a danger in preventing all our people and ourselves from sensing distractions which should legitimately lead to us deviating from our previous intentions. The life of a retailer is filled with the unpredictable.
     Successful retailers are optimistic and action-oriented. They realize that in the fast-changing reality of retailing, those who are inactive will surely be left behind. Yet you’ll want to tell activity toward accomplishment from activity out of panic. Are you in this for the long term? Then protect your business. If you ever feel yourself taking action out of panic, start singing Simon & Garfunkel's “The 59th Street Bridge Song (Feelin’ Groovy).” It starts off, “Slow down, you move too fast.”

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Bind Yourself to Your Plan 
Avoid Panic When Cash Flow Drops 
Focus for the Holidays

Friday, October 26, 2012

Solidify Consumers by Place or Lifestyle

When the target audience for your retail offerings feels they’re involved with a community, they’ll be more satisfied with their purchases from you.
     Researchers at University of Wyoming explored how this works with Community Supported Agriculture (CSA), a retail arrangement in which people pay a fixed fee in advance to have delivery of produce for a fixed time. Whistling Train Farm in Washington State’s Green River Valley has a CSA program in which 200 subscribers each paid $385 this year to receive a bag of fruits and vegetables each week for twenty weeks. Organic and local food website LocalHarvest says they know of more than 4,000 CSA farms in the U.S.
     The Wyoming researchers found that once a shopper contracted with a CSA program, the shopper usually became more satisfied with the produce than with similar produce bought at a store. The reason, say the researchers, is that, by paying in advance and viewing themselves as members of the CSA, they’ve a sense of community collaboration. The research findings indicate people are willing to pay more for merchandise of all sorts that bestows a feeling of community.
     One aspect of this I find important for retailers is that the CSA example applies to what we’d think of as commodity items. We accept that with status-oriented or unusual items, feeling like a member of the community of the distinctive is worth paying for. But in the Wyoming research, this also applied to items like spinach, carrots, chard, and onions. What gave these commodities distinction was the Community Supported Agriculture supplier.
     Community adds the benefits of solidarity, commitment, mutuality, and trust.
     The psychology of community can be analyzed from at least two angles:
  • Place. When sociologist C.J. Galpin at University of Wisconsin used the term “community” in the early 1900’s, he referred to the trade and service areas surrounding a central village. Today we can think of community as defined geographically. In doing so, recognize that hills, highways, and other barriers and conduits might cause a store thirty blocks away to be part of my community, but another store a single block away not to be. 
  • Lifestyle. We speak of the “gay community,” the “Hispanic community,” and the “teen community.” We might even speak of an “organic and local food community.” As with the geographically-defined communities, continually find ways to cultivate the benefits of solidarity, commitment, mutuality, and trust for consumers. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Subscribe to Community Supported Retailing 
Give Loyalty Program Members Prestige

Thursday, October 25, 2012

Discontinue Dichotomies If Continuums Fit

Boys and girls are naturally different, so retailers naturally think of merchandising stores to categorize what might appeal to one more than to the other. Yet it’s useful for the retailer to remember that even something as dichotomous as childhood gender often can best be merchandised to as a continuum.
     There is the small minority of boys—estimated at between 2% and 7%—who preferred dresses to pants when young. Among girls, researchers at Tel Aviv University found a continuum of doll preferences. Girls who preferred Bratz dolls to Barbie dolls scored on a sex role inventory as showing, in a number of ways, fewer tendencies traditionally considered feminine.
     These girls often said the reason they liked the Bratz dolls was the doll’s clothes. The clothes for Bratz dolls aren’t as frilly as those Barbie wears, and Ken could easily tell apart his main squeeze from the bald True Hope™ Bratz, sales of which benefit childhood cancer patients. Still, most human boys would prefer to play with toys other than either Barbie or Bratz.
     Moving on to adults, the variations in preferences within the population of women and within the population of men are, in most realms, more significant than the average differences overall between men and women. The biological imperatives distinguishing men from women take different forms depending on the situation. The lady trying out cosmetics wants some privacy. We design a little nook she can tuck herself into to hide from the competing females. The gentleman pulling the pricy cologne bottle off the shelf prefers to announce his acquisition to any woman in the vicinity. No nooks or crannies for him.
     Now let’s offer our pair a pedicure. We’ll want to arrange group seating for the woman. When she socializes, she’s happier, so she’ll come back to our shop soon. The gentleman? Give him privacy.
     Next, let’s move on to other dichotomies. For instance, shoppers on a mission versus shoppers seeking possibilities. Or consumers most interested in how to prevent losses versus those most interested in how to achieve gains.
     These differences are real, and there’s research evidence some of them are based in biological imperatives as firmly as is gender. Still, the dichotomies are creations for our convenience as retailing professionals. They’re helpful in our planning. Let’s never be imprisoned by them. Consumers, being people, are too complex to be dispatched to one of two buckets.

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

Click below for more: 
Overcome Gender Stereotypes 
Have Shoppers On a Mission Look at Possibilities 
Sell Either Protection or Promotion

Wednesday, October 24, 2012

Shoot for Fear If You Can Suit

Wouldn't you want to be in a business where customers are just begging to hand you money?
     This rhetorical question is in a recent Associated Press article. The questioner quoted is Bill Bernstein, owner of East Side Gun Shop in Nashville. Gun sales are near a twenty-year high, according to Forbes, even though America is already the world’s most heavily armed nation.
     The motivator is fear. Fear that Barack Obama—seen by the National Rifle Association as wanting to severely limit gun ownership—will be reelected. Fear of violence which followed last July’s movie theatre massacre in Aurora, Colorado and, less than a month later, the shootings at the Sikh Temple in Oak Creek, Wisconsin.
     Whether or not you sell firearms, you can profit by recognizing that in certain situations, you can make a sale more likely by arousing in the customer a sense of fear—fear about the consequences of not completing the purchase or not buying into the course of action you’re proposing.
     But unless the fear appeal is crafted well, it could end up doing damage to your business. With the gun shopper, you don’t need to increase fear, at least according to Bill Bernstein’s account. For other products and services, you’ll need to raise enough fear of a real danger to win the customer’s attention and motivate action. Do it only to the degree that you’ve a guaranteed way to substantially reduce the risk. Don’t oversell.
     Researchers at Auburn University find that if the fear becomes too intense or if shoppers don’t see a way out, the shoppers become defensive and start thinking about why they don’t need the item you’re wanting to sell them. Or if they do end up completing the purchase, chances are they’ll associate negative feelings with your store, making it less likely they’ll come back again.
     With items such as handguns, irritation with you also might arise because you can’t suit the shopper: The manufacturers aren’t keeping up with the demand. One of the largest, Sturm Ruger & Co., Inc., stopped taking orders for a couple of months earlier this year, and niche market supplier Dan Wesson Arms, Inc. has sold out its entire production schedule.
     You don’t want shoppers going somewhere else to get products they could purchase from you. If it’s accurate to say so, you could point out that they’ll likely have trouble finding the item anywhere.

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Craft Fear Appeals 
Turn Out-of-Stocks to Your Advantage

Tuesday, October 23, 2012

Design Your Store to Fit Time Intentions

A Huffington Post article speculated on how the interior design and décor of Chipotle Mexican Grill restaurants has inspired Chipotle’s fast-casual competitors:
  • Wendy’s is using hard wood surfaces and delicate metal poles in refurbished outlets 
  • Taco Bell’s new facades juxtapose wide panes of glass with slabs of dark concrete 
  • A Burger King prototype restaurant incorporates metallic finishes 
     Chipotle itself is pushing onwards. The latest shops have concrete floors and perforated plywood wall coverings.
     Being minimalist without making patrons feel like deprived Spartans is an art. The novelty in these designs is attracting notice. However, this might pass, and store designs revert toward the decorative embellishments of Rococo.
     But the wise fast-casual restaurant retailers, like all other retailers, will design their stores to fit time intentions. The ways in which customers intend to use their time with the retailer and the ways in which the retailer aims to have shoppers use time.
     Researchers at University of Western Ontario, University of Missouri-Columbia, and University of Virginia used a set of metaphors to describe five common patterns:
  • Time is a pressure cooker. This one fits many QSR (Quick Service Restaurant) patrons, and argues for that minimalist design and décor. The pressure cooker shopper may be accompanied by children or a spouse and talks about spending time with others. They respond best to methodically considering one purchase choice at a time. 
  • Time is a map. Here, consumers want to flow through the store in a relatively leisurely, yet systematic way, so aid them with clear signals. Sketch a path using a floor covering with a different texture than the surrounding. These shoppers multitask and enjoy comparison shopping. Design paths for it. 
  • Time is a mirror. These shoppers are like the “time as map” consumers, but want more emphasis on learning from the past and less on anticipating future consequences. They shop more comfortably in stores having familiar designs. This might mean you imitate the design of more popular stores. 
  • Time is a river. Here the store design fits shoppers who are spontaneous and open to making unanticipated purchases. Women seeking retail therapy are likely to have a “time is a river” style. 
  • Time is a feast. “Eat the dessert first. There’s always time for the entrée later.” That’s the motto of the extreme “time is a feast” shopper. Those who are less extreme still aim for sensory pleasure. Stimulating décor is de rigueur. 
Click below for more: 
Clock Customer Actions to Fit Time Metaphors 
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Monday, October 22, 2012

Equip Employees to Field Your Fallout

If you—as a retail store owner—broadly announce your stand on a divisive public policy issue, it might be your store personnel who face the fallout. That’s true even if you do your best to make clear you’re speaking as an individual.
     When Whole Foods CEO John Mackey wrote an op-ed piece for the Wall Street Journal opposing ObamaCare, Mr. Mackey stressed that, “Whole Foods Market as a company has no official position on the issue.” Still, threats of a boycott against Whole Foods arose, maybe because a WSJ editor titled Mr. Mackey’s piece “The Whole Foods Alternative to ObamaCare.”
     This summer, when Chick-fil-A president Dan Cathy publically opposed same-sex marriage, he presented it as his personal moral obligation to do so, not as the policy of Chick-fil-A or the restaurants. Soon afterwards, though, Mr. Cathy announced he would stop giving money to anti-gay marriage groups. The Los Angeles Times quoted the company as saying, “while its sincere intent has been to remain out of this political and social debate, it keeps getting dragged back in.”
     This month, when Nordstrom president Blake Nordstrom declared support for legalizing same-sex marriage, it was as the stand of the company, not as only Mr. Nordstrom’s personal opinion. So it became especially important to warn the employees. The Nordstrom announcement to staff read, in part, “To all of our employees – if you choose to talk about this with each other, please do so respectfully. We want you to be informed about our position so you can also respectfully answer any customer questions that come your way.”
     The memo said the reason behind the stand was valuing of equality. This is a widely embraced value in North America. Research findings from University of Delaware and University of Hartford say that if you can take refuge in principles important to your target audience, any controversy tossed around by negative publicity can lead to you being noticed without being hurt.
     The Nordstrom memo not only warned the employees, but also equipped them to handle the fallout. You owe your employees that same sort of consideration if you take on a controversy.
     You also might want to prepare everyone to handle additional business because of the controversy. That “sincere intent to remain out of this… debate” quote was in a caption for a photo of a line of consumers outside a Chick-fil-A waiting to get in.

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Redirect Consumer Boycott Anger 
Take Refuge from Controversy in Principles

Sunday, October 21, 2012

Tally Tradeoffs in Paying for Honesty

I don’t object to you treating your employees nicely. Organizational psychology research finds take-it-to-the-bank benefits in doing so.
     But what about the other side of the cost-benefits equation? Know why you’re expending resources to be nice. Tally the tradeoffs.
     University of Illinois-Urbana/Champaign and University of Southern California accountancy researchers found that retail employees who were paid more, compared to workers in other stores doing equivalent jobs, were less likely to steal from the employer. It’s a valuable insight, considering the researchers said 35% of retail store employees in the U.S. admit to stealing.
     This might be taken to mean that if you want your people to steal less, you should pay them more. However, the researchers’ paper in Journal of Accounting Research convinces me there’s more to it:
  • The study’s data were gathered from about 250 convenience store outlets operating in a total of 31 different chains. That’s a large sample, but what’s true for convenience store employees may not hold for other types of retail operations. The title of the paper is “Can Wages Buy Honesty? The Relationship between Relative Wages and Employee Theft.” I like the question mark in the title, yet would have preferred the subtitle to read “A Relationship…” instead of “The Relationship….” 
  • The data were gathered in 2004-2005, before the Great Recession led to documented growth in both employees’ gratitude for their retail jobs and in employee justification for stealing from their employers. What was true then might need to modified for what’s true in the foreseeable future. 
  • The authors, being professors in schools of accountancy, do know about balance sheets. They estimated the return on investment: About 40% of the extra pay dollars would be balanced by the dollar value of less theft of inventory and cash. This isn’t a wash. You’d still have to make up, from other sources, most of the pay increase amount. Those could be there, such as increases in sales revenues from employees who are paid more. But that wasn’t looked at in this study. 
     My advice: Think of comparatively high pay rates as one way to attract honest employees and as one way to show your genuine appreciation for honesty. Use other ways as well. There is a time for a pat on the wallet to supplement a pat on the back. Still, there’s also a point of diminishing returns in using pay alone to incentivize employees.

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

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Fight Employee Theft with Expectations
Marry Intentions to Employee Engagement

Saturday, October 20, 2012

Augment Your Community’s GNH Index

Do you do business in Bhutan, the Southern Asian kingdom surrounded by India and China? Then you know you’re expected to increase the country’s GNH along with the GDP. GDP stands for Gross Domestic Product, the direct economic index. GNH stands for Gross National Happiness, an index Bhutan considers to be equally important.
     GNH measures a sense of well-being among a country’s citizens and therefore may be a more direct predictor than GDP of the likelihood of the types of social turmoil which make life difficult for small businesses. It’s in your interest to augment your country’s GNH.
     The current issue of Time magazine reports that Bhutan conducted a nationwide survey to create a baseline GNH measure. It turned out to be at about a 74% level, so there’s room for improvement.
     To do the survey, Bhutan had to define indicators of well-being among a citizenry. Among those was “Community Vitality,” and this points to another link to retailing: A vibrant community of merchants draws shoppers.
     Because Gross National Happiness is a large-scale measure, let’s think in terms of the contribution of a small to midsize retailer located in a large center. There, attend to the sense of community provided by the combination of your store and neighboring stores. When a shopping center gives a sense of community, consumers will spend more time in the center. Skilled retailers turn that extra time into increased sales through proper merchandising, promotion, and salesmanship.
     In a megamall like Westfield Stratford City built in East London as part of redevelopment for this year’s Olympic Games, there were special challenges and opportunities to learn from. With over 300 retail merchants, Westfield Stratford City is Europe’s largest urban shopping center. The comprehensiveness of Westfield Stratford City in itself provides a sense of community. The range of retailers includes restaurants, groceries, and entertainment. Office space and housing are part of the planned development. When the physical design facilitates flow from one part of the consumer’s life to others, this enriches the sense of community.
     An important function of the individual retail units in a megamall is as short-term respites within a bustling community. When operating in this sort of setting, your store entrance should use calming colors, sounds, and aromas. This allows shoppers to regroup and prepare themselves to launch into the exciting store interior and back into a purchasing momentum. With a sense of well-being.

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Enrich Shoppers’ Sense of Community 
Mobilize Collective Efficacy for Health

Friday, October 19, 2012

Strengthen the Price-Quality Link

For years, consumer behavior researchers have recommended to retailers that, when presenting prices to the customer, start with the highest and end with the lowest. Researchers at Hong Kong University of Science and Technology had participants rank prices of hotel rooms. Some were asked to rank from highest to lowest. Others were asked to rank the prices from lowest to highest. After completing the task, participants were asked to say how much they'd pay for a hotel room.
     Those who had ranked prices from highest to lowest were willing to pay an average of $19 more than were those in the lowest-to-highest group. The first group also estimated the average price of a hotel room to be higher.
     Yet, any experienced retailer knows the “high to low” effect doesn’t always work. Often, the shopper picks the alternative which was presented most recently, and that’s the lowest priced one. Or—although it’s happening less often these days than it did in the past—the shopper selects the one priced in the middle of the range as a comfortable compromise.
     What makes the difference in the result of the “high to low” tactic? Prior research discovered that one factor was decision pressure. The “high to low” order is more likely to result in a willingness to pay more when the shopper is busy and is taking lots of information into consideration before buying.
     Other research, from University of Colorado and Korea University, concludes that a necessary condition is the consumer’s belief that higher-priced alternatives are almost always of higher quality. With shoppers holding this belief, when a range of product choices were presented in descending price order, study participants chose, on average, higher-priced options. When the alternatives were presented in ascending price order, the people tended to choose lower-priced options.
     One way you can strengthen the price-quality link is to allow modest expectations of discounted products in your store. 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.
     Deliver full value to every customer. But encouraging customers to believe, "You get what you pay for," can be to your benefit.

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Guide Choice by Sequence of Presentation 
Allow Modest Expectations of Discounted Products 
Move the Customer to Accept Higher Prices

Thursday, October 18, 2012

Hassle Less About Item Returns

Online retailers can multiply customer spending by offering to pay for shipping back returned items, regardless of the reason for the return. That’s the conclusion of a study from University of Virginia and Washington and Lee University, as reported in a CNBC “Consumer Nation” posting.
     The researchers tracked shopper interactions at a pair of online retailers instituting a policy of free return shipping. Following such a return, the average customer spent much more money with that retailer. The increases ranged from 158% to 457%. At least more than doubled, and at the maximum, more than quadrupled the sales revenue! But when customers had to pay for shipping items back, the post-return spending with that retailer dropped at least 75%, on average.
     In these studies, there was no relationship between the customer’s opinion of who was to blame for the return and the effects on post-return spending. This is why the researchers recommend retailers implement a no-hassle return policy. I recommend the same for in-store returns.
     Still, what about fraudulent returns? You don’t want people purchasing merchandise from your store having the intent in advance of using the items and then making a return with a demand for a full refund or credit. Consumer behavior researchers at Northern Illinois University, University of Tampa, and University of Texas-Tyler call it URD for “unethical retail disposition.”
     These researchers were struck by the large number of excuses people give themselves to justify the practice and by the fragility of the reasons people give themselves for restraining from serial returning. A significant percentage of shoppers can be easily convinced to do it and experience little, if any, guilt.
     The research findings also led to suggestions for you to reduce the extent of URD:
  • Be a part of the community in which you do business. This is more challenging for solely ecommerce retailers and large retail chains than for the locally-based store. But it can be done by all retailers, and it’s important. URD is more common when shoppers consider the retailer to be an outsider. Rates were especially high at stores owned and operated by members of ethnic minorities selling to members of another ethnic minority in a community in which the owner/operator did not themselves live.
  • Explain pricing and merchandising decisions to customers. The Illinois/Tampa/Texas researchers believe that at the base of URD is mistrust of the retailer’s intentions in pricing and merchandising.
Click below for more:
Run a Store, Not a Public Library

Wednesday, October 17, 2012

Raise Luxury Prices If Equivalents Drop Prices

Are there circumstances in which you should raise your price on a particular item when the price on apparently equivalent items is lowered?
     Yes, that tactic can actually increase sales with status-oriented items.
     Researchers at University of Texas-Dallas explored instances in which a supplier of a high-prestige item drops the price. One result of such a drop is that demand increases for a substitutable item with a higher price. The logic goes like this for the consumer, perhaps at a subconscious level: “If the price is now lower, more people will be able to buy the item. This means the people in my social group won’t be as impressed when I show them I purchased this item. However, if I buy this other item, which carries a higher price, my purchase will impress others more because it’s distinctive.”
     As a retailer, you can respond to higher demand by raising the price on that item. Not a huge increase, to be sure, but a nudge upwards.
     It never pays off in the long run to gouge shoppers with exorbitant prices. But are you trimming profit margins on many products you carry in order to keep customers coming? View the increase in price of the status-oriented product as an example of setting a healthy margin on multi-solution merchandise. The item on which your nudging the price upwards is serving both a utilitarian function—telling time if it’s a watch—and the status function. Boosting margins on multi-solution products may be the right solution for you.
     A story to illustrate how this works: Soon after the breakup of the USSR, a new, highly entrepreneurial and status-conscious mindset took hold in the motherland.
     Sergei and Nikolai, two businessmen enjoying prosperity in the changing economic order, happen to see each other in a Russian shopping district as Nikolai is walking out of a men’s clothing store.
     “What a surprise to see you here, Nikolai,” says Sergei.
     “Ah, Sergei, and I’m equally surprised to see you. I came to this neighborhood to buy a new tie. I’ll open my overcoat for a moment to show it to you.”
     “Thank you, Nikolai. And how much did you pay for this fine tie?”
     With a tone of pride, Nikolai says, “This tie cost me 2,500 rubles.”
     “Oh, Nikolai, how foolish of you. Directly across the street, you could have bought an equally excellent tie for 5,000 rubles.”

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

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Set Healthy Margins on Multi-Solution Products 
Plumb for Consumers’ Desire to Slum

Tuesday, October 16, 2012

Freshen Up for Your Shoppers

“Fresh” sells. Arby’s, in an effort to best Subway, has kicked off a “Slicing Up Freshness”™ campaign centered around the pitch that Arby’s carves up the meat on the store premises, but meat slices come to Subway already having been cut at a factory.
     The psychological appeal of freshness is because of its associations with authenticity as much as because of its associations with health. Krispy Kreme grew and then, after a fall, rebounded largely on the sensory charm of fresh donuts. However, the health angle does reinforce the sale. When Jim Morgan took over the failing Krispy Kreme, he introduced yogurt, oatmeal, and fresh fruit juices.
     If you’re considered authentic as a retailer and you’re seen as providing health benefits, you’re more persuasive not only with consumers, but also with regulators. In early 2011, Walgreens—America’s largest retail drugstore by location count—announced plans to introduce a few more product lines:
  • Fresh fruits and vegetables. Walgreens said they were especially interested in making the additions in “food deserts,” such as inner-city locations with few stores currently carrying fresh foods. 
  • Alcoholic beverages in most stores, including a house brand beer selling for about 50¢ per can to augment the private label Southern Point wine at about $4 a bottle. 
     Many community stakeholders viewed the sale of low-priced alcohol as retailer misbehavior. When approving the Walgreens request for permits, the Omaha city council placed restrictions on single can sales. One way to view the Walgreens announcement of those two line additions at the same time was as the retailer earning permission to sell cheap booze in low-income neighborhoods by showing that they’re going to help kids in low-income neighborhoods to be more healthy.
     Freshen up for your audiences:
  • Fresh flowers in a new arrangement each day on your counters implies to shoppers that you keep up with changes. Fresh arrangements of your merchandise and changing merchandise mixes are important, too. 
  • Packages you carry on your shelves which include green in the label are more likely to be perceived as fresh. Show consumers from throughout the world green product packaging and you'll probably hear descriptions like new, organic, healthy, and refreshing. If the packages themselves don’t have green, you can use green in the signage or even on the shelf tags. The freshness appeal of green is stronger when the store environment is tidy and there is a scent of pine. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Donut Omit the Indulgent 
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Monday, October 15, 2012

Dip Your Toe Into Extreme Experiences

Yesterday, extreme athlete Felix Baumgartner landed on his feet after skydiving from 24 miles above earth. USA Today quoted Mr. Baumgartner as saying in a post-jump interview, “I sensed there were a lot of schoolchildren around the world watching what I was doing today. Maybe one of them will be next.”
     Indeed, the widespread news of this Red Bull Stratos project will boost interest in skydiving and then spread to increase sales of other extreme experiences. The effect is like what happened to the interest in Dalmatians after release of each edition of the movie “101 Dalmatians” and the same sort of thing with Chihuahuas with release of “Beverly Hills Chihuahua” movies. Moreover, there was a spread from breed-specific interest to a general attractiveness in adopting or purchasing dogs of other breeds.
     There also were, in each instance of the dog movies, warnings from animal welfare groups that many of these animals would end up abandoned.
     This warning was addressed mostly to consumers. My warning, arising from reactions to Mr. Baumgartner’s jump, is addressed to retailers: Odds are any explosive growth in sales of extreme experiences will rather promptly shrink back to a niche market.
     The evidence for this is in an analysis by London-based Trajectory Partnership of the effects of economic downturns and recoveries on consumer psychology. Trajectory took into account how bad the latest downturn is compared to those previous ones, and they overlaid all this on consumer psychology trends which are operating independently of the downturn.
     The Trajectory conclusion: Interest in seeking extreme experiences will be limited. Experiences are in, but for most consumers, risk tolerance is way down for the count. The Trajectory researchers pointed out how many people who lived through the Depression pinched pennies for the rest of their lives.
     As a businessperson, don’t overinvest. Dip your toe in when marketing extreme experiences. And in your marketing, use the target motivations identified by consumer psychology research:
  • Roller Coaster Effect. 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. 
  • Breakthrough Effect. Some people are more interested in breaking taboos than in breaking through fears. Some consumers yearn to push the limits. 
  • Educational Effect. The organizers of a Brooklyn Kitchen bug-eating event in Manhattan touted the benefits of learning about cultures in which eating bugs is common. 
Click below for more: 
Distinguish Accelerating from Slowing Trends 
Impress with the Exotic

Sunday, October 14, 2012

Pleasure the Practical Shopper

The NPD Group, Inc., famed for their projections about retailing seasons, has concluded that in the months ahead, most consumers will be seeking the practical over the exotic. The news here is not that preferences have changed. For a few years now, people have been seeking practicality as a justification for their purchases. The news is that frugality fatigue hasn’t substantially bent this mindset.
     NPD also reports that 10% of holiday shoppers say they plan to spend more this year than last, compared to 9% in the 2011 survey. About 23% say they plan to spend less, compared to 27% last year. It’s a positive trend, but insufficient to erase a drive for utility.
     Profit margins average higher for indulgent than for commodity products. We’re pleased to sell practical products, but if the shopper can afford them, we’d like to add luxurious items to the basket. Here are some research-based tips for pleasuring the practical consumer:
  • Tell shoppers the practical advantages. They're ready to spend money, but not a lot and only if they're convinced of utilitarian advantages. Since around 2009, shoe shoppers have been going for durability and for multiuse capability. What practical advantages of your indulgent products can you sincerely present to shoppers to help them reduce resistances to purchase? 
  • Avoid the trap of thinking all shoppers are avoiding luxury. NPD is saying that most, not every one, is. For the affluent shopper, luxury can be for reward and show. Let these shoppers know how this indulgent item recognizes accomplishment and portrays exclusivity. To appeal to the motivation, sell items on which the luxury brand name is conspicuously displayed whenever the item is used in public. 
  • Bundle utility with hedonism. Researchers at Stanford University and Yale University noted the growing popularity of retailers selling bundles. International vacation frivolity is paired with continuing education courses by cruise lines and with surgical procedures by medical care retailers. The clothing store packages a fun outfit with a work uniform. The Stanford/Yale research team found that the way in which the bundle pricing is presented influences the bundle’s salability. Specifically, it’s best to emphasize a discount on the hedonic—the pleasure-oriented—parts. The cruise line and the medical care retailer should compare the usual cost for the vacation frivolity with what the consumer pays when it’s part of the package. The clothing store should feature the savings on the fun outfit. 
Click below for more: 
Adapt Lessons from Other Retailers 
Stay Ready to Sell Luxury 
Bundle Utility, Discount Hedonism

Saturday, October 13, 2012

Offer a Fantasy Gift for the Holidays

The Neiman Marcus Christmas Book is out. As usual, the high-end offerings are spiked with the “fantasy gifts,” like a $150,000 wood-paneled party trailer, a $354,000 sports car, and, “starting at $1,090,000,” a package deal of Van Cleef & Arpels watches, a trip to Paris to see the Eiffel Tower portrayed on the watch faces, and on to Geneva to tour the watchmaker’s facilities.
     These are available only through the catalog, not in-store. People can’t drop into their neighborhood Neiman Marcus with $150,000, ready to hook up the trailer. You can do better. Think about a fantasy gift you can offer in your store for the holiday gift-giving season.
  • Publicity. The Neiman Marcus fantasy gifts are featured in countless newspaper articles and television news pieces. Such publicity is invaluable in maintaining brand awareness. When you create your fantasy gift package, send out a press release. Then send out a press release when the fantasy gift is purchased. Aim for “when purchased” rather than “if purchased” by keeping the price high enough to draw attention, but low enough to attract a buyer. 
  • Tradition. By announcing a fantasy gift each year, as Neiman Marcus does, you create a tradition which arouses curiosity about your store at the time people are thinking about gifting. Augment the advantages by carrying items like Christmas tree ornaments, Lladró figurines, and Painted Ponies collectibles which periodically have new releases. At other times of the year, adding such items to your merchandise or service mix could distort your store brand image, according to research at University of Pennsylvania, the Verde Group, and the Retail Council of Canada. But during the holidays, such items are interpreted by consumers as signaling the retailing reliability of tradition. 
  • Social consciousness. Neiman Marcus is donating to charity a portion of the fantasy gift sales receipts. For example, 10% percent of the proceeds from the purchase of the party trailer benefits amfAR™, The Foundation for AIDS Research. You could do something similar, but consumer psychology research findings suggest you pair the charity recipient with the nature of the gift and the preferences of the purchaser. 
  • Anchoring. With those price points for the fantasy gifts, everything else seems like a bargain by comparison. As it happens, about 40% of the items in the Christmas Book cost less than $250. Your fantasy gift will be the draw to inspect your other holiday merchandise and services. 
Click below for more: 
Boost Profits by Making Items Collectibles 
Project Your Brand Positively

Friday, October 12, 2012

Surface Shopper Flaws

As the teenage girl’s mother walks in, she’s startled to see a boy with his arm around the daughter. The mother calls her aside. “Who is he?,” she asks.
     “Oh, he’s my new boyfriend.”
     “Dressed completely in black leather? Piercings all over his head? Has some of our silverware sticking out of his pocket? Won’t even look over at me when I walked into the kitchen? Dear, he doesn’t seem to be a, um, nice boy.”
     “Oh, relax, Mom. If he wasn’t nice, would he be doing 1,000 hours of community service?”
     That boy might have some shortcomings which the girl’s defensiveness gets in the way of her admitting. Some Carnegie Mellon University research findings indicate the boy himself would be more willing to admit them, and this brings up the point for retailers:
      People shop to correct shortcomings. When somebody admits to a flaw, here’s an opportunity to consummate a sale. So how do we make it more likely that our shoppers will drop the defensiveness?
     What would work if you were the customer? Please think now of a flaw you have that would make it more likely you’d purchase something sold on a website. Some shortcoming you admit you have, but don’t talk about to everybody, maybe because it’s embarrassing.
     Got that personal flaw in mind? Okay, read on.
     Suppose you’re shopping on my ecommerce site for the first time. I present you with a questionnaire saying I’d like to get to know more about you so I can better meet your needs. An item on the questionnaire asks specifically about that flaw.
     On one version of the questionnaire, the website header has my store logo on the left and on the right reads, “Survey on Strengths & Weaknesses” in a professional black font. On the other version of the questionnaire, the website header has on the left a cartoon devil logo and on the right reads, “How BAD Are U???” in a bright red font.
     On which of those two would you be more likely to admit to a flaw? The Carnegie Mellon researchers explored this issue of people revealing their shortcomings. What did they find? If you’re similar to most of the people who were in that study, you’d be more likely to admit to your flaw when the questionnaire is casual.
     Surface flaws by loosening up your shoppers, clients, or patients. Less formality helps.

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

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Loosen Up Shoppers to Reveal Flaws

Thursday, October 11, 2012

Serve Yourself to SST Guarantees

Bricks-and-mortar retailing examples of self-service technologies (SSTs) include ATMs at banks and vending machines in merchandise stores. Internet retailing transactions are pretty much all SSTs. This fulfillment format can extend the hours in which products and services are provided, benefiting both the retailer and the consumer. Another joint benefit is the reduced dependency of the shopper on retail personnel being available.
     Researchers at Ohio State University and Australia’s Deakin University list ways in which sales completed with SSTs differ from those completed through conversations with a salesperson. The consumer must:
  • Be an equal partner with the retailer in completing the transaction 
  • Know how to use the SST system provided by the retailer 
  • Resolve problems with the transaction even when immediate face-to-face interaction with the retailer is not available 
     The last of these three creates particular opportunities and dangers. What determines which, say the Ohio/Deakin researchers, is the nature of any service guarantee assuring resolution promptly after a transaction goes awry. Proper service guarantees reduce consumer dissatisfaction, negative word-of-mouth, and store switching.
     The researchers propose characteristics for a proper SST service guarantee. Chief among these is that the guarantee be attribute-specific rather than unconditional. An unconditional guarantee says that the problem will be fixed no matter what the reason for dissatisfaction. An attribute-specific guarantee lists the reasons the retailer will take remedial action. It might be for late delivery of a perfect product or for inaccuracies in a prompt delivery, for instance.
     Here’s why I agree with the recommendation for attribute-specific guarantees:
  • Consumers are more likely to believe an attribute-specific guarantee. 
  • Listing the attributes allows you to describe again the benefits of what you offer, such as promising prompt delivery and flawless accuracy. 
  • In making your promise more specific, you protect yourself better against exploitation by unscrupulous shoppers. 
     Not that most shoppers are out to exploit you. On the contrary, the researchers say that when a large remedy—such as reimbursement for the entire purchase price—is made for what was a minor inconvenience—such as a vending machine taking a long time to respond—the consumer feels uncomfortable. If a bank offered to match with bank funds the amount of a flawed ATM withdrawal, the bank customer might start to doubt the fiduciary skills of the bank.
     Then, regardless of a guarantee’s conditions, urge SST customers to let you know about the problems so you can correct them.

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

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Incorporate Vending Machine Technologies 
Guarantee with Care

Wednesday, October 10, 2012

Plot Your Way to Profitability

In The Seven Basic Plots, Christopher Booker contended every compelling story is a variation on one or more of a limited number of possibilities. Inspired by the book, Advertising Week convened a panel of creatives to discuss why each of the basic types might motivate consumers. Here’s my version of their list, supplemented with my suggested shopper psychology tactics.
  • Overcoming the monster. In this plot the underdog prevails. Researchers at Harvard University, Simmons College, and Boston College confirmed the underdog’s appeal to consumers. When a choice of chocolate bar brands was offered to the study participants, the brand positioned as the underdog was selected about 70% of the time. However, be careful when featuring your store as the underdog. At the same time that people root for the underdog, employees and consumers like to associate with winners 
  • Rebirth. What has been lost is regained. Skechers took this approach to woe the older consumer. Their “Comeback” campaign featured retired sports stars who talked about how products from Skechers could help them return to professional-level game performance. 
  • Quest. Retailers who talk about continuous improvement are telling consumers of a journey which could easily go on forever. Quest plots will grab the attention of people who put top priority on products and services which help them achieve more than they have now. The never-ending quest intrigues those seeking never-ending gains. 
  • Journey & return. The characters in the story end their expedition rather than going on forever, and they come back changed. This plot line combines escape with magic. Special promotions and events in your store can cast magic spells for escape benefits. 
  • Rags to riches. This plot line celebrates perseverance, which fits well for retailers who profit by having customers save money instead of spending money. These are the insurance agents, CPAs, attorneys, banks, and others who provide financial planning services. 
  • Tragedy. So much can go wrong in life, your tale warns the consumer. Tragic stories can grab attention. Research at Universidad Pùblica de Navarra in Pamplona, Spain concludes that for certain shoppers in the world, fear sells, but for others, it’s a turnoff. How to tell which is which? Monitor the extent to which your shopper uses fear words themselves. 
  • Comedy. Humor heads off mental counterarguments. The shopper is too busy chuckling to challenge the sales pitch. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Analyze the Role the Customer Expects

Tuesday, October 9, 2012

Coach in the Language of the Employee

Now here’s some news you can use as a retailer!
     “A CSR's locomotion orientation facilitates ambidextrous behavior and interacts positively with an assessment orientation.”
     No, really. The problem is that the advice is buried in babble. It’s from an article titled “Generating Sales While Providing Service: A Study of Customer Service Representatives' Ambidextrous Behavior,” which appeared in the Journal of Marketing. Since my objective in writing the RIMtailing blog is to extract profitability tactics out of high-quality research findings, I’ll translate:
     If you want your staff to generate additional sales while resolving a customer’s concerns about a past sale:
  • Tell your staff you expect them to master the skill of smoothly moving between service, on the one hand, and selling, on the other hand. 
  • Coach your staff to take the time to assess each customer’s distinctive needs, desires, and purchasing style. 
     The research findings give additional insights:
  • When the smooth switching is done well, both sales revenue and customer satisfaction increase. 
  • Because smooth switching uses up time, each staff member will not be able to handle as many transactions, on average. 
  • The switching happens more easily when you grant the staff member more discretion to make decisions in collaboration with the customer being served. 
  • A smooth blend of servicing and selling is less likely when the staff member views himself operating as a member of a team rather than taking individual responsibility. 
     Was I right in saying that there was useful advice buried inside the obscure wording? Then I’ll move to my real point in this posting: When you or one of your store managers is coaching a store employee, take care that the language fits what the employee will understand. Otherwise, what is said may be as incomprehensible to the employee as the gibberish above probably was to you until I explained it.
     And if it is a new employee, the person may hesitate asking what’s meant because they fear that you’ll label them as unqualified. Stay alert for signs of puzzlement. Encourage the employee to ask you questions. In fact, say you truly want questions, and mean it.
     Different people have different learning styles and all people remember best what’s delivered in a range of modalities.
  • Tell the person 
  • Give it to them in writing 
  • Show them how it’s done 
  • Have them demonstrate it to you 
  • Ask them to teach it to someone else and then report the results 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Repeat Yourself Repeatedly

Monday, October 8, 2012

Collapse to Soles When Asking for Money

When we’re asking consumers to reach inside their souls to contribute to a worthy cause, let’s portray individuals and cohesive groups.
     A while back, researchers at University of Chicago asked undergraduates how much money they’d be willing to donate to rescue an endangered panda found in a remote Asian area. On a form asking the undergraduates the most they’d be willing to donate, some of the study participants were shown a picture of a panda, while others were shown just a dot to represent the panda to be rescued.
     Students shown the picture said they’d donate $19.49 on average. The average for the dot group was $11.67. As we’d expect, the picture increased the willingness to contribute. The lesson for retailers? Show customers what they’re getting for their money.
     But there was also an unexpected finding: In another part of the study, participants were told that the number of pandas to be rescued was four, not one. You might think that seeing pictures of four would yield higher average donation amounts. But this is not how it turned out. For the four identical panda pictures, the amount was actually a bit less, at $18.95 rather than $19.49 for the sole panda picture.
     Now a more recent study helps clarify what’s happening. In this study, researchers at University of Michigan and London Business School analyzed funding activity on Kiva.org, a micro-financing site. On the site, photos and descriptions are presented of people seeking small loans for commercial endeavors. The researchers were interested in what happened with listings which included photos of a group of fund seekers. Some of these photos were judged in a preliminary study to show a group who looked tightly organized, as if ready to act as one.
     Those appeals were more quickly funded than the appeals in which the group looked loosely organized.
     The Michigan/London researchers also found that charitable donations to help poor children were higher when the children were described as belonging to the same family than when not.
     The pull is stronger if a consumer is shown a single attractive entity than if shown isolated individuals.
     Note that the effect works in reverse if the appeal is for entities a consumer finds unattractive. When the Michigan/London researchers described the charity recipients as a cohesive group of child prisoners, the average donation amount was less than when the children were shown as isolated individuals.

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

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Show Customers the Right Picture

Sunday, October 7, 2012

Hear About Herd Immunity

“Save lives by dropping bike helmet requirements.”
     A New York Times feature made that argument, using as evidence the highly successful French bike-sharing program, Vélib. Because of Vélib, carbon emissions from auto use were significantly reduced. Plus, we’d expect the benefits of exercise—lower rates of hypertension, heart disease, and diabetes.
     The NYT article attributes the popularity of programs like Vélib to riders not being expected to wear safety helmets. And this is where I’ll make a link to the controversial notion of “herd immunity” before concluding with what it has to do with the world of retailing.
     Herd immunity describes the notion that if a very large percentage of the population is immunized against a disease, those who don’t receive vaccinations are protected because there’s no disease lurking around to catch. With Vélib and similar programs which embrace riding bicycles sans head protection, we can add to the benefits that there will be fewer autos lurking around to knock people off their bikes and thrust those people’s heads into destinations which puncture. Those without the helmets acquire a variant of herd immunity.
     Requiring bike helmets results in what I call “ricochet consequences.”
     A higher level of ricochet consequences—regarding airplanes instead of bicycles—was discussed in a 1996 Slate article: Why were small children allowed to sit in a parent’s lap when flying? We buckled down the passengers, flight attendants, and dinnerware. Why not the little kids?
     The answer was in a consumer behavior study commissioned by the Federal Aviation Administration. It said requiring small children to be buckled into their own seats would cost lives. If the parents had to pay for a seat for the child, they’d be more likely to drive, and driving is much more dangerous per mile than flying. It was estimated that an airplane infant seat requirement would result in nine additional babies killed on highways each decade, while saving only one death from a plane collision. That’s because plane crashes are rare. So are head injuries from bike accidents, says the NYT article.
     A Harvard Business Review blog posting carried the case further: A ricochet consequence of requiring infants to have their own seats would be to increase the demand, thereby probably raising the price, thereby making it even more likely parents would choose to drive, thereby making things even worse.
     Regulations on retailing intended to protect consumers could have dangerous ricochet consequences.

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

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Saturday, October 6, 2012

Sell Happiness

Your mission is to contradict old expertise from William & Mary College. Quite old expertise. In 1792, the proverb “Money can’t buy happiness” made its first academically documented American print appearance. It was in William & Mary College Quarterly.
     We’d like our shoppers to buy happiness, using their money or monetary equivalents for the purchase. In the U.S., at least, it’s the patriotic duty of retail professionals during the election season. Our Declaration of Independence promises us “Life, Liberty and the pursuit of Happiness.”
     However, as researchers from University of Pennsylvania, Stanford University, and MIT point out, the nature of happiness differs among the consumers to whom we’ll want to sell it. The researchers, after collecting questionnaire responses, conducting laboratory experiments, and analyzing diaries, concluded that a principle distinction is between the instances in which people find happiness in excitement and instances in which they find happiness in calmness.
     We’ll want to be ready to, first, determine which our shopper is looking for and, second, provide it. Here’s a tip for those two parts: Compared to the calmness contingent, those looking for excitement tend to be younger and more focused on the future than on what’s happening right now. In the studies, younger subjects preferred more stimulating choices in tea and music. They discerned differences in bottled water alternatives and went for the livelier ones.
     But sometimes, it is the young and those focused on what’s happening right now who find happiness in calmness. A while back, 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 designed to stimulate. No, the Ben & Jerry’s folks intended the new flavors to soothe.
     Ben & Jerry’s had gotten a bunch of input 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.
     On the other hand, older consumers may be looking for excitement because that’s what their younger consumption companions seek. These older consumers want to buy experiences which include family and friends. Happiness comes from spending money to share exciting times.
     Let’s sell it to all of them. As retail professionals, let us transform the 1792 quote into, “Whoever said money can't buy happiness just didn't know where to shop.”

Click below for more: 
Meditate on Happiness 
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Friday, October 5, 2012

Head On In To Portray Power Products

Consumers who seek power products such as red meat and sport utility vehicles like head-on portrayals.
     Researchers at Cornell University and University of Michigan showed some study participants pictures of SUVs facing directly toward the viewer, while others were shown side views of the vehicles. The consumers seeing the head-on perspective gave higher average ratings of the SUV on words like “dominant” and “powerful.” Then another set of study participants, asked to assess the status and power of the SUV’s owner, were more likely to say “high status, high power” if shown the head-on view of the vehicle than if shown the side view.
     When the same experiments were done with pictures of family sedans, there were no differences in the degree of rated power for the car or for the owners. The conclusion: People seeking the product associated with power will get more interested if the view is head-on.
     A verbal head-on, in the form of a heads-up, also can make a difference. A team of researchers from France, Australia, and the U.S. told study participants they’d be given either a beef sausage roll or a vegetarian roll to eat. But those tricky researchers had lied to half the participants, who actually were served the other entrée from the one they were promised.
     One group of those participants granted a high rating to what they ate, regardless of whether they actually ate the meat or vegetable version, as long as they thought it was meat. What does this have to do with valuing power? Unlike the veggie fans, these meat elitists showed up on psychological testing as embracing values of power and strength.
     The way in which salespeople face customers also can play a role: It is 10:00 AM. The doors open at the Tobu Department Store in Tokyo, and as the shoppers enter, the neatly dressed salespersons are standing ramrod straight at their respective counters. Then as the first shoppers of the day pass, each salesperson bows gracefully.
     But the customers usually don’t bow back.
     It’s not as if the Japanese are shy about bowing. They bow toward trains arriving at stations. Children bow toward cars that have stopped so the children can cross the street. No, the dearth of reciprocal bowing isn’t because of a lack of habit. It’s an acknowledgement of power difference. The Tobu employees bow down before the power of the shopper. Head-on.

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Sell Benefits to Fit Shoppers’ Values 
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