Saturday, November 30, 2013

Devise a Denouement for Departed Brands

The denouement of a story draws together the threads of the plots, ending the tale with a degree of resolution which satisfies the story’s consumers. Some people enjoy having a little uncertainty left, allowing the audience to create their own versions of the ending. Still, for the most part, consumers hate having lots of loose ends.
     Researchers at American University and University of Arizona used this reasoning to explain how viewers reacted when a favorite television series was discontinued. These intrepid scientists devoted more than ten years tracking consumer reactions after shows like “All My Children” and “The Sopranos” showed the last episode.
     The researchers saw and heard consumers grieving. Yet, as the researchers dug deeper, they concluded the grieving was for more than the loss of the routine in watching the program or loss of the enjoyment from the story lines. A substantial component of the mourning was for the loss of opportunities to discuss those story lines with others. The television series had become a vehicle for a special sort of socializing in what’s called a “consumer tribe.”
     When a group of your customers share not only an allegiance to your store, but also a passion for shopping with you, and when those customers share their passion with each other, you have a consumer tribe.
     Consumer tribes have been studied for decades, and retailers have been advised to welcome consumer tribes as a way to build business at their stores. A downside of consumer tribes has been that they resist changes in your business which are useful for full profitability. In many cases, the tribe members structure significant parts of their lifestyles around the store’s characteristics, so when the retailer executes changes, the effects on the tribe are more than trivial.
     Fans of “All My Children” and “The Sopranos” were consumer tribes that had structured parts of their lives around a treasured brand.
     So what does this have to with denouements? The answer is that the researchers found the grieving to be significantly less when the last episode of the show drew together the threads of plots well. The grieving was worse when lots of loose ends were left unresolved.
     The researchers suggest that when a brand is no longer available in your store, you go out of your way to explain why. This helps the shoppers who loved that brand to put the loss behind them.

Click below for more: 
Try Being a Tribe Without Reservations

Friday, November 29, 2013

Ask for Item Opinions Post-Purchase

Asking a shopper for item opinions before the shopper makes a choice can be useful in guiding that consumer and others like that consumer toward the right alternative. Still, show caution. Study findings from University of Cologne and Jacobs University indicate that if the shopper expresses a highly positive opinion prior to purchase, she is less likely to effusively praise the item to others afterwards via word-of-mouth. Her liking of the item is also reduced somewhat. Stating a highly positive opinion reduces the extremity of later expressions and experiencing of that attitude.
     Moreover, after a customer selects an item for purchase, we usually don’t ask, “Why did you select that item?” We accept that customers have their own good reasons. Asking why risks putting the person on the defensive or introducing doubt. If we do ask, it would be better to phrase the question, “So that I might better help you and other shoppers make good choices in the future, I’m interested in how you decided on the item you did.”
     You might find it worthwhile to do that rephrasing. Researchers at Hong Kong University of Science and Technology found that asking a customer for his or her opinion in the right way can be a powerful selling technique.
     To use this tactic, you need to understand something surprising about how it works: Being asked to select which of a small group of products the shopper prefers makes it more likely the shopper will want to buy the next product considered. The effect is strongest when a shopper is in a hurry to buy a number of different items.
     This technique can be valuable for add-on sales. The salesperson asks, “What did you think of these different items you’ve looked at?,” and then after listening to the answer, “What other items may I help you find today?” The cashier at the checkout counter asks, “What do you think of the items you found here today?,” and then after listening, at least briefly, to the answer, suggests an add-on item for the customer to look at next time he is in the store.
     Never ask for too many justifications, though. Research findings from Universität Heidelberg and Universität Mannheim show that if you ask the shopper to generate loads of reasons why an item was selected, the task becomes more difficult for the person, and this makes the alternative less attractive.

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

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Dampen Involvement to Redirect Preference 
Ask Customers for Their Opinions of Items

Thursday, November 28, 2013

Relax Teen Gift-Givers’ Commonality Fears

When quite young children select gifts for others, they will often start out thinking about what they themselves would like to have. The recipient’s preferences may not be granted adequate priority. The safeguard is that an adult is often there to guide the young child’s selection.
     When teens shop for gifts in your store, guidance of that precise sort is less necessary. The added intellectual and emotional maturity bestows an ability to appreciate other people’s perspectives. But another bias appears, and it’s strongest when the teen gift shopper places high importance on being thoughtful. Researchers at University of Cincinnati and University of Florida saw it in adults as well. It’s the discomfort with selecting the same gift for more than one recipient. This happens even when the gift shopper knows a certain item would be an ideal choice for a group of recipients.
     It also happens when the gift shopper says the recipients don’t know each other. This motivation for variety seeking is a desire to think of each friend or family member as distinctive. It’s not so much a fear of embarrassment at people finding out they got the same gift from your shopper.
     You don’t want to set off a different kind of embarrassment in the teen shoppers by trying to talk them out of the need to make every gift purchase different. At the same time, if what you’re carrying in your store would be an ideal choice for many recipients, you’d prefer to have the teen make a multiple purchase from you.
     The Cincinnati/Florida research findings indicate that a solution to the problem is a sophisticated version of what the adult companion does with the young child shopping for gifts. Encourage the teen to be thoughtful by thinking about what present would make the recipient happiest, even if it’s the same item others receive.
     What friends and family will think about the gift is highly important to adolescents, according to researchers at Temple University, Jerusalem College of Technology, and University of Haifa. Teens use gifting to influence the impressions others have of them. They usually want the gift to strengthen the relationship by showing ways in which they are similar to the gift recipient. Yet, in other cases, they prefer to select a gift which carries as neutral a message about the relationship as possible.
     Help the teen clarify the message she wants to deliver.

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Discover What the Gift-Giver Expects in Giving 
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Wednesday, November 27, 2013

Spot Apathetic Resisters

Consumer researchers are interested not only in why people buy, but also in why people resist buying. For instance, a group at University of Texas-Austin, Loyola University in Chicago, University of Stirling, and University of Bath explored why high school students resisted buying into the idea of attending the prom.
     The researchers identified four types of reasons:
  • They wanted to make a statement to others 
  • They wanted to make a statement to themselves 
  • They predicted they’d feel bad if they attended 
  • They were what the researchers called apathetic resisters 
     This fourth one might sound like an oxymoron. Resistance requires an active effort, so how can you resist apathetically?
     The answer is in the power of inertia.
     Sitting before the parole board, an inmate is asked, “What is the first thing you’ll do if we release you to the community?”
     “I’ll build the biggest bomb I can and blow up this place!”
     Based on that answer, the board promptly turns down the man’s bid for parole, telling him, “We’d like you to rethink and revise that decision. In twelve months, we’ll again consider releasing you.”
     Each year, the inmate appears before the board, each time he’s asked, “What is the first thing you’ll do if we release you to the community?,” he answers, “I’ll build the biggest bomb I can and blow up this place!,” and the parole board members recommend he develop a better plan.
     Then one year, the answer is dramatically different. The man says, “When I get out of prison, the first thing I’ll do is to find a job as an accountant, making use of the thorough training I’ve received while incarcerated here. I realize that because of my felony record, it will be a challenge to become a Certified Public Accountant, but I shall persevere. In any case, my research has shown me that there is a demand for talented accountants. My instructors have told me I am especially talented, so I fully expect to be very successful financially.”
     Highly impressed, one of the parole board members asks, “What will you do with all that money?”
     “I’ll buy the biggest bomb I can and blow up this place.”
     The inmate in that story apathetically resisted opportunities to change. When you spot this type of reasoning in a store shopper you are serving, recognize the depth of effort it would probably take to close the sale.

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Acknowledge Inertia in Consumer Behavior

Tuesday, November 26, 2013

Hide Your Face If Your Foot’s in the Door

Make the sale a slice at a time, I’ve advised. The first objective is getting the customer to say yes. In a wide variety of studies, it's been found that once the prospect says yes, he’s more likely to continue saying yes. 
     Present items which can be purchased in pieces. When aiming for a charitable contribution from a resistant prospect, request a small amount and then, if successful, ask for more later. If you’re community activists, don’t talk about even a small donation at the start. Instead, begin by presenting the petition to be signed.
     Get your foot in the door. The traveling salesman on the front porch with the perfect timing of an expert senses when the lady of the house is about to say no, and at precisely that point offers a combination of merchandise and cost which can't be refused. Once the lady says yes, thereby keeping the door from being slammed shut on the salesman's foot, the sale is built with upgrades and additional items.
     But successful implementation of that old tactic is a bit more complicated than it first appears, according to researchers at University of British Columbia and Florida State University. They began by asking study participants to show a small act of support for a cause. Then after a time interval, the same participants were asked if they’d do a more difficult and more meaningful task for the same cause.
     We’d expect that those who completed the small act were likely to agree to the larger action, on average. But that turned out not to be true for everybody. When the initial act was performed in public, the likelihood of consenting to the larger action was much less than when the small act was done without acknowledgement by others.
     Why? Two of the possibilities:
  • Those who agreed to do the small act in public felt under pressure to go along. Those who did it more anonymously had greater commitment to the cause. 
  • Those who did the small act in public were more likely to feel they’d done their social duty, so their motivation to do the larger act was less. 
     The Jewish scholar Maimonides described eight levels of charity. Least noble was when one gives unwillingly. Toward the top was giving without the recipient knowing from whom he received it.
     If we’re wanting noble commitment to a cause, public acknowledgement is counterproductive.

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Monday, November 25, 2013

Scope Out the Fix on Fate

One out of every three American adults trusts what is in horoscopes as accurate, note researchers at Johns Hopkins University and University of South Carolina.
     Estimates of the percentage of consumers who believe in fate reach 75%.
     Smart retailers should understand how these beliefs will influence purchasing behavior.
     A first step in doing this is to distinguish between those who believe their fate can be changed and those who believe it can’t. The researchers exposed people of both types to a prediction that the day ahead of them would be unpleasant. Each of the people was then offered the choice between a virtuous and an indulgent reward, such as a healthy snack or a sweet snack.
     Which type of consumer—the “can change fate” or “can’t change fate”—do you think was more likely to select the indulgent reward?
     The finding was that those choosing the indulgent reward were probably thinking that they’d make a bad day better. It was the “can change fate” group. However, the research also indicated this reasoning was subconscious. It was an emotional, not a reasoned, decision.
     Another difference among consumers regarding fate is in whether they think it operates cyclically or linearly. Researchers at New York University assigned study participants to allocate a $1,000 investment across a group of stocks, some of which had performed well in the past and the rest of which had not. Those who saw fate as linear placed more in the portfolio which had done well, figuring this would continue. But those perceiving fate as cyclical were more likely to choose the other stocks, figuring that a correction in the price was due. What goes down must go up.
     In what ways might you as a retailer detect these differences? You could notice significant events happening in your shoppers’ lives. During times of uncertainty, people tend more toward believing they can change their fate. They’re grasping for control. It could be economic uncertainty. It could be the consumer entering a new role, such as starting college, getting married or divorced for the first time, or moving to a new city.
     You also can influence the consumer’s fix on fate. For example, the NYU researchers were able to increase the portion of the $1,000 well-traveled participants allocated to poorly performing stocks by having the experimenter wear a highly visible yin-yang symbol. The yin-yang represents the inevitability of cyclical change.

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Sunday, November 24, 2013

Sport Attractions for Watching & Playing

Retailing to sports fans is of two sorts—selling seats to those who want to watch and selling equipment to those who want to play. In reality, there’s some overlap. Baseball teams sell more seats when they offer fans opportunities to show their stuff briefly on the field. Sporting goods stores market to the parents who will be watching the games, with on-the-field time perhaps limited to mercilessly heckling the referees and the kids’ coaches.
     Researchers at University of Wisconsin–Milwaukee and University of Central Florida found that the marketing points differ for the two orientations depending on whether the consumer is independent or interdependent. People with independent self-construal aim for autonomy and assertiveness. They tend to behave the same irrespective of the social situation they’re in. On the other hand, those with interdependent self-construal place high value on maintaining good relationships with others, and so readily change their behavior to fit in.
     As you’d expect, the interdependents are more likely than the independents to purchase equipment to play team versus individual sports. But the Wisconsin/Florida research was looking at another set of differences: When occupying a stadium seat, the interdependent consumer—in comparison to the independent—finds more purchase benefits from how the game is played than from the game’s score. But when participating in the play, the interdependent—compared to the independent—finds more benefits in the likelihood of winning the game than in hearing about how the game would be played.
     The differences in retailing to independent shoppers contrasted with interdependent shoppers is now inspiring many consumer psychology studies.
     Another typology of fans comes from a University of Oregon analysis which characterized spectators as having three sorts of motivations
  • Die-hard fans. They’re committed to the team and love the nature of the sport. Keep feeding them information about team history and give plenty of notice about upcoming changes so the fans feel like they’re in the know. 
  • Fair-weather fans. These spectators love cheering mightily for winners, and they will switch who they buy tickets to see if games get dull. Keep consumers excited by regularly introducing changes, especially if the team is piling up an unfavorable win-loss record. 
  • Tailgaters. These football fans are there for the camaraderie. Hold special events on and around the field. Use social media to provide opportunities for the fans to exchange critiques. Give discounts when a group of consumers purchase together. 
Click below for more: 
Generate the Excitement of a Football Game 
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Saturday, November 23, 2013

Gild the Lily with Guilt

A perfectly good sales pitch for a pleasure-oriented item can be made even better by adding guilt, according to studies at Northwestern University, Pennsylvania State University, and Yale University. The researchers aren’t talking about inducing guilt in the shopper at the prospect of failing to make the purchase, although that can work, too: “If you pass up this opportunity, your family may not be adequately protected.”
     Instead, these researchers are talking about guilty pleasures—the added kick in enjoyment that comes from the consumer saying, “I really shouldn’t be doing this, but it feels oh so good.”
     Psychologists generally classify guilt as a negative emotion and consider that a negative emotion, like sadness, can potentiate a positive emotion, like enjoyment, only through contrast: “This massage feels especially wonderful because I’ve been down in the dumps all week.”
     Guilt is a different kind of catalyst, the research concludes. Where it would make little sense for a retailer to induce sadness in the shopper in order to increase enjoyment, inducing a little guilt can work out fine: “Go ahead and do it. You can’t always be perfect.”
     This is subtly different from saying, “Go ahead and do it. You’ve plenty of time to feel guilty afterwards.” This is a matter of arousing guilt during the consumption itself.
     Other research finds that the relief from guilt can also gild the lily of a good sales pitch. When a customer successfully resists the temptation to buy an item, offer one more opportunity to make a purchase in that product category. According to studies at Columbia University and Hong Kong University of Science and Technology, your chances of making a sale through the second offer are substantially greater than if the customer had not resisted the temptation.
     The technique is useful only when the customer gives clear evidence of having struggled with the purchase decision. The reason the selling technique works has to do with pride and guilt. When a shopper resists the temptation to buy, she has a sense of pride, and any feelings of guilt fade away. The shopper's will power is weaker because it's just been used, and the shopper thinks she deserves a reward for enduring the stress of having to exercise her will power.
     Analyze why the shopper resisted the temptation, then propose another item she’s likely to be interested in which does not naturally arouse the same temptations.

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Friday, November 22, 2013

Wrap Your Head Around the Probability Warp

When the shopper in your store is debating with himself whether a product or service is worth the expenditure of his money and time, he may be asking at least these three questions:
  • “How important to me are the potential benefits from the purchase?” 
  • “How soon would those benefits occur?” 
  • “How likely are those benefits to occur?” 
     In most retail transactions, the answers to those questions are at midpoints of magnitude. For instance: The potential benefits are somewhat important. The benefits, if they occur, would occur at some indefinite point in the foreseeable future. There is a fair likelihood of the benefits.
     In these transactions, the consumer juggles probabilities.
     But for some retail transactions, the answer to one or more of those questions is at an end point of magnitude. For example: The potential benefits are extremely important. The benefits, if they occur, would be immediate. The benefits are highly unlikely.
     Researchers at University of Chicago, University of Miami, and Shanghai Jiaotong University find that with these considerations at the extremes, the consumer becomes very sensitive to variations in magnitudes. The sensitivity is greater still when the decision is whether or not to buy a specific item rather than which one of multiple options to purchase. Analyses of probabilities warp into considerations of either a decisive yes or a decisive no.
     In these hair-trigger situations, you can inadvertently kill a sale by introducing doubts, and you can resuscitate the transaction by giving evidence of important benefits delivered at the right time with high likelihood.
     Or you might choose to ease the hair trigger by introducing more options into the single choice situation.
     In other instances, shoppers place greater importance on possibilities than on objective probabilities. 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 chance of this happening it wasn’t even measurable.
     More of the participants chose Car 2 than chose Car 1.

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Cultivate Positive Moods for Risk Assessment

Thursday, November 21, 2013

Stink Out Among Refined Retailers

After taking in “Modern Marvels: Stink,” on the History Channel, I sensed better how the odor elimination pulling in the largest total profits at retail seems to be for smells consumers aren’t sure even exist. The 1920’s ad that introduced the term “B.O.” to our lexicon as a shorthand for “body odor” recommended women smell the underarm areas of their dresses as a check upon taking off a dress. An early ad for Listerine profiled the tragedy of a woman who failed to realize her bad breath prevented her from ever marrying.
     When Febreze was first introduced to retail shelves as an odor eliminator, one ad showed a woman complaining that her jacket smelled like cigarette smoke, and another ad showed a woman worrying that her couch smelled like her pet dog. The ads didn’t sell the product. Researchers found that most consumers whose jackets smelled like cigarettes or whose couches smelled like dogs were so accustomed to the odors, they didn’t realize stinks were there. They felt no need for an odor eliminator. To sell the product well enough at retail, it was necessary to convince consumers to use Febreze as a preventative, not a curative.
     Social security is the approach I recommend you use in selling the abundance of products customers buy to mask or eliminate their unpleasant odors. This sales technique also works for products to neutralize odors consumers are fully aware they’re exuding or experiencing.
     Another takeaway for me from “Stink” was reminders of ways in which personal history and situational context influence consumers’ judgments that an odor is foul. The cattle ranch smell which keeps a city dweller from buying a home nearby might seem to a country boy like a reminder of youth. Visitors to Yellowstone Park get out of their cars and actually walk briskly toward the rotten eggs smell of the bubbling mud because it goes along with a tourist experience.
     Last week, Archbishop Carlo Maria Viganò, the Vatican’s ambassador to the United States, advised the U.S. Conference of Catholic Bishops before the Conference selected their new leadership. The New York Times reported that the ambassador said Pope Francis wants bishops to be shepherds who know the smell of sheep.
     Sheep might not smell as bad as hogs or cows. Still, tolerating unpleasantness for a greater good sticks out as another principle some consumers use and retailers should therefore attend to.

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Check That Your Store Smells Good 
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Wednesday, November 20, 2013

Demarket, Demarket, to Sell a Fat Pig

Business researchers at University of Rochester and Massachusetts Institute of Technology are advising you to pull back on your marketing.
     At first blush, it would seem that the only sense this advice makes is if interpreted in accord with the quote attributed to Philadelphia department store tycoon John Wanamaker: “Half the money I spend on advertising is wasted. The trouble is I don't know which half.”
     Could it be that the Rochester/MIT researchers are simply advising us to pull back on ineffective marketing? Good guess, but they’re really saying something else: Their analyses indicate that if you tone down your marketing, sales may drop, but the image of your store improves among those who do buy there. The rationale is that your customers won’t accuse you of overpromising.
     A common motto for retailing is "Exceed the customer's expectations." Although fine-sounding, this motto doesn't work in practice. Each time you exceed expectations, it nudges the expectations up for the next time the customer visits. At some point, it's no longer profitable to keep raising the bar for yourself.
     Actually, the customers might not even notice if you do manage to exceed their expectations, unless the excess is dramatic. Researchers at University of Georgia and University of Southern California looked at situations where shoppers ended up feeling either somewhat better or somewhat worse about their experience than they'd expected. When shoppers' expectations were exceeded, the shoppers often took it for granted and didn't give lots of credit. It was when expectations were not met that there was more likely to be an impact on the customer’s evaluation.
     Researchers at University of South Carolina and University of Colorado-Boulder report that when purchasers find it difficult to learn to use a product, their evaluation of the product’s quality is lower. This would mean your customers feel disappointed in what you sold them. That feeling gets in way of repeat business and could result in the items being returned to you.
     Give customers realistic expectations about learning to use products you sell. The University of South Carolina/University of Colorado researchers reported that when the customer expected the product to be challenging to learn and still bought it, the lower evaluation of product quality was much less likely.
     In the sense of not overpromising, demarketing can help you sell that fat pig in a way which keeps it from being returned due to customer disenchantment.

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Tuesday, November 19, 2013

Transition Away from Transitory Bias

Sometimes shoppers feel like the retailer is picking on them. When that happens, how do the shoppers explain it to themselves? According to an exploratory study at University of South Florida-St. Petersburg, the most likely assumption is universal mistreatment—the shopkeeper treats everybody shabbily. It’s poor customer service and nothing personal.
     Another possible shopper explanation to themselves is intentional discrimination because of the particular shopper’s personal characteristics. Researchers at Clemson University and University of North Carolina-Wilmington found that discrimination against racial and ethnic minorities continues to plague retail settings.
     Some frontline retail staff who carry biases against minorities operate on the assumption that it’s only the minorities who are disturbed by discriminatory behavior. Since the prejudiced staff members decide consciously or subconsciously that they’d prefer not to do business with minorities anyway, they resist changing their behavior.
     Purge discriminatory behavior. The Clemson/North Carolina researchers found that many white shoppers became as outraged as blacks when the white shoppers observed a black customer being treated in a discriminatory way.
     But in the Florida study, a much more common explanation of feeling picked on was coined “transitory bias” by the researchers. Transitory bias is a shopper’s perception that he is being treated poorly as a reaction to something the shopper did or failed to do in the store.
     There are situations where a retailer’s brusque treatment of a consumer is fully justified because of what the consumer did. It’s okay not to treat shoplifting cordially. And one of the transitory bias triggers described by the researchers was ridicule of a restaurant server. Good riddance to ridicule! You should never allow yourself or your staff to be harassed.
     By and large, however, you’d like your shoppers to feel their presence is appreciated even when they don’t follow all the store rules. Other transitory bias triggers described by the Florida study participants included:
  • Asking questions which reveal low knowledge of the product category 
  • Declining to take recommendations given by the sales staff 
  • Making special requests of the salesperson 
  • Complaining 
  • Asking the salesperson to negotiate the price or the purchase terms 
     All those behaviors are perfectly fine in our stores, aren’t they? We’d do well to audit in ourselves and our sales staff whether any of those behaviors from a shopper consciously or subconsciously sets off a rude retailing response. If we find ourselves firing back inappropriately at a shopper, we should immediately apologize.

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Monday, November 18, 2013

Consider Voluntary Simplicity No Big Thing

How do you sell to consumers who place high importance on maintaining all possible simplicity in their purchasing? Moreover, voluntary simplifiers report higher life satisfaction than non-simplifiers, according to researchers at Université du Québec à Montréal. Why would you want to fool with that?
     My answer is you often would not. Yet there are times when you recognize a sale to the voluntary simplifier would benefit him or her. In that case, an effective tactic is to start small:
  • Researchers at University of Pennsylvania and Carnegie Mellon University identified a group of consumers who said they hated spending money beyond necessities. This group was offered the opportunity to pay extra for overnight shipping of a DVD they wanted to have. The extra cost was presented to some in the group as “a $5 fee” and to the rest as “a small $5 fee.” Those hearing the word “small” were 20% more likely to pay the fee than those not hearing that word. In contrast, there was no difference with a “$5” and “small $5” description among people who indicated on the earlier survey the opposite of voluntary simplifier tendencies. 
  • Researchers at Technical University of Lisbon and at Tilburg University in the Netherlands found that people who were hesitant about eating a food product were more likely to overcome their hesitations when presented with small packages than when presented the equivalent amount in a large package. In addition, the people who got started on the small packages ended up eating more than did those who dug into the large package. The participants had said they believed small packages would help them limit their consumption, but the opposite proved to be true. 
  • When you’ve a hesitant shopper, offer a version of the choice which you can legitimately describe as small, and then describe it to the shopper in this way. This tactic is a component of the “foot-in-the-door” technique: The salesperson makes a small request, and then, when the customer agrees, follows up with a larger request. 
     Acknowledge that your shopper views voluntary simplicity as a moral virtue. Designer/retailer Jil Sander says she prefers the term “purity” to “minimalism” in describing the trend toward voluntary simplification in clothing. “Minimalism” implies a dearth of attention to detail, but the emerging fashion is permeated with concern about getting all the details right. With the gewgaws gone, it’s much harder to hide any sloppiness.

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Sunday, November 17, 2013

Take Personal Responsibility for OOSs

When you sit down at your favorite restaurant for dinner, it’s good to be told what items on the menu aren’t available that evening. Better to have everything in stock, but if some dishes aren’t, it’s good to be told before you might make up your mind to have that one. Better to be told by the host who seats you and hands you the menu, but if not then, it’s good to be told by the server early on.
     But in many retail store situations, advising the shopper of every out-of-stock (OOS) at the start won’t work. There are too many items and too many variations of items, such as sizes and colors.
     When you tell the shopper you’re OOS after the shopper’s made a choice, is it better to pin the blame on the store (“We didn’t adequately anticipate the demand”) or blame the supply chain (“Our supplier has been slow”)?
     Tipped off by the post title above, you may have guessed store blame’s better. University of Bologna research supports that choice. The outrage about the outage will be less when the store takes personal responsibility. If the salesperson says, “I didn’t adequately anticipate….,” the shopper irritation is less yet than with, “We didn’t adequately anticipate….” For a big bonus, add, “Here’s what I’ll do to compensate you for the out-of-stock bother, and here’s what the store will do to make this less likely to happen for you and other shoppers in the future.”
     That’s not to say you and your store taking responsibility leaves the supplier unscathed. Stanford University research found that being jilted by OOS’s affects broad brand reputations. Study participants were told they could win Guess sunglasses by completing a word puzzle. Then upon trying to claim their prize, the winner was informed the supply of Guess sunglasses had been exhausted. Later in the study, the winners were asked to rate Guess wristwatches and Calvin Klein wristwatches.
     The experience of being told Guess sunglasses were OOS led to lower ratings of Guess watches and higher ratings of Calvin Klein watches.
     In these past weeks, we’ve seen apparently heartfelt mea culpas and corrective action commitments from U.S. Health and Human Services Secretary Kathleen Sebelius and from President Obama. Consumer behavior research findings would recommend that course as wise considering the Affordable Care Act out-of-service. We’ll see what the lasting effects are on the Obamacare brand.

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Saturday, November 16, 2013

Reassure Stay-At-Home Dads

In your retailing, help househusbands maintain their self-esteem.
     Researchers at Chapman University and University of Wisconsin-Madison find that stay-at-home dads often call upon themselves to fight against the lack of value traditionally accorded to domestic skills. The issue becomes of more importance to retailers because of the increase in the number of househusbands. A University of New Hampshire analysis attributes the start of the trend to the economic downturn. Since women are paid less, on average, than men, husbands were more likely to lose their jobs than were wives, and then husbands encountered more difficulty than wives in finding employment.
     The Chapman/Wisconsin researchers discovered online forums and annual conventions used by househusbands to establish legitimacy and increase their status. They want to masculinize what they do.
     This can lead to garbled communications. A tale reminding me of how is of the consumer psychologist who said to his wife, “I got the strangest message from Dean. He wants me to get together with him to go shopping for a good corn dog.”
     “Are you sure you heard that right?,” asked the wife, with understandable skepticism.
     “Yep. I listened to it twice. Maybe it’s Dean’s way of saying he’s getting together a group for the state fair. I called him back, but nobody answered.”
     Then the consumer psychologist started thinking about what goes into deciding the right price to pay for a corn dog at a state fair. Consumer psychologists’ brains get locked into those sorts of thoughts. But in this case, the reverie was interrupted by a return call from Dean, who clarified his invitation was for an outing to buy a coon dog. A traditionally more masculine pursuit than food tasting.
     Accommodate the househusband shopper. Mattel, Inc. introduced their Barbie construction set on the justified assumption that fathers are doing a considerable amount of purchasing for the family.
     People buy based in part of how well the purchase projects their desired degrees of masculinity and femininity. Classic research by a psychologist working for IBM showed how descriptions of masculinity and femininity differ from one culture to another, but. what stays the same is the drive of each type to show off their credentials.
     Researchers at University of Texas and University of Southern California observed that American consumers associate masculinity with merchandising which is disciplined, stable, and serious, and they associate femininity with merchandising which is delicate, whimsical, and changeable.

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Lure the Male Housekeeper 
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Impassion Your Shoppers

Friday, November 15, 2013

Sprout Homegrown in Healthy Foods

Chicago-based consultant Mari Gallagher, who is credited with popularizing the term “food desert,” sees more oases on the horizon, according to a National Retail Federation Stores posting.
     A food desert is a low-income community with such limitations on access to healthy foods that the residents suffer from poor nutrition. The most popular way to establish an oasis has been to persuade a large grocery retailer to build a store in the deprived community. Tax incentives and, more recently, crime control initiatives have been part of the persuasion mix.
     But having healthy food available has not panned out often enough in getting the residents to buy and prepare the offerings. One promising way to build interest is to encourage families to plant their own gardens as a family project. It’s not that what they grow in urban gardens is likely to be enough to fulfill their dietary needs. Rather, the rationale is that the projects will produce in the family members an interest in produce. The vegetables and fruits gain homegrown sentiment.
     Further, in communities where retailers of all sorts feature health benefits in their advertising and marketing, consumers are more likely to seek out healthy foods. This is the homegrown appeal from a different angle.
     And for the true homegrown advantage, acknowledge how the expectations of shoppers in low-income communities are similar to and differ from expectations of those in higher-income communities. Research findings from RTI International in North Carolina and George Washington University support what we’d expect: Low-income shoppers want cleanliness and convenience. Potential customers in low-income areas say they hesitate entering stores where there are people drinking alcohol outside, where they’d have to walk deep into the store to reach the healthy offerings, or where those offerings aren’t displayed attractively. Minimize these obstacles.
     In other ways, shoppers in low-income communities differ from those in higher-income neighborhoods. Researchers at University of North Carolina-Chapel Hill, Oregon Health and Science University, University of Massachusetts, and University of Alabama-Birmingham looked at whether having lots of Quick Service Restaurants (QSRs) in a neighborhood was related to the consumption of less healthy foods. For men in low-income neighborhoods, a higher density of QSRs was related to less healthy eating. There was no relationship for low-income women or with consumers of either gender in middle- and high-income neighborhoods.
     Consider women as homegrown agents of change and men as targets of change in food deserts.

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Quench a Thirst for Health in Food Deserts 
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Thursday, November 14, 2013

Rehearse the Shopper Picking Out the Item

If you rehearse with the shopper her selecting an unfamiliar brand, she becomes somewhat more likely to actually select the brand later for purchase. Although the effect is strongest if the shopper actually holds an item with that brand on it, the touching is not necessary for a preference to build. It’s a refinement of what consumer psychologists call “the mere familiarity effect.”
     A laboratory example of the effect was seen in a study at University of Florida, Louisiana State University, and London Business School. The study used as experimental stimuli an assortment of soda, cheese, shampoo, and chocolate brands which the researchers knew were not familiar to the participants.
     In displays of items, the participant was asked to locate a specified brand of an item category, such as a specified brand of chocolate. The task was repeated with different item categories. Then, afterwards, when the participant was asked to select between the brand of item previously located and a brand that had never been seen before, the previously located one was chosen much more often.
     That’s expected, you might say. But wait, I’m not done! In the initial location task, there were always precisely two brands of the item type. Therefore, in locating the one brand, as requested by the experimenter, the participant was neglecting another brand. The consumer was rehearsing rejection.
     What happened when, later, the participant was asked to express a preference between the previously neglected brand and a neutral brand which had not been seen before? Yes, the neutral brand was more likely to be favored.
     I’ve regularly heard from retail salespeople the observation that once a shopper has rejected selection of an item, the shopper seems resistant to changing his mind. This could be attributed to a fear of looking indecisive. However, I’ve found many exceptions, in which the shopper does have second thoughts and will end up going back to an already spurned alternative. University of Toronto research indicates one technique is to introduce an alternative which is obviously inferior to the previously rejected choice.
     In using these tactics, recognize that it’s the rehearsal of the selection and the rejection which make it work. People are more likely to do what they practice than what they’re told. If a shopper is pointedly asked not to think about a particular brand, it will be nearly impossible for that shopper to stop thinking about it.

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Raise Your Right Hand Awareness 
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Wednesday, November 13, 2013

Imply High Risk with Low-Price Sacred Goods

If the price is low, people buy. The most common reason is it seems like a good deal. Now researchers at Arizona State University and Tulane University have identified another reason: Lower prices can imply a higher risk of bad consequences if you don’t buy.
     Student participants in the study were advised to get a flu shot. Some were told the price of the inoculation was $25, while the rest were told it was $125. So that the decision to get the shot wasn’t influenced by whether the student could afford it, all were told that the fee would be reimbursed by their health insurance.
     In addition, some of the participants in each of the two groups were told it was important to get the shot in order to avoid the illness and possible lost income from missing work. The other participants in each of the two groups were given public health instead of personal health reasons: Avoid spreading the flu and burdening the economy with work absences.
     After all this setup, each participant was asked to estimate how likely it is he or she would get the flu if passing on the shot.
     Overall, those who were told the shot cost $25 judged themselves as more likely to get the flu. This was especially true for those given the personal health rather than the public health rationale.
     The researchers explain the findings this way: When it comes to goods like medications, consumers tend to figure that a lower price signifies a need for greater accessibility, and therefore a higher risk on nonuse. People are more likely to get the shot if the price is lower because it is more affordable and also because the prospect of not getting it is scarier. The impetus to action is accentuated when the individual thinks about personal risk rather than social risk.
     Medications are in a category the researchers call “sacred goods.” The rules for retailing these goods are not always the same as with other items. Research findings from University of Colorado-Boulder, Tulane University, and University of Pennsylvania give another example: Consider the retailer selling pharmaceuticals who announces special programs to allow those without adequate funds to get the drugs at a reduced fee. Most customers would consider this to be ethical. Yet if a dress shop said they’d charge less to the economically disadvantaged, many customers would consider this unfair.

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Tuesday, November 12, 2013

Prepare Your Staff to Endorse Products

Marketing Daily is reporting that consumers are trusting celebrity endorsements significantly less than they are what family and friends recommend. However, that’s not to say family and friends always come out on top. Other surveys have shown that with financial products, for example, family and friends take second place to expert and professional word-of-mouth. This is why many consumers use financial advisors.
     It’s also behind why many gamers shop at GameStop. The expert staff. Video game retailer GameStop cultivates their employees to make endorsements. This works so well because GameStop employees are selected and coached to be gaming enthusiasts. Among other things, GameStop has rental programs to allow their staff to master the games. Serious gamers come to store employees to learn the tips, traps, and tricks. When a GameStop staff member praises a game, the endorsement is coming with expertise worthy of celebrity.
     Prepare your staff to endorse products.
  • What opportunities do you provide your sales staff to thoroughly learn about each of the products and services they're selling? 
  • Aside from sales personnel, what are the roles played by others in your store operations, and what interesting tales might they have to share with shoppers? 
  • To what degree do you take the recommendations of your staff—those who purchase the merchandise, those who sell to individual consumers, those responsible for business-to-business accounts, those who handle returns, and the rest—as to what items should be pruned out of your merchandise mix because the staff would feel uncomfortable endorsing them? 
  • How do you transform your expert staff members into celebrities, such as by featuring their photos in ads, introducing them in social media materials, or even announcing their birthdays over the store speaker system? 
  • How well do you train your sales staff to redirect shoppers away from choices which appear not to be in the shopper’s best interests and toward better choices, but without the advice seeming manipulative? 
     The Marketing Daily reporting about the shortfalls of celebrity endorsements came from a Boston Consulting Group white paper titled “The Trust Advantage: How to Win with Big Data.” The paper describes how trust is earned and then points out how the advantages of shopper trust extend beyond just making the immediate sale. People who trust the retailer are willing to give out greater amounts of information helpful in future sales. BCG says that the “trust advantage” can be at least 500%.

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Accelerate Purchases with WOM 
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Monday, November 11, 2013

Speak the Language of Helpful Reviews

Researchers from Maastricht University and Louvain School of Management indicate that online comments which criticize your store or the items you carry have greater elasticity than do online comments of praise. That is, as the number of negative comments gets larger, the chances a reader will give you business decreases sharply. The slope of the increase does not go up so sharply as the amount of praise climbs.
     Also, the effects are greater when the comments use the typical linguistic style of the readers.
     Then there’s the research sponsored by Boston-based brand consultants Cone. Those studies detected a growing increase in the power of negative reviews. About 85% of respondents said they’d changed their minds about making a purchase based solely on negative information they found on the internet. This compared with about 65% saying this in the prior year’s survey.
     The Cone researchers attributed the increase in the influence of negative information to more widespread internet access. I’ll go beyond this to suggest that what we’re seeing is not so much that the shopper can access ratings as that shoppers figure their friends and family can access the ratings. Consumers are concerned that if they select a product with negative reviews online, others will think less of them. “If the people I admire discover I’m using this, I’ll fall out of favor.”
     The Maastricht/Louvain findings suggest that when the linguistic style is one’s own, the reader gets even more concerned about this social risk.
     What to do?
  • As a retailer, acknowledge negative reviews. Researchers at European University Viadrina find that when a salesperson does this, the shopper becomes more likely to trust everything the salesperson says. Keep the words and logic simple. If there’s too much complexity, shoppers won’t hook the talk of negative information to the salesperson’s credibility. 
  • Offer a liberal money-back guarantee known about and trusted by the shopper. Research findings from University of California-Berkeley and Hebrew University of Jerusalem indicate that if your store does this, negative reviews become much less important during the selling process. 
  • Once the customer makes a selection, talk about positives. But if the shopper seems to be backing off from the purchase, ease the stress, while not letting the customer leave altogether, by saying, “I suggest I help you find some of the other items you’re shopping for here today, and then we can come back to considering this decision.” 
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Negate the Social Risk of Negative Reviews 
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Sunday, November 10, 2013

Guide Shoppers on Store Tours

A Mobile Marketer post this week recommended organizing store merchandise into theme areas. That advice is consistent with the current approach to retailing as entertainment. Moreover, themes are a classic tactic in store design. Researchers at Saint Joseph’s University found the following four themes to have been especially successful over the years:
  • Foreign country. Restaurants are the most ready examples. Those featuring Mexican food look different from those serving Italian food, and when executed at the best, even different from restaurants serving Tex-Mex. 
  • Nature. Scheels and Bass Pro Shops showcase animals and landscapes. 
  • Cyberspace. The Apple Stores show off information and communications technologies. 
  • Spirituality. Spas and alternative healing centers incorporate abstract themes. 
     Under the leadership of Marvin S. Traub as chairman and chief executive officer, Bloomingdale’s mounted a series of themed promotional events which attracted both footsteps and publicity.
     Here are what, from a consumer psychology perspective, I see as important factors:
  • Care about the showmanship. Mr. Traub’s “Come to China” event included an entire Cantonese farmhouse at the flagship Manhattan store and rare Chinese decorative items at fourteen other Bloomingdale’s. Mr. Traub was indeed a retailing showman. His New York Times obituary says that when he began his career at Bloomindale’s in the 1950s, he’d pump up business by pretending to be a customer thrilled about the store merchandise. 
  • Care about the people. Have your staff dress to fit. Invite appropriate guests. At an event commemorating America’s Bicentennial year, Mr. Traub escorted Queen Elizabeth II and Prince Phillip through a display of Wedgwood china and reproductions of English antique furniture. 
  • Care about the souvenirs. Have themed items shoppers can take with them to serve as reminders of the event and of your store. Bloomingdale’s became known for designer shopping bags. One by artist Jonah Kinigstein was based on French tarot cards in red, black, and white. 
     The Mobile Marketer piece goes on to suggest that, to make the most of the themed areas, salespeople should play the role of tour guides.
     I like that metaphor: A good tour guide never answers a “Where do I find…?” question by pointing. Instead the tour guide walks the client to the place. A good tour guide realizes that even though she’s heard the same question many times before from a guest, for the guest, this may be the first time asking this question, so it deserves an enthusiastic, not labored, answer.

Click below for more: 
Theme Like You Care 
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Saturday, November 9, 2013

Brave the Realities of BRV

BRV is an acronym for Business Reference Value, a concept articulated by researchers at Georgia State University, University of North Carolina-Chapel Hill, and Texas Christian University regarding business-to-business (B2B) sales. BRV is an index of the monetary value to a retailer of a recommendation from a current business customer when seeking orders from a prospective business customer. BRV is a function of the degree of influence of the recommendation and the amount of business available from the prospect.
     To calculate BRV, the researchers gathered data from a financial services retailer and a telecommunications retailer. Blending the findings with results from other studies of B2B marketing, here are my recommendations to a broad range of retailers:
  • Give the prospective customer recommendations from only a few current customers. If you give too many, the prospect may feel a need to check them all out, delaying the purchase decision to the point where the prospect might abandon it. 
  • Use the right recommendations. Those which are most effective will come from firms matching the prospect’s characteristics. Most powerful is a match in product or service offered. Next is being in the same industry segment. Third is that the individual giving the recommendation carries out job functions in her firm similar to the functions of the individual to whom the recommendation is sent. Also important are the size of the current customer’s business and the length of the business relationship between the retailer and the current customer. The larger and the longer, the better, so if these are favorable to your case, be sure to highlight the facts to the prospect. 
  • Attend to modality and comprehensiveness. Of the methods used in the Georgia/North Carolina/Texas studies, least influential were recommendations which just invited the prospect to contact the current customer with any questions. Most effective were video testimonials. Face-to-face meetings between the prospect and the current customer were not included in the study. I’d expect these to be most effective of all. 
  • Continue to cultivate the business of referred clients. There’s only a limited relationship between BRV and CLV—Customer Lifetime Value. The proper recommendations will bring the new customer to you, but you’ll want to work to turn that new customer into a long-term shopper. 
  • When the new client signs on with you, be sure to thank the people in the business that gave the recommendation. This raises their motivation to do it again. 
Click below for more:
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Friday, November 8, 2013

Bracket to Prevent Overshot Shoppers

The best retail transaction is one in which the salesperson provides the combination of products and/or services which are just sufficient to meet the shopper’s needs and/or desires.
     Studies at University of Wisconsin–Madison, University of Melbourne, and University of New South Wales concluded that this idealized match often doesn’t occur. Instead, there is a tendency for salespeople to overshoot, going for more than is necessary. This can alienate the consumer at the time of the selling or later when the consumer feels exploited.
     The overshooting isn’t always profiteering. It might be a form of insurance. A hardware store salesperson suggests the customer buy more caulk than is needed for the job with an offer to accept back in unopened containers whatever isn’t used. A sporting goods salesperson suggests the novice golfer buy clubs to grow into rather than a set fitting the beginner status.
     The Wisconsin/Melbourne/New South Wales researchers attribute overshooting to the store’s culture. With that in mind, I suggest you maintain a store culture which favors “bracketing.” This term comes from target shooting. The procedure is to first intentionally aim a little above the bull’s-eye. The next shot aims a little below the bull’s-eye. The shooter then examines the target to see the results, and based on this, aims directly for the bull’s-eye.
     In making the sale, assess what would exceed the shopper’s needs and desires and what would fall short. Then use the results of your bracketing to make your recommendation. If what you recommend exceeds current specifications for the shopper, you and the shopper are aware why.
     To help bracket when selling multifunction products, ask the shopper to estimate how often he will be using the various functions.
     A substantial body of consumer behavior research has found that people tend to prefer products with many functions when shopping, but then, after purchase, often become frustrated while trying to master all the different functions. It’s called “feature fatigue.”
     Researchers at Washington University in St. Louis and University of South Carolina say feature fatigue crosses product categories and is most likely with shoppers who are driven to learn a large amount about a product before purchasing it, have difficulty distinguishing important from trivial capabilities of alternatives, and buy items in large part to impress others. With these consumers especially, asking for estimates of the frequency of use of the different functions can help ease later dissatisfaction.

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Thursday, November 7, 2013

Time Metaphors Until Christmas

“Secrets of Selfridges,” which premiered on PBS this last weekend, credits London retailer Harry Gordon Selfridge with popularizing the countdown chant, “Only this many shopping days until Christmas.”
     Mr. Selfridge introduced numerous innovations, most of them now commonplace in the industry: Bargain basements and bi-annual storewide sales. Cosmetics right inside the ground floor entrance. Women’s toilets—a 1909 first in British stores. But this holiday season, the countdown chant has extra import. Last year, there were 32 days between Thanksgiving and Christmas. This year, there are 26.
     To turn the time pressure to your advantage, understand how shoppers experience time. Researchers at University of Western Ontario, University of Missouri-Columbia, and University of Virginia used metaphors to describe five common patterns. Here’s my version, along with hints for the best ways to make a sale:
  • Time is a pressure cooker. 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. These consumers appreciate a salesperson who relates the individual consumer’s past needs to current purchase alternatives to future consequences. Their shopping pace is relatively leisurely. Because they can multitask, they often engage in comparison shopping. 
  • Time is a mirror. These shoppers are like “time is a map” consumers, but want more emphasis on learning from the past and less on anticipating future consequences. If they’re your regular customers, they’ll resist changing to another store. If they’re not your regular customers, they’ll need extra incentives to switch loyalty to you. 
  • Time is a river. Compared to consumers fitting one of the other orientations to time, these shoppers are more 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 and novel alternatives when at your store. Not surprising, their focus is much more on the present than on the past or future. Perhaps surprising is that they tend to be less spontaneous than the “time is a river” group. 
     By matching your salesmanship to the shopper’s time metaphors, you increase the probability of closing the deal before Christmas Day.

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Clock Customer Actions to Fit Time Metaphors 
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Wednesday, November 6, 2013

Solicit Staff Suggestions Selectively

Convince your employees you welcome suggestions about improving store operations, but inquire selectively:
  • Select staff with a commitment to continue. Researchers at University of Houston and King's College London found that, on average, staff become more willing to share valuable ideas when the owner or operators of the store attend to employee complaints. However, this was not true with employees whose complaints had led them to want to quit. A common human resource management practice is to conduct exit interviews with departing employees. The research indicates that exit interviews in a retail setting might be good at identifying reasons for employee turnover, but not for obtaining ideas for improving store operations in other ways. 
  • Select when you ask. Researchers from Cornell University, University of Texas-Austin, and Penn State explored what gets in the way of employees frequently volunteering ideas for improvements. The most common motivation for withholding was that the employees believed sharing would be a waste of their limited time. They’d not seen sufficient evidence that managers seriously consider the suggestions. Therefore ask your people for suggestions only when you’re ready to make changes. 
  • Select what you ask about. About four out of ten of the respondents in the Cornell/Texas/Penn survey said they are quite open about sharing when they conclude it won’t be futile, but consciously withhold information about other topics. Employees, being people, want to protect their privacy and want to choose when to tell you what. Start with questions which are not sensitive. Introduce intrusive questions in the form, “May I ask you….?” 
  • Select out the generalized. Ask your staff for advice, not for opinions or expectations. Advice questions are of the form, “What items of advice do you have for our store?” Opinion items are of the form, “What are your opinions about our store?” Expectations questions are of the form, “What are your expectations of our store?” Researchers at University of California-San Diego and Northwestern University found that expectations questions distanced the informant from interest in the fortunes of the business. Advice questions gave rise to happiness at prospects for the store’s success. 
     It’s worth your trouble to be selective in these ways. Throughout their workdays, frontline employees hear what shoppers say and watch what shoppers actually end up doing. Back office employees can spot the trends and the important exceptions to trends while compiling reports you review only in a summarized form.

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Tuesday, November 5, 2013

Note Familiarity for Adjacency Effects

The shopper’s judgments of the quality and price of an item depend on what surrounds the item on the shelf. Researchers at University of North Carolina, University of Pennsylvania, and Duke University explored the results of consumers being exposed to multiple brands in situations where the selection of an item did not hold high importance for the consumer. Such a purchase might be laundry detergent rather than perfume, for example.
     In these situations, the person was most likely to select an item if the surrounding brands had different brand personalities from the item selected.
     The most commonly accepted classification of brand personality was devised by researchers at University of California-Los Angeles:
  • Sincere. Down-to-earth, honest, wholesome, cheerful 
  • Exciting. Daring, spirited, imaginative, up-to-date 
  • Competent. Reliable, intelligent, successful 
  • Sophisticated. Upper class, charming 
  • Rugged. Outdoorsy, tough 
     Therefore, if it would fulfill both customers’ and your objectives to have a particular brand selected, aim to have the personality of that brand stand out from the personalities of the others. Surround the sincere, competent brand with exciting, sophisticated brands, for instance.
     The effectiveness of this does depend on shoppers being familiar enough with the brands to have formed personality associations. In another set of studies, the degree of familiarity played a part in pricing perceptions.
     Researchers at Singapore Management University and Korea University showed consumers pictures of car models. Then each participant was asked to estimate for one of the car models the relative expense. “How expensive is this car compared to the prices of all car models a person could buy?”
  • When the model was previously completely unknown to the participant, the product adjacencies had an assimilation effect. That is, if the adjacent set consisted of expensive cars, the participant’s guess was that the previously unknown model was expensive. And if the surrounding set consisted of inexpensive cars, the participant’s estimate was a relatively low figure. 
  • When the car model was familiar to the subject, but the participant considered himself a novice regarding cars, there was a contrast effect. That is, if the overall set was of expensive cars, the price estimate for the familiar car got lower. When the overall set was of inexpensive cars, the price estimate for the familiar car got higher. 
  • Participants who were familiar with both cars in general and with the specific model shown to them were not influenced much by the price images of the adjacent cars. 
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Monday, November 4, 2013

Profit from Polarization

A decade ago, Chrysler Group—the company selling the Dodge Ram truck—paid for a marketing campaign that included hate mail about Dodge Ram drivers.
     The campaign’s designers set up a website on which was posted a video of a drag race won by a Dodge Ram. There was no mention of the name, only images of the distinctive grill design. The impression from looking at the site was that it was designed by and intended for fans of the Dodge Ram. In fact, though, it had been set up by a guerrilla marketing team.
     Next, the team starting sending letters to newspaper editors bemoaning the increase in drag racing and blaming Dodge Ram drivers for it. The letters carried the names of individuals, but had been written by the team.
     This produced spontaneous statements of praise about the truck and its owners from consumers unaware of the ruse. The praise was for upholding the principle of the open road.
     The outcome was positive for the Dodge Ram.
     Researchers at Temple University, Arizona State University, and University of Munich analyze more recent examples of brand opinion controversy and suggest tactics for profiting from the polarization. They start by pointing out how two top polarized brands are McDonald’s (33% of consumers love it, while 29% hate it) and Starbucks (30% love it and 23% hate it).
     Here’s my adaptation of the Temple/Arizona/Munich tactics for use by the small to midsize retail business:
  • Trumpet the controversy. That’s what Chrysler Group did. Along the same lines, a 2011 Miracle Whip campaign urged consumers to take a stand, posting either their love (“…not fancy-dancy elite….”) or hate (“…spreadable disappointment….”) on YouTube and Facebook. Sales of Miracle Whip increased 14%. How might you use a “Love us or hate us” angle in your store’s marketing? 
  • Segment the haters. Among those who hate McDonald’s are parents concerned about the temptations from the toys and the fat in the food. Yet, from the retailer’s perspective, the trinkets and the tastiness draw dollars. One alternative is to have an additional line of items which are toy-free and low-fat. 
  • Publicly ease the controversy. Win over haters by soliciting their suggestions for improving your store operations. Maybe they’ve helpful ideas you can implement. When you do implement one or more of the ideas, advertise it widely. You can earn good will by showing you want to be your best. 
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Arouse Lovers by Flaunting Haters 
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Sunday, November 3, 2013

Cojoin the Stages of Coproduction

In some sales, you’re asking the shopper to coproduce the item with you by selecting options before purchase or assembling the components into a bespoke design after purchase. A range of studies over the years has found evidence that these types of consumer coproduction can increase customer satisfaction with the item. Attraction to the store or website where the purchase was completed also rises.
     University of Miami and University of Florida findings indicate that for best results, the customization decisions and the assembly tasks should be perceived by the consumer as a continuous process. In fact, when the two were segregated steps, the purchasers tended to find the assembly process unpleasant. In these circumstances, the greater the assembly effort, the greater the dissatisfaction.
     On the other hand, when the customization decisions and construction tasks were conducted as an integrated process, the customer tended to become involved in the assembly as a creative endeavor. Here, more assembly effort led to higher appreciation.
     Researchers at Norwegian School of Economics found that when consumers prepared a meal themselves rather than having it prepared for them, the evaluation both of the meal and of the raw ingredients climbed. Not only that, but the consumers’ reports of the degree of saltiness and spiciness they preferred in a meal changed toward whatever the level of saltiness and spiciness were in the meal they had prepared. These consumers were giving themselves reasons to savor what they’d created.
     Cojoined coproduction goes beyond customization to become personalization, in that personalization takes into account the characteristics of the particular individual. This applies to items the shopper selects for herself as well as to gifts selected for others. Personalization requires the shopper to think in depth about the recipient and so enables presentation of the gift in an especially meaningful way. This dynamic holds true for more than adults. People like to personalize for the children and even for pets they love.
     The more time and mental effort the gift giver devotes to the personalizing, the more that gift shopper will be willing to pay for the item. University of Colorado, Florida State University, and Indiana University researchers say this is because a shopper places value on his time and effort. Therefore, for cojoined coproduction, limit your design support. If asked, “What should I pick?,” give as a first answer, “Well, you know the recipient better than I do.”

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

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Saturday, November 2, 2013

Experiment with Discounts

Women’s Wear Daily is reporting how J.C. Penny Co. Inc. is moving back from the Ron Johnson changes. Discount coupons will, as in the pre-Johnson reign, be abundantly distributed.
     Coupons do attract customers, especially when closely targeted to the shopper’s purchasing predispositions. It’s true that it will spook consumers if you use overly fine targeting. A good example of that comes from, appropriately enough, Target Corporation. When Target used its pregnancy prediction model to send coupons for maternity clothing, baby clothes, and nursery furniture to a high school girl, it initially ticked off and soon afterwards tipped off her father.
     According to a 2012 New York Times feature, Target’s solution has been to accompany the pregnancy coupons with ones for unrelated products, like a lawn mower and wine glasses.
     Now, Forbes says that grocery retailer Kroger is also intentionally including in marketing mailings assorted coupons for items unrelated to what the Big Data predictive analytics guess the recipient of the coupons would want to purchase next. But the reason is different than for Target: Kroger wants to discover more about their shoppers than the Big Data predictive analytics have already determined. In the best traditions of both science and retailing, Kroger is experimenting.
     Among those discoveries is that discount coupons for brands the shopper is already buying increase the probability of subsequent purchase.
     Why would you, as a retailer, want to give a discount to a customer on a product he’s already interested in buying? One reason is that the person might not have purchased the item for a long time. The coupon accelerates the transaction.
     Another reason is that shoppers enjoy pleasant surprises. Consumer behavior researchers at University of Arizona, Arizona State University, and University of Pennsylvania found that just such a practice, used with care, can end up building your profits.
     Customers who are grateful to you will buy more from you, and nothing brings out gratitude more than finding a surprisingly low price on an item the customers had already intended to buy. They’ll buy more from you over time, and they’ll also spend more than they’d originally planned to spend during the shopping trip where they found the surprise special.
     Such discoveries from experimenting with discounts may seem obvious after the fact. But until you try out the variations and carefully analyze what happens and why, those profit-making truths can stay hidden in plain sight.

Click below for more: 
Wean Consumers Off Coupons by Force Feeding 
Accelerate Purchases with WOM 
Entertain Exceptions to Discounting Rules

Friday, November 1, 2013

Wash Your Hands of the Endowment Effect

The “endowment effect” refers to people placing a higher value on objects they own than equivalent objects that they do not. Among other consumer behaviors, it helps explain why people resist selling used items at a price others will find attractive and why people hesitate tossing foods with an expiration date from last week when they wouldn’t eat the same food at a friend’s house if the expiration date had passed.
     The endowment effect is set off when the purchaser takes physical possession of the product. In a bricks-and-mortar store, this often occurs before the customer pays for the product, as she grasps the product to place it in the shopping cart or as he carries it to the cash/wrap.
     With ecommerce—and with phone and mail orders—the purchase occurs before physical possession. Researchers at California State University-Sacramento found that when a direct marketing customer has confirmation of payment and shipment, there are signs of the endowment effect, but it is not at its strongest until the customer is holding the product.
     It’s natural to think about the customer experiencing the endowment effect and about it applying to physical goods. What about the retailer experiencing it, and what about virtual goods, such as ebooks, ring tones, and online video games? What, if anything, should you charge the purchaser for the rights to loan that virtual good to someone else? What fee structure should you set for resale by the customer? Unlike with physical goods—such as a hardcover book—the physical characteristics of the goods don’t suffer from being a used item. In fact, if you’ve provided upgrades, the value may be even greater.
     Researchers at University of Vienna came across a novel method to ease bias from the endowment effect for both retailers and shoppers, for both physical goods and virtual goods. That method is hand washing.
     The researchers asked groups of study participants to consider exchanging an owned product for another item which was of objectively equivalent value. The endowment effect would cause the participants to overvalue the owned item, and so decline the opportunity to trade.
     Those who washed their hands were twice as likely to do the exchange as those who didn’t wash their hands.
     The researchers present this finding as another example of how attitudes of consumers and retailers are strongly influenced by mental representations of physical actions. Psychologists call it “embedded cognition.”

Click below for more: 
Reconfigure Your Own Endowment Effect 
Empathize to Ease the Endowment Effect 
Push Shopping Baskets’ Pull for Sweet Items