Monday, December 29, 2014

Color Me Scared Blue

Life insurance sales professionals regularly bring up to prospects the rather frightening possibility that the prospects could die at any time. In certain circumstances, there are many other sorts of retailers who can make a sale more likely by arousing in the customer a sense of fear—fear about the consequences of not making the purchase or buying into the course of action we’re proposing. Fear has also been identified by University of Pennsylvania researchers as one of the top emotions—outrage being the other—which motivate consumers to distribute shopping advice via social media.
     The words you use in the fear appeal make a difference. Raise enough fear of a real danger to win the customer’s attention and motivate action, but 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 the shopper doesn’t see a way out, the shopper becomes defensive and starts thinking about why they don’t need the item you’re wanting to sell them. Or if they do end up making the purchase, chances are they’ll associate painful emotions with your store, making it less likely they’ll come back again.
     The colors you choose also have an effect. Studies at Vrije Universiteit Brussel found that a background of blue in ads, signage, and promotional materials employing fear appeals will work especially well in arousing in the viewer feelings that the threat can affect them personally and is worth attending to.
     When first learning of this research finding, I was surprised. In consumer research, blue is associated with leisurely, deliberative shopping. People prefer ads with a backdrop of blue to those with a backdrop of red. American Express named its credit card Blue because their market research showed the color was associated with positive feelings about the future.
     Upon further reflection, the finding does make sense to me. Blue provides that patina of optimism which keeps the fear in the sales pitch from overwhelming the prospective customer. Even then, the Vrije Universiteit Brussel color recommendation holds only for relatively low threats. With high-threat messages, people pay only limited attention to the background color.
     For high-threat pitches, have the shopper relax, without inducing big pressure to make the consumption decision, and complete the sale in steps rather than deciding it all has to happen at once.

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

Click below for more: 
Scare Customers into Buying 
Arouse Emotions to Drive Online Sharing 
Craft Fear Appeals 
Exercise Cultural Sensitivity in Color Use 
Call for Scrutiny of Groundless Fears 
Stop Threatening My Buds

Monday, December 22, 2014

Ascertain Motivations for Shopper Habits

Georgia State University researchers find that repeat purchasing is only one among a group of habits consumers can form in interactions with retailers. Others include the rituals a person follows when seeking low-margin items, buying an item offered at a discount, and returning products.
     Nourish the in-store habits which create purchase opportunities benefitting both the shopper and you. To maintain good will with your customers, tolerate the other habits and rituals which do little or no harm.
     Shopper habits may become rigid rituals. Some are deep-seated in the personality because they were introduced early in life as the child watched peers shop and was coached by parents and by merchants the child trusted. In other cases, the rituals came before the habits, having their origins pre-birth as they were hardwired during development inside the womb.
     At the other extreme are habits exercised consciously by the shopper in ways that could undercut your profitability. Ascertain motivations for the habits:
     As the shopkeeper spots the ten-year-old boy coming in the door, he says to a customer, “I know this is the first time you’ve been in my store. I want you to see probably the dumbest kid you will ever encounter in your life.”
     While the customer watches, the shopkeeper opens the cash register, takes out some money, places a dollar bill in one open palm and two quarters in the other, and says to the kid, “Okay, which do you want?”
     The boy hesitates for a moment before pointing to the hand with the two quarters. The shopkeeper shakes his head, chuckles, hands him the coins, and returns the dollar bill to the register. The boy picks up items from the shelves, comes to the counter, plunks down the two quarters, and pulls more coins out of his pocket to pay for the rest that’s due.
     This entire episode without the kid saying one word. Nothing.
     The customer who’d watched all this is intrigued. She quickly makes her purchase and follows the boy out the door. When they’re both outside, she asks, “I’m wondering, why’d you choose two quarters instead of the dollar bill?”
     “The day I take the dollar, that’s the day I stop getting fifty cents every time I come by.”
     That kid was far from dumb. The shopkeeper was on to something, too, even if not realizing it consciously. The boy had become a reliable repeat customer.

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

Click below for more: 
Nourish Good Shopper Rituals 
Nudge Shoppers Toward Profitable Habits 
Acknowledge Inertia in Consumer Behavior 
Lead Your Customers Through Changes Gradually 
Turn Customer Habits Into Rituals

Monday, December 15, 2014

Dimension Your Approach to Customer Culture


In 1980, social psychologist Geert Hofstede began publishing analyses of consumer cultures, based upon responses to more than 100,000 surveys he administered in dozens of countries. Over succeeding years, his conclusions have provided guidance for retailers wanting to sell to shoppers raised under different values systems.
     Prof. Hofstede said that four major dimensions distinguish cultures:
  • Power distance. “Power” refers to the degree of influence people have over others. “Distance belief” refers to the degree to which a consumer accepts there are wide differences in the amount of power possessed by people the consumer knows about. When a shopper believes that there are broad differences in the distribution of power, they become less likely to impulsively purchase products like candy bars. These are the sorts of products others might criticize, and the shoppers yield to the assumed power of others. This doesn’t hold true with impulsive purchases of granola bars, which could be viewed as healthy rather than indulgent. 
  • Uncertainty avoidance. Some cultures avoid ambiguity, while others embrace it, and most are somewhere in-between. Superstitions are especially likely to influence consumers who avoid uncertainty. Differentiate between consumers who do things like carry good luck charms and those who believe in the power of fate or karma regardless of what lucky charms they're packing. For those who respect karma, show extra perseverance in resolving service complaints. The other type of superstitious consumer will become a fan if you pair positive shopping experiences with a reminder tchotchke, like a small item carrying your store logo. 
  • Masculinity/femininity. For shoppers from cultures enforcing strict distinctions among sex roles, pay attention to who does what in the purchase. There are broad individual differences among male shoppers and among female shoppers, but overall, men shoppers are more purpose-driven, while women are more possibilities-driven. 
  • Individualism/collectivism. Consumers with backgrounds in collectivist cultures, like those in many Asian and Pacific Island areas, Greece, and Portugal, are more likely to embrace social responsibility than those who identify with individualist cultures such as America, Great Britain, Canada, and the Netherlands. People who identify with individualistic cultures welcome more rapid changes than do consumers who identify with collectivist cultures. 
     A recent statistically sophisticated study across 36 countries by researchers at California State University-Northridge, University of Cincinnati, and University of Washington concludes that the last of the four dimensions—individualism/collectivism—has an effect 71% greater on customer relationship marketing than the other three.

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

Click below for more: 
Yield to Power Distance Belief 
Ease On Through Election Uncertainty 
Trace Who Does What in the Purchase 
Cultivate Controversy Carefully 
Sell Product Families 
Change Up How You Do Business 
Reassure Stay-At-Home Dads 
Secret the Customer’s Confidences 
Cross Channels with Market Mavens

Monday, December 8, 2014

Absolve Maximizers of Solely Absolutes

Consumer psychologists distinguish between “maximizers,” who want to choose the best possible alternative, and “satisficers,” who are pleased to settle for what’s good enough. Wise retailers also make this distinction, since it determines how to make the sale. Moreover, wise retailers realize the distinction isn’t always straightforward. Maximizers are usually willing to pay more money than satisficers and to spend more time deciding. But some maximizers are bargain hunters, searching for a deal on the very best. Other maximizers are happy to pay top dollar if they can depend on a trusted salesperson to quickly point them toward perfection.
     Researchers at Virginia Tech and University of Michigan showed that another complication arises from how maximizers define “the very best.” One group of shoppers were asked to express their degree of preference for an item rated 60 on a 100-point scale when all the available alternatives are rated at no higher than 50. For another group of shoppers, the focus item was rated at 80 and the alternatives topped out at a rating of 95.
     It might seem that the maximizers in the “80 versus 95” group would express a stronger preference for their focus item than did the maximizers in the “60 versus 50” group. But it turned out the other way around. Maximizers pay attention to relative ratings in addition to absolute ratings.
     Maximizers are perfectionist shoppers, and perfectionist shoppers are a nuisance for retailers. They can consume an abundance of your time to conclude a sale and then might return an item or resist paying for a service because their unrealistic expectations were not fulfilled.
     There’s a large genetic component in perfectionism. A person’s environment—the strictness of a parent’s standards, the reactions of bosses to errors on the job—shape the personality trait. But a larger determination comes from what you’re born with. When considering a purchase, people will gather information until they reach a point where the effort to gather more information isn’t worth it to them because of the weight of evidence they’ve already gathered. For maximizers, this balance point is substantially higher than it is for satisficers. When you’re selling to a family of maximizers, be ready to keep feeding more information and to host a series of visits to the store.
     Because of the genetic component, perfectionism is challenging to change. Work around perfectionism by how you present comparison choices to maximizers.

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

Click below for more: 
Perfect Your Salesmanship for Perfectionists 
Attend to Genetic Influences in Selling 
De-Stress from the Distress of Perfectionism

Monday, December 1, 2014

Stimulate Innovation via Single Units Now

Want shoppers to try out a new brand? Offer single-unit instead of multiple-unit packages of all items in that product category. For instance, the customer who buys the double-pack of their favorite mouthwash is less likely to also buy a heavily-discounted new brand than the customer who buys the single pack.
     “Well, of course,” you might say. If you’ve bought two bottles, you’ve got yourself covered—and feel less need to keep your mouth covered—for a longer time into the future. Why spend money on an additional bottle?
     But that’s not the whole explanation. Researchers at Northwestern University, INSEAD-Singapore, Universidad Torcuato Di Tella, and Fundação Getúlio Vargas offered study participants a choice of two cans of soda. For some, the participant was asked to select either a Coke or a Sprite, and then asked to choose an additional can of either Coke or Sprite. The other participants were invited to choose once from two-can packages—either a Coke/Coke, Sprite/Sprite, or Coke/Sprite. Those choosing one at a time were twice as likely to select one of each brand than those who selected the two-pack. They were more open to innovating, even among those participants who said they liked one of the two brands more than the other.
     When you base your store practices on consumer psychology findings, you’ve the advantage of knowing why it works instead of only what works. That allows you to sidestep misapplication of your successes. You see, when the choice of a set is spread over time, it’s the multiple-unit alternative which produces more variety-seeking..
     Carnegie Mellon University students were offered a bonus treat in their economics or history class: They could select snacks to be given to them at the end of three successive class sessions. The choices included Snickers bars, Oreo cookies, milk chocolate with almonds, tortilla chips, peanuts, and cheese-peanut butter crackers.
     Half the number of participants were invited to choose one item on each of the three weeks. At each session, they weren’t told if there would be additional opportunities to choose in future classes. The other participants were told that in the first class session they were to select the treat they wanted for each of three classes in advance.
     In the one-at-a-time, single-unit group, only 8% chose three different items. Among those selecting three items as a bundle, 45% went for three different items.
     These consumers feared boredom.

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

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See Through Consumers’ Boredom Fears 
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Monday, November 24, 2014

Eclipse Celebrity Endorsers Who Moon

One meaning of the word “eclipse” is to make something less important or popular. I’ll use the word in that sense when pointing out how having a celebrity endorser who pulls down their pants in order to moon the crowd—or does something else scandalous—can hurt your store image. You’ll want to dissociate yourself from such behavior and such celebrities.
     Research findings from University of Technology-Sydney, HEC Montréal, and Avon Canada Inc. document the extent of possible damage: A scandal involving a celebrity endorser for a store competing with yours in a similar market can have carryover effects to your store. This argues for communities of merchants encouraging each other to exercise caution when selecting celebrity endorsers. It can be better to develop your store staff as endorsers or, if you want sports celebrity, to have a team rather than an individual.
     There’s an important exception in all this: The ability of the celebrity to violate expectations might be what shoppers consider to be attractive. This argues for using edgy celebrities and for featuring the edginess in ads.
     Another meaning of “eclipse” is to emphasize one thing at the expense of another. I’ve that meaning in mind when talking about a research study from University of Adelaide and Macquarie University. The danger of celebrity endorsements pointed out in these studies is when your audience will be so taken with the celebrity, they’ll forget about who the endorsement is for.
     The researchers found that when viewers of an ad knew the celebrity well and felt an attachment, there was little chance the celebrity would eclipse the brand. However, with lesser-known celebrities—who might be used by small to midsize retailers because of the lower endorsement fees—it’s important to keep the major emphasis on your store brand.
     Attract attention with the celebrity, show how what the celebrity says is logically linked to the benefits of shopping with you, and then stay with talking about your store for the rest of the ad. Research finds that celebrity ads are weaker if you start by showing the brand and end by showing the celebrity.
     The degree of danger with this one depends on the fit between the personality of your store and the personality of the celebrity. If the fit is very high, the danger grows. It also grows with a low fit, since the incongruity draws attention toward the endorser.

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

Click below for more: 
Select Celebrity Endorsers Who Fit 
Take Stock of Celebrity Endorsement Value 
Tease with Incongruities 
Get Endorsements from Groups 
Prepare Your Staff to Endorse Products

Monday, November 17, 2014

Modify Feature/Feasibility Mix to Match Mood

A happy, confident shopper behaves differently from a sad, confused shopper. That fact was shown in a research study based at Hong Kong University of Science and Technology and Chinese University of Hong Kong, a study which refined a classic finding in consumer psychology.
     The classic finding is that when people are shopping for items to be used some time from now, they'll pay special attention to the number and distinctiveness of the items’ features. But when consumers plan to put the item to work soon, they're especially interested in ease of use.
     This newer research concludes that how this operates depends on the shopper’s mood. If the shopper’s objective is to make a carefully considered purchase decision, the classic finding holds more strongly for happy shoppers than for sad shoppers. However, if the shopper’s objective is to make a quick decision, the classic finding holds more strongly for sad than for happy shoppers.
     Other researchers looking at this issue suggest that with high-confidence shoppers, you describe the overall and longer-term benefits of the product or service you’d like the shopper to buy. If it’s a health club membership, these high-level benefits could include the possibilities of a longer life and relief from physical pain. By contrast, with low-confidence shoppers, the benefits of interest could center on items like the ease of getting to the health club.
     For a product like a big screen TV, the high-level benefits could be the ability of the family to enjoy programs together, while the low-level benefits could be the ease of operation.
     In some cases, you can guess how soon a shopper plans to start using the purchase. Certain items are likely to be last-minute searches. Floral bouquets and hot water heaters come to mind. With these, you don't need to depend on sales staff contact to get the message across. In your advertising and signage, you could feature ease of delivery, ease of installation, ease of learning, and other angles on ease of use.
     With other purchases, it pays to ask shoppers how soon they plan to start using what they’re considering. Knowing this allows you to present the most compelling balance between desirability and feasibility benefits, between the emotional appeal and the objective assessment. You don't have time to tell the prospect everything. Home in on what will make a sale which benefits both the purchaser and your bottom line.

Click below for more: 
Satisfy Sad Shoppers with Prompt Rewards 
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Present High-Level Benefits to the Confident 
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Emphasize the Price to Spotlight Functionality

Monday, November 10, 2014

Retail Politics

I’ve been walking precincts since Lyndon Baines Johnson ran for president. I knock on doors, announce my intentions to make a case for the candidate or issue I’m favoring, ask to leave a brochure, offer to answer questions, engage voters willing to be engaged, and afterwards be on my way.
     I enjoy precinct walking because it’s retail politics—making a pitch to voters one-to-one or one-to-family and keeping the pitch local. For the last couple of months, the three campaign signs in my front yard were all for school board and city council candidates, not for the statewide or federal races. My only walking this election season was for Curtis Hunt, whom I wanted to retain his seat on the Vacaville, California city council. Retail politics is a logical counterpart to my particular interest in the success of small to midsize locally-based retail businesses.
     I also enjoy precinct walking because it’s an opportunity to explore consumer psychology. With that in mind, I decided to conduct a little experiment this time: I alternated house-to-house between two ways of greeting those who opened their door:
  • “Hello, I’m campaigning for Curtis Hunt for city council. May I leave a brochure and answer any questions you have about Curtis?” 
  • “Hello, I’m volunteering for Curtis Hunt for city council. May I leave a brochure and answer any questions you have about Curtis?” 
     The responsiveness was noticeably better when I said I was volunteering rather than campaigning. I believe that’s because in my retailing my politics, “volunteering” communicated more personal commitment than did “campaigning,” and consumers value personal commitment in a seller.
     Another extension of my retailing my politics to retailing generally has to do with the value in screening prospects. Curtis gave me a list of likely voters’ addresses. But I screened further. When I saw a small sign reading “No Soliciting,” I rang the doorbell anyway, and it ended up being one of my most satisfying interchanges. When I’d see one of those signs that reads something like, “No Soliciting. We’ve found Jesus. We’ve plenty of insurance. We know who we’re voting for.”, I’d leave a door hanger campaign piece and move on. When I encountered a “No Soliciting. Dangerous Dog.” sign while hearing the sounds of barking and some large creature hurling itself against the front door, I moved on even more quickly.
     The end of the story: Curtis did win reelection.

Click below for more: 
Lift Up Your Local Community 
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Monday, November 3, 2014

Show Devoted Customers How to Get Lucky

Customers who believe they’ve gone above and beyond to patronize your store feel luckier when shopping with you. Studies at Ohio State University and Vanderbilt University find that these extra-effort shoppers show a special interest in games of chance, such as sweepstakes and random rewards.
     Other research finds that a shopper’s belief they’ve made an extra effort can arise in a variety of ways:
  • Shopping with you at high frequency 
  • Driving a longer distance to shop with you 
  • Selecting an item with plans to use it in the future rather than now 
  • Choosing an item for use by somebody else 
  • Shopping with children in tow 
     If you’ve many shoppers like these, consider engaging them with game formats. People have always loved to play games used as sales promotions. Scratch-off discounts. Sweepstakes. “Design our new logo” or “Name our new service” or “Tell us in 25 words or less why you shop at our store.”
     In the early days, before it was called gamification, retailers and manufacturers concluded that there needed to be real, tangible prizes for maximum participant involvement, although the value of the prizes often could be quite modest. People got involved for the joy of the contest.
     More recently, marketers realized that no extrinsic reward is needed if the excitement of the game is sufficient, as happens with shoppers who are feeling lucky. This love of the game blossomed with the popularity of desktop computers and then the sorts of mobile and desktop devices shoppers use for ecommerce. The word “gaming” morphed from serving as a euphemism for “gambling” into a shorthand for “playing games on a computerized gadget.”
     With customer loyalty programs, the reward could be promotion to the next level—a concept quite familiar to those who play online games.
     Here are some tips for maintaining multitier loyalty programs, based on experimental research findings and retailer experiences:
  • For movement to the next level, set thresholds which are out of grasp, but within reach. 
  • Provide lots of ways to earn credits for movement to the next level. Referring a friend earns points. “Get extra credit for coming to special event sales, even if you end up purchasing nothing.” The objective is to maintain momentum and a sense of achievability. 
  • Set thresholds on the basis of continuing activity, not lifetime activity with you. Maintain purchasing motivation by requiring ongoing actions in order to receive the elite benefits. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, October 27, 2014

Mix or Match to Affect Perceived Duration

Retailers who sell experiences—a positive experience such as a day at the amusement park or a necessarily less pleasant experience such as a root canal in the dentist’s chair—can influence how long the consumer perceives the experience to last.
     The tool to use is categorization. Researchers at University of Chicago and New York University find that when we group the different parts of the experience into categories, it makes the whole experience seem shorter. When we unbundle the components, the total experience seems longer.
     The amusement park retailer could make a day at the park seem longer by emphasizing individual components rather than categorizing them. A guide brochure to the park would point out the mix of rides, games, eateries, and restrooms in each area. A listing of all the attractions in each category could be provided in the brochure for the visitor’s convenience, but the visitor would be encouraged to move among a variety of types of experience. The tour operator who wants the trip to seem like the customer is getting more for the money would intersperse music events, historical stops, and sporting events on the schedule rather than group the different types together.
     On the other hand, the dentist could begin by describing to the patient the three major stages of the procedure, let’s say, and then, as each of the individual steps is undertaken, refer to it being a part of the first, second, or third stage. This will help the patient to perceive the entire procedure as shorter.
     All of this happens at a subconscious level. That’s important to keep in mind because the rules get reversed if the consumer starts focusing on the actual duration. Researchers at University of Toronto found that being told how long a bad experience will last makes it seem less tolerable.
     In this situation, encourage the consumer to unpack the time estimates, guessing on their own how long each step will take for them rather than only accept a time for the total given by somebody else.
     The reason this works is that we don’t like to spend time on unpleasant tasks, so we tend to predict we’ll get them done quickly. It operates the other way around for a list of experiences a consumer finds pleasant. Here, when the time estimates are unpacked, the total predicted duration grows. The customer thinks it will take longer.

Click below for more: 
Stick It to Shoppers with In-Store Experiences 
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Extract Uncertainty When Pulling Teeth 
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Unpack Unpleasant Experience Time Estimates 

Monday, October 20, 2014

Flex Shoppers with the Complex

Consumers often seek simplicity, but the right level of complexity can engage them in ways which move them toward becoming purchasers. Researchers at University of London, University of Groningen, and Università della Calabria found this to be true with logos. When a store or brand logo was easier to perceive, people liked it better at first. However, with repeated exposures to the logo, the attraction turned to dislike. The simplicity became boring.
     On the other hand, when the meaning of the logo was challenging to discern, people didn’t like it as much at the start, but grew to especially like it with repeated exposures.
     In the documentary “Milton Glaser: Inform & Delight,” Mr. Glaser attributes the success of his “I ♥ NY” logo to what he calls “sustained mystery,” whereby a consumer absorbs the design message better because of needing to figure out what the design means.
     Research findings from Indiana University and University of Colorado-Boulder indicate the value of a mystery ad format, in which you wait until the end to announce the retailer’s name. Start off with an unusual story or absurd humor that dramatizes the category of retailer, but hooks the ad’s viewer or listener into thinking “Who’s this commercial for, anyway?”
     Consumers tolerate perceptual complexity if they consider the task important. University of Florida and University of Pennsylvania researchers assigned study participants to select among airline flights. Some were told the decision was important. The others were told the decision was relatively unimportant. And some members of each group were given the information in a way that was hard to read, while the remainder were given easy-to-read information. The hard-to-read text used a small font and little contrast between the text and the background. The easy-to-read text used a larger font and clear contrast.
     Those in the first group presented the hard-to-read text made more careful decisions.
     Researchers at University of Pennsylvania and Columbia University found circumstances in which retailers do well to actually complicate choice. Among these are purchase decisions the consumer considers as having potentially life-changing consequences. Some of these situations, such as buying a house, extend over time. Others, such as selecting funeral arrangements, could last no more than a day or two.
     Because of the significance of such choices, the consumer believes they should devote time and mental effort even if the process seems at first to constitute a straightforward selection.

Click below for more: 
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Monday, October 13, 2014

Retire Hopes for Unitary Retirement Marketing

Many retailers have recognized the lucrative opportunities in marketing to older shoppers. The largest single age cohort among American consumers is those age 65 and over. But determining the sales hooks for these consumers has proven to be tougher than anticipated. Where a limited set of approaches can work well for younger cohorts, such as Millennials, one size is far from fitting all when it comes to seniors.
      Researchers at Germany’s Technische Universität München set out to discover why. The answers had to do with cognitive age and item categories. “Cognitive age” refers to how old the shopper feels rather than how old the shopper is by calendar measure. Unlike younger consumers, who tend to identify themselves by calendar age, the seniors in a specific age cohort can differ widely in how old they feel.
     Retailers can benefit from noticing who accompanies the older shopper and how the older shopper interacts with the companions. If the senior citizen is accompanied by those who are clearly younger and the senior citizen defers to their judgment, this shopper likely has a higher cognitive age. As another example, if the older shopper is accompanied by those who appear to be of similar age and is participating actively in purchase decisions, the cognitive age is probably lower, and the shopper may be more interested in item categories targeted to somewhat younger customers.
      A lower cognitive age doesn’t mean rejection of retirement labels, though. In fact, there is likely to be greater acceptance. In the TUM research, retirees who were close friends with other retirees and had changed their buying habits when retiring were especially likely to respond to offers of senior discounts and the use of “senior” in item descriptions, such as “educational classes for seniors.”
     Researchers at Ghent University and Vlerick Leuven Gent Management School had consumers, all at least age 40, evaluate the attractiveness of various labels for older shoppers. The research participants were quite comfortable with “50+,” “senior,” and “retired.” Any of these three would usually be good for you to feature in advertising, signage, product packaging, and personal selling addressed to this important older target market.
     However, there was an important exception: Respondents approaching age 50 or retirement didn't like the labels as much as did people who had been in the group for a while. We hate surrendering thoughts of youth, even if the youth is middle age.

Click below for more: 
Store Goodwill with Seniors 
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Offer the Time of Their Lives to Senior Citizens 
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Supply Quality Time to Senior Shoppers

Monday, October 6, 2014

Reserve Control in Intimate Outsourcing

Consumer interest in contracting with merchants to handle intimate responsibilities isn’t new. Matchmakers were around for millennia before eHarmony. Nannies and au pairs are simply older forms of child care centers and Merry Maids. Hiring a business to plan your child’s birthday party may seem novel, but hiring a bunch of businesses to plan a wedding is old hat.
     What is newer is the growth in opportunities for merchants to sell such services because consumers feel more time pressures.
     Researchers at University of Wisconsin-Madison considered the example of parents outsourcing planning of their child’s birthday party. In structured interviews with study samples, the researchers identified pivotal shopper questions the parents will probably ask. Here’s my version of those questions along with my suggestions for profitable retailer responses:
  • “Will I feel I’ve carried out my parental responsibilities?” Reserve control for the parent. Because they have come to you to save time, take care not to overload with details. Have a set of three to five overall party packages to consider, and allow for customization of each package. 
  • “Will my family and friends give me credit for carrying out my responsibilities as a parent?” This question is similar to the first one, but it’s different. It’s the difference between psychological risk—“What will I think of myself?”—and social risk—“What will others think of me?” Go beyond reserving control for the parent in the party planning. Also reserve ample opportunities for the parent to be the focus of attention during the celebration itself. 
     In a classic study published in 1950, psychologist Mason Haire presented either of two versions of a shopping list to groups of consumers. The lists were identical except that one included “Nescafé instant coffee” and the other, “1 lb Maxwell House Coffee (Drip Ground).” Among the people shown the first list, 48% described a woman who would write such a list as lazy. The figure was 4% for those shown the second list. Outsourcing the brewing of the coffee had social risks.
     When Prof. Haire did a second study, adding “Blueberry Fill Pie Mix” to each list, the “instant coffee” shopper was much less likely to be seen as lazy.
     And in a replication of the first study eighteen years later, there were no statistically significant differences between the two groups. Outsourcing that family responsibility became more acceptable. The psychology of the consumer does change over time.

Click below for more: 
Shelve Self-Control with Risk Mates 
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Monday, September 29, 2014

Book Tours of Your Esteemed Merchandise

When offering high-end merchandise at healthy margins, you’d like to broaden your market, but not jeopardize the merchandise’s prestige image. A demonstration of the risk and a way to avoid it are offered by a Harvard University experiment.
     The researchers used as their study sample owners of Prada handbags. All the participants were asked to consider a situation where every visitor to a boutique shop was offered, at no charge, a luxury-quality shopping bag graced with the Prada logo. Then one group of the study participants were also told that accepting the shopping bag led to the consumer admiring the Prada brand. The other group of study participants were told, instead, that accepting the shopping bag led to the consumer feeling like a part of the Prada community.
     Next, the study participants were asked what effect they thought the distribution of the shopping bags had on the Prada brand image. The group who’d been told the recipients admired the brand said the gifting had raised the image. These Prada handbag owners said they now had even more pride in their ownership.
     This finding would be expected. However, the other group said they thought the gifting cheapened the image of the brand. Having people consider themselves part of the luxury community without making a luxury purchase had that effect.
     The researchers called the first group “brand tourists” and the second group “brand immigrants.” Other studies found similar results. When potential purchasers of an esteemed item are invited to accept what is clearly understood by all to be a sample given to an outsider who’s just looking, the esteem of the item remains undisturbed and might be enhanced. But if you drop the border restrictions on immigrants, there’s a danger.
     Another study, this one at University of London and Harvard University, analyzed the effects of opening the gates to Ironman. The Ironman events are esteemed for their rigorous physical challenges. When a private equity firm purchased the rights to the Ironman name, they decided that registrants who completed a half-Ironman race also could claim the designation “Ironman.” In addition, permission to use the Ironman branding was awarded to providers of a jogging stroller, a mattress, and a cologne.
     Warning of a dire decay in the brand image, a coalition of Ironmen quickly and successfully pressured for a reversal. A parallel sequence occurred when luxury fashion house Burberry started carrying dog leashes.

Click below for more: 
Stay Ready to Sell Luxury 
Limit Social Media for Prestige Appeal 
Label Freebies as Samples

Monday, September 22, 2014

Intercept Shoppers Fruitfully

Business researchers define the “interception rate” as the percentage of consumers entering a shop who are spoken to by a salesperson working for that shop. “Interception” makes it sound like the salesperson is blocking the shopper’s path, which is a pretty bad way to earn good will. However, the idea of attending to fruitful contact with each shopper is an important one. Such contact enhances the probability of closing a sale and convincing the customer to return to the store.
     Researchers at Justus Liebig University and Zeppelin University, in Germany, set out to find what leads shoppers to initiate consultation with a salesperson. They began by verifying that, in fact, salesperson contact is positively related to the amount of money the shopper ends up spending on that store visit.
     The researchers then identified major motivators for consultation:
  • Some of the motivators are just what you’d expect. For instance, the shopper knows what they want, but isn’t sure which of the available alternatives to select. Check that you and your staff are easily available on the sales floor and that the available staff either have the knowledge to answer shopper questions or know where to fetch the answers. But even here, the research findings provide a twist: To raise the interception rate, be able to sense how much time and mental energy the shopper wants to spend considering the shopping decision. If a shopper fears that you’ll be giving too much information, they’ll avoid asking you. 
  • Other of the motivators make sense when you think about them, but you might not have been thinking about them. For instance, the shopper is finding the store visit enjoyable, and so is open to visiting with the store staff. Create within the minds of your shoppers an image of what consumer researchers call “a third place.” This is an environment in addition to home and work which is appealing because it feels comfortable. Give an authentic sense of family to your customers. Some retail consultants say, “Make our customers feel like family.” I prefer, “Give a sense of family,” because research findings seem clear that for maximum profitability, you want to be sure to keep the interactions as a business relationship. Don’t promise more than you’ll deliver. That wouldn’t be authentic. Related to this, the store doesn’t need to be fancy. Actually, a fancy ambiance can cause the whole experience to seem inauthentic. 
Click below for more: 
Show Up Before the Right Eyes & Minds 
Give a Sense of Family for Emotional Attachment 
Win First Place As a Secure Third Place

Monday, September 15, 2014

Number the Attractions for Attraction Effects

To unfreeze a shopper’s indecisiveness when choosing between two alternatives, you can introduce a third alternative which is clearly similar to one of the others on an attribute important to the shopper and also clearly inferior on another attribute important to the shopper.
     For example, suppose a customer wanting to purchase an electric lawn mower tells you she can’t decide between the one that’s more powerful on hills and the one that’s cordless. You now know two attributes important to this shopper. You’ve also noticed she says she doesn’t have lots of space in which to store a mower. So to unfreeze her decision making, you show her a corded mower which is powerful on hills, but is wider than either of the other two. As a result, she selects the one that’s powerful on hills, but is more narrow.
     Consumer psychologists call this phenomenon the “decoy effect” or “attraction effect.” Studies have verified that the attraction effect operates with consumers choosing among microwave ovens, television sets, cars, apartments, beers, airline tickets, and even political candidates.
     According to Yale University and National University of Singapore researchers, the power of the attraction effect depends on how attributes are presented to the consumer. It works best when the salesperson describes the attributes using numbers, such as a toaster oven with a durability rating of 7 and ease-of-cleaning rating of 5, both on a 10-point scale. It works least well when the consumer actually tries out using the alternatives.
     With the toaster oven, the shopper for whom ease of cleaning is important probably won’t have a chance to actually experience this at the store, so the attraction effect should be at its best. But for that lawn mower shopper for whom ease of storage is important, she can experience the width right there in the store, so the attraction effect would be weaker.
     The attraction effect is likely to be strongest with experience and post-experience goods and weakest with search goods.
     Search goods have features, the value of which can be relatively easily assessed before purchase. A refrigerator and a car are search goods.
     The values of experience goods are more difficult for the shopper to assess until they’ve been used. An insurance policy or unfamiliar food is an experience good.
     Vitamin pills and investment portfolios are examples of post-experience goods, where it’s hard to accurately evaluate the advantages even after use.

Click below for more: 
Decoy the Indecisive Without Getting Decoyed 
Post Dramatic Tales for Post-Experience Goods

Monday, September 8, 2014

Impress from the First

Shoppers are greatly influenced by what happens early on. First impressions set the scene. This is true to some extent for all consumers and, for people shopping in a group, the initial sights, sounds, and smells have a greater effect on the probability of return visits than do the experiences when paying for their purchases, exiting the store, or finding the car in the parking lot.
     First impressions have such a lasting impact that even if your store is remodeled, greater sales increases occur for new customers’ initial visits than for those customers who were accustomed to shopping with you before the remodeling. Researchers at Monash University assessed the trends in store visit frequency and spend-per-visit in a set of stores that had undergone major remodeling and a set of similar stores that had not. They found that for both new and existing customers, the remodeling increased sales revenues. Yes, renewed first impressions did stimulate the old customers. However, over the subsequent year, the returns were greater for the new than for the existing customers in the remodeled stores.
     In one of these stores, the researchers measured the customers’ psychological responses to the remodeling. New customers had a greater draw to the store than did existing customers because the visit was for the new customers, more of an opportunity to develop first impressions.
     Retail staff may fail to recognize that how each of them interacts with the shopper influences how the shopper interprets the interactions with staff they encounter next. Let’s say a sales clerk looks up at the approaching shopper and smiles gently. If that event had been preceded by a sincere greeting from the cashier as the shopper entered the store, the shopper is likely to consider the salesperson’s smile to be sincere and welcoming. This is less likely if the shopper had received no more than a cold stare from the cashier when entering the store.
     But if the first impressions are not as positive as you’d like, you could be able to rescue the situation, according to research findings at Washington University in St. Louis, University of California-San Diego, and University of Florida. They found that later experiences can be made to seem like firsts for a consumer. In one of their studies, an online review which came late in the sequence gained greater impact when presented as “the first review of the new year.”

Click below for more: 
Track the Trajectory of In-Store Impressions
Stress the Impact of Spreading Impressions
Lead Your Customers Through Changes Gradually

Monday, September 1, 2014

Appeal to Nostalgia

Nostalgia appeals loosen the consumer’s purse strings.
     Researchers at University of Minnesota, University of Southampton, and Grenoble École de Management asked each study participant in one group, selected at random, to think about their past. The remaining study participants were asked to think about recent or future events. Then each study participant was asked how much they’d pay for a set of items which were described by the researchers. The group who’d been asked to think about their personal past came in with higher bids overall.
     In other studies by the researchers, activating nostalgic thoughts resulted in a higher willingness to spend money to stop an annoying noise and to donate money to others.
     Consumer behavior experts from Arizona State University and Erasmus University in the Netherlands conclude that when adults are feeling lonely, they become more interested in nostalgia.
      Study participants played a ball-tossing game on a computer. The game was rigged so that some participants were told they’d been eliminated. Dropped participants were more likely to say that belonging is important to them. And they also made more consumer choices which reminded them of their personal history. This included preferences in cars, food brands, TV shows, movies, and shower soap.
     “New and improved” has been a mainstay of retail marketing for forever. And “Been there, done that” easily makes top ten lists of trite phrases. Still, researchers at American University, University of Arizona, and Northwestern University mused on why people will sometimes read the same book a number of times, watch the same movie repeatedly, or go back to the same place and do the same things again.
     Analyzing in-depth interviews with consumers in the U.S. and in New Zealand, the researchers identified a set of explanations:
  • People refresh their memories for favorite experiences 
  • They seek out details they missed before due to the limitations of human attention 
  • They want to give the item another chance for a positive impression because of others being surprised at their report of a prior negative experience 
  • They’ll enjoy being there while friends encounter the movie or destination for the first time 
     Novelty has a major appeal for shoppers, and so does nostalgia. The nostalgia appeal in recent shopping seasons may be due to feelings of social uncertainty from the economic downturn. The appeal of nostalgia may wax and wane, but it’s always in vogue as at least a niche market.

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

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Prolong Your Reputation as Cutting Edge 
Enable Shoppers to Revisit the Already Done 
Isolate Loneliness & Materialism 
Record Pleasures of Limited-Supply Nostalgia 
Keep Up-to-Date with Nostalgia Appeals

Monday, August 25, 2014

Name Your Price!

Among the most compelling evidence of the value to a retailer in understanding shopper psychology consists of those instances in which a shopper finds a higher price on an item to be more attractive than a lower price on an equivalent item.
     This might be because the higher price indicates greater exclusivity. 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.”
     Or the preference for a higher price could be due to pronunciation. For instance, an “s” sound conveys smallness and smoothness to the English-speaking brain. A price stated verbally as seven dollars, sixty-six cents tends to sound small, and the purchase decision seems smooth. But an “oo” sound, as in seven dollars, twenty two cents, tends to sound larger. Researchers at Clark University and University of Connecticut found that a price of $7.66 was rated as a better deal by one group of consumers than was a price of $7.22 by another, equivalent, group of shoppers for the same item regularly priced at $10.00.
     Now Clark University researchers, this time in collaboration with Babson College researchers, find another example of sound effects in pricing: When an item’s price resembles the sound of the shopper’s name or birthdate, the shopper will like the price better. In some circumstances, this means the shopper will prefer that price to a lower price which sounds nothing like the shopper’s identifying information. A price of fifty-five dollars has extra appeal for consumers named Fred or Ms. Fine. A price of $49.15 has extra appeal for a consumer born on 9/15 or even 4/15.
     You may not set different prices for different shoppers based on an individual’s name or birthdate. However, in those circumstances where the sound of a price matches the sound of the shopper’s name, say the price and the shopper’s name in the same sentence.

Click below for more: 
Raise Luxury Prices If Equivalents Drop Prices 
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Monday, August 18, 2014

Discuss Disgust Conservatively & Liberally

Political scientists at University of Nebraska-Lincoln and Rice University say that liberals tend to be physiologically different from conservatives, and that the differences influence what the people will purchase at retail.
     A primary distinction between the two orientations is in the frequency, nature, and intensity of physiological signs of disgust. Prior research had found that the higher a consumer’s identification with politically conservative values, the higher the probability of that consumer buying lots of cleaning supplies, laundry baskets, and desk organizers for use in the household. In another set of experiments, political conservatives spent more time than political liberals fixating on depictions of vomit. This suggests the conservatives would be more receptive to items which head off the disgust.
     Conservatives have a sharper sensitivity to all sorts of negative stimuli. Depictions of house fires and dangerous animals also drew prolonged attention. Facial expressions interpreted as surprise by political liberals were more often interpreted as threat by political conservatives.
     Some research finds that the brain structures of the two orientations differ: Liberals have relatively more gray matter in the anterior cingulate cortex, a part of the brain associated with impulse control, while conservatives have relatively more gray matter in the amygdala, which is associated with intense emotional experiences.
     These are all overall tendencies, not true of every individual consumer. Further, the Nebraska/Rice researchers acknowledge that physiological predispositions, built into a consumer’s DNA, aren’t the whole tale. The situation matters, too. Voters are somewhat more likely to express disgust with politically conservative candidates and issues when the polling place is a school than when it’s a church. In the retail store realm, shoppers sitting on a hard-surface chair are quicker to be repelled by novel brands and products than when sitting on a soft chair.
     Still, discussing with your shoppers their liberal-conservative orientations could help guide your selection of merchandise to stock and your selling points. Or you could use market research data. University of Michigan, New York University, and Turkey’s Özyeğin University researchers analyzed purchases over a six-year period in 1,860 supermarkets across 416 U.S. counties. Survey data on voting patterns and religiosity for each county were used to calculate what the researchers identified as “conservatism.”
     The resulting advice from the researchers: If many of your shoppers identify themselves as religious and say they vote Republican, emphasize national brands over store brands in your merchandising and hesitate stocking recently-released products.

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Monday, August 11, 2014

Limit Availability to Overcome Satiation

Even your most satisfied customers may seek out retailers who compete with you for those customers’ business. That’s because people like variety. Take comfort in knowing this doesn’t necessarily mean they’ll desert you, never to return.
     The return is more likely, though, when the customers haven’t satiated on your store’s products. It’s best to leave them always wanting more. Researchers at University of Georgia and University of Minnesota found that one way to avoid satiation is to interrupt the nonstop availability of products and services which are distinctive to your store. Perceived limitations increase post-purchase enjoyment of the items, and enjoying the items results in desires to shop with you again.
     Time limits occur naturally as you phase out certain items to create room for new offerings. Announce to your target audience an item you’re selling is a limited edition, and sales can blossom. It’s true with artwork and, as it happens, with encyclopedias.
     In spring 2012, Encyclopaedia Britannica, Inc. announced the end of the print edition. The average 60 orders per week promptly grew to 1,050. What had become a marginal part of the business because of the move to digital versions of the product became a prominent profit center, although briefly.
     As a general rule, however, it best serves your profitability to combine “limited availability” with “ongoing availability” to assure your customers of a future source of supply.
  • To create perceptions of limitations, remind people that nothing lasts forever. A University of Chicago survey discovered how a large percentage of people who’d moved away from the Windy City visited tourist attractions, such as Chicago’s Millennium Park only toward the very end of residency, perhaps in the midst of packing up. The researchers suggested tourism retailers sell to locals the idea of a “staycation,” such as a gift certificate for specific dates to visit the nearby attractions. 
  • Invite shoppers to revisit the already done after an interval to recover from satiation. Researchers at American University, University of Arizona, and Northwestern University mused on why people will read the same book a number of times, watch the same movie repeatedly, or go back to the same place and do the same things again. In-depth interviews revealed answers: They seek out details they missed before. They want to give the item another chance for a positive impression. They’ll enjoy being there while friends encounter the experience for the first time. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Show Them What They’ll Never See Again 
Enable Shoppers to Revisit the Already Done

Monday, August 4, 2014

Interrupt the Urge to Interrupt the Shopper

Strategic interruptions of the browsing shopper can move that shopper toward purchase. For example, researchers at University of Toronto found that interrupting someone by pointing out a clearly inferior alternative often unfreezes indecision. Say, “May I show you one more model that I think would help you decide? I hate for you to need to go shopping somewhere else.”
     But plenty of other consumer behavior research finds that poorly timed or poorly framed interruptions disrupt the selling process. At issue is what psychologists call “Need for Cognitive Closure” (NFCC). Some shoppers want to make a decision quickly and then stay with that decision. Interruptions by a salesperson risk confusing those shoppers. Other shoppers evidence a strong need to gather as much information as possible before deciding. They welcome salesperson interruptions to relax the process. Then after deciding, the shopper doesn’t mind the sorts of interruptions which reassure them they’ve made a good decision.
     And almost all shoppers are somewhere between those two extremes.
     NFCC is a personality trait, which means each of us tends to stay within an idiosyncratic range on the dimension throughout adult life. Then situational factors can move us within that range and occasionally well outside it.
     Most consumers are more open to interruptions early in the purchase process and less open later. However, researchers at New Mexico State University and Sacred Heart University suggest that the retailer look out for the potential customer who seems pressed for time and is evaluating choices almost from the start. Minimize interruptions of these people early on and never interrupt early on with content not directly related to the purchase selection, such as with an extended greeting or casual conversation. With the shopper who is in this frame of mind, later interruptions are okay, and can actually create good will, as long as the interruptions are pleasant, such as reassurance or gratitude, and they’re not frequent.
     Another set of researchers, at Stanford University, note how in-store shopping can be subject to a plethora of interruptions from sources other than the retailer—phone calls, texts, impatient children. To the degree that the retailer can control additional ones, the sale of the considered item is more likely. Beyond this, the Stanford studies found that a disruptive interruption during the climax of the current transaction increases the NFCC for immediately subsequent purchases.
     Before interrupting the shopper, pause briefly to determine your objective.

Click below for more: 
Dissolve Decision Paralysis 
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Close Out the Purchase

Monday, July 28, 2014

Hang ’Em High for Power Deposits

When your shoppers feel more powerful they’re more likely to put away money for the future, according to researchers at Stanford University and Tilburg University.
     It makes sense. Confidence springs from power, and those with confidence worry less about short-term financial shortfalls, so are willing to deposit dollars. This works best when the monetary deposits are framed as themselves adding to the individual’s power rather than as only generating reserves for a rainy day.
     The Stanford/Tilburg researchers made some study participants feel relatively powerful and others relatively powerless. Compared to those with perceptions of powerlessness, those with perceptions of power expressed greater interest in saving money for the future when told the objective would be to keep the money indefinitely. In a follow-up, there was no difference between the powerful and powerless in willingness to save money when the participants were asked to think about specific ways they’d be spending their savings later.
     Other retailers are usually more interested in having customers spend money now rather than deposit it for later, and here, too, perceptions of power matter. If you make shoppers feel more powerful, they’re likely to increase the amounts spent on purchases for themselves. If you make them feel less powerful, they’re likely to increase the amounts on purchases intended for others.
     Participants in a study at Northwestern University placed bids on items like a T-shirt and a mug. Some of the participants had been exposed to a manipulation to build a sense of greater power, while the manipulation for the other participants was designed to lessen the sense of power.
     When purchasing the item for themselves, those feeling greater power bid about 86% more for an item, on average, than those feeling lower power. When purchasing the item for someone else, those feeling less powerful bid about 52% more for an item, on average, than those feeling higher power.
     How to influence your shopper’s sense of power? Show ads and signage which emphasize the power possessed by the shopper (“At our store, you’re the boss”) or deemphasize the power (“At our store, we take care of you”). Then treat the shopper with deference or with authority.
     The Stanford/Tilburg researchers had participants sat on either a tall chair or a low ottoman. This recalls research showing how consumers with a higher-level perspective plan for the future.
     Hanging out high, in power or in perspective, produces a difference.

Click below for more: 
Assess Shoppers’ Cloaks of Confidence 
Manipulate the Shopper’s Sense of Power 
Enrich Clients’ Savings Deposits

Monday, July 21, 2014

Sell What’s Left

Customers generally pay more for scarce items, as long as the customers accept the reason for the scarcity as genuine. Such as seeing the scarcity for themselves on your shelves.
     And it turns out that they’ll see best how little is left when you show this on their left. The orientation of information in the shopping environment makes a difference in the shopper’s mental orientation.
     Consumers in a set of studies at City University of New York, IULM University, and University of Sassari viewed pairs of shelves in which one side was sparsely stocked with products and the other side was not. The participants were quicker to notice there were slim pickings when it occurred on the left. This was true whether the shelves were arranged side-by-side immediately adjacent to each other or arranged facing each other with a blank wall between. (A methodological note: All the participants in the study had said beforehand that they were right-handed.)
     Once the shopper detects genuine scarcity, you will want to decide whether to limit the number of items each customer can purchase. From a strictly business perspective, it would seem that if you allow shoppers to buy as many units as they want, you’re more assured of making quicker profit on the entire inventory.
     From a shopper psychology perspective, there are additional considerations to whip you back and forth, left and right, in your thinking:
  • Customers who come to your store looking forward to getting a high-demand item will feel betrayed if they encounter an out-of-stock. 
  • On the other hand, customers who otherwise have an allegiance to your store and encounter an out-of-stock become more likely to come to your store promptly when sales on high-demand items are announced. 
  • On the other hand, if the purchasers of large quantities then turn around and resell the items online—as happened a while back with the Missoni line featured by Target—your regular customers might conclude that they don’t need to wait in line at your store. 
  • On the other hand, if the prices charged online are twice as much as your store’s purchase price—as happened with Target’s Missoni line—this adds value to purchasing from you. 
     Left-right position also influences the response to perceiving a good deal. The eyes go to the right. Therefore, immediately to the right of a deeply discounted item, have products priced for a healthy profit margin.

Click below for more: 
Turn Comparisons Right Side Up 
Decide Whether to Limit Purchase Quantities 
Offer Scam-Free Scarcity 
Hook Experts on Scarcity

Monday, July 14, 2014

Increase Store Loyalty Using House Brands

House brands—private label brands—offer your shoppers a price advantage. Traditionally, retailers price them at an average of one-third less than the national label brand. House brands also usually offer you higher profit margins than do the corresponding national label brands.
     Now research at University of Texas-Austin and University of Erlangen-Nuremberg finds that, under certain circumstances, house brands have the bonus advantage of building loyalty to your store. This effect is strongest when:
  • Shoppers for the product category consider the alternatives carefully 
  • Most shoppers for that product category are bargain hunters 
  • Your store has the reputation of offering low prices on all merchandise 
     The upshot is for you to feature house brands in these circumstances.
     While you’re at it, check that the house brand incorporates your store name, or at least the package carries your store logo. When items carry the same brand name across product categories—such as a bath soap and a shampoo—you’d like to strengthen the brand image by having the same package design. Having almost identical package designs is common with house brands, where a consumer could be looking at tables and tacos during one shopping trip.
     Overall, using a similar package design to build brand image is a good idea from a shopper psychology perspective. Mere familiarity brings credibility.
     There’s a potential downside, though. Research findings from Wake Forest University and University of North Carolina–Greensboro suggest that when packaging is similar across items, the shopper senses a loss of control. The consequence might be that shoppers seek variety beyond the similarly branded items. The shopper becomes a bit less likely to buy the house brand across product categories unless you take steps to restore the sense of control.
  • Use variations of the same name. At Trader Joe’s, you might see Trader Ming, Trader Jacques, and Trader Giotto. 
  • Introduce distinctions by placing products with the same package design in different relative shelf positions for different product categories. With the mouthwash, the house brand is to the top left of the other brands, while with the toothpaste, the house brand is to the bottom right of the other brands. 
  • Curb the routine with distinctive designs and color schemes on signage for different product categories. Researchers at Columbia University and University of British Columbia find that such techniques give the shopper a sense of control, and this sense of control curbs further variety seeking. 
Click below for more: 
Finesse Profit Margins on House Brands 
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Arouse the Love for Your Store

Monday, July 7, 2014

Time Out for Number-Free Descriptions

Time and money are psychologically different for consumers. Research findings from Hong Kong Baptist University and Chinese University of Hong Kong suggest that a salesperson is wise, under certain circumstances, to bring out to a shopper the time savings the shopper could experience in selecting, using, and maintaining a product or service more than emphasizing cost savings in purchasing or using the item:
  • When you want to keep the shopper from getting bogged down in analyzing numbers associated with item characteristics, instead listening to your number-free descriptions. 
  • When you prefer the shopper to compare alternatives on the basis of benefits rather than on the basis of specific characteristics the items possess. This might be because the alternatives for satisfying the shopper’s needs each do the job in different ways, so don’t share many attributes in common. An example would be asking the shopper to decide between purchasing a motor scooter or a one-year bus pass, both of which provide the benefit of transportation, but in quite different ways. 
     Researchers at National Taiwan University and Chung Yuan Christian University attacked another aspect of “time is money,” an aphorism attributed to Benjamin Franklin: Consumers consider time more valuable than money when thinking about how time is perishable. If you don’t use time now, it’s gone forever, but money not used now can be used later. In fact, if invested properly, the money gains in value.
     If you, as a retailer, establish this mindset in shoppers, they’re more impressed with appeals to saving time than saving money. This appeal also works well when consumers are thinking of time as more subject to having a fixed supply than does money. There’s only so much time available, but a person can use credit to expand the money available now.
     However, unless the consumer has either or both of those mindsets, the consumer will undervalue a savings of time. There’s a tendency to think indefinite amounts of slack time will become available in the future. If your appeal to the shopper is a savings of time, the research findings suggest you start by prompting the shopper to place a greater value on time.
     This doesn’t mean shorter durations always indicate greater value to consumers. In studies at University of Toronto and University of Singapore, people rated services like those of a locksmith as inferior when the service was delivered more quickly than the person expected.

Click below for more: 
Slacken Consumers’ Undervaluing of Time 
Explain How Quick Service Is Worth More 
Sense When Wait Irritation Heats Up

Monday, June 30, 2014

Shelve Self-Control with Risk Mates

Texas A&M University and Vanderbilt University researchers randomly paired study participants, asked each pair to review a short film, and put a bowl of jelly beans on a table between the two reviewers.
     How did the degree of candy gobbling affect the relationship between the study participants?
     It turned out that when each of the pair perceived that the two of them had eaten more jelly beans than was prudent, the two felt closer to each other than for those pairs in which the transgression hadn’t been shared.
     People who feel close influence each other’s consumer decisions. That’s true with minor vices such as eating jelly beans in casual relationships such as random assignment. It’s also true with serious risk-taking and serious relationships.
     Boston College and University of Pittsburgh researchers looked at financial choices by married couples. When both members of the pair exhibited high self-control in other realms, they showed caution in their purchases. However, when one member showed high self-control and the other member, low self-control, the low self-control prevailed. The pair made riskier financial decisions.
     In deciding whether to make a purchase, each shopper consciously or subconsciously weighs the risks. Of the various types of risk, two are called “social” and “psychological” by consumer psychologists.
  • Social risk: “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?”
  • Psychological risk: “Does using this product or service conflict with the image I want to maintain of myself?”
     A retailer can address the social risk by encouraging shoppers to bring along their friends. As to psychological risk, research indicates that having shoppers bring along the household is a help.
     The friends or family don’t even need to be there with the shopper in order to exert an effect. A marketing researcher and a psychologist at Umeå University in Sweden explored what influences a value-laden innovative purchase decision—buying a vehicle that uses electricity and biofuels instead of fossil fuel gasoline.
     Not surprisingly, the study found that one major determinant was the nature of the consumer’s values regarding protection of the environment. Those wanting to maintain an image of themselves as guardians of the environment were more likely to buy.
     Still, another determinant was the size of the consumer’s household. Those living in multi-person households were more likely to take the risk of buying the innovative vehicle.

Click below for more: 
Spread Risks to Family for Values-Laden Buys 
Build on Couples’ Decision-Making Rituals 
Form Crowds into In-Groups

Monday, June 23, 2014

Expand Via Related Links

Why did Friendster fail?
     Business researchers at Harvard University and Bank of Canada claim it was because of poor expansion. Friendster, a predecessor of Facebook and begun on a similar business model, opened up recruitment to anybody who was interested. The result was participation by consumers who often found too little in common with each other. The social networking magic floundered, and so did Friendster.
     Facebook, by contrast, started out by targeting college students and, only when there were enough of those on board, expanding to people who were like college students, and then progressively expanding further to target markets with characteristics similar to those of Facebook’s current consumer base.
     In your retail operations, expand this way. Certainly, do pursue weak links. Say to your satisfied customers, “Recommend us to your friends,” and also, “Recommend those friends talk about us to their friends.” But do it in this way because friends of friends are likely to be similar to the recommender in some ways. They are what the business researchers call “adjacent markets.”
     “Friendship is born at that moment when one person says to another: ‘What! You too? I thought I was the only one.’” So wrote C. S. Lewis, well-known to many as the author of The Lion, the Witch and the Wardrobe.
     To better fit the realm of retailing, I’ll tweak the C. S. Lewis quote to read, “A customer referral relationship is born at that moment when the consumer says about the retailer: ‘What! I’m thinking there are many others who, like me, could benefit from all you offer. I’m far from being the only one.’”
     You might even want to take the initiative in discouraging customers who don’t belong. Some years ago, Kelvin MacKenzie, then editor of The Sun, Britain’s best-selling tabloid, received news that a reader had become so outraged with the paper he was thinking of cancelling his subscription.
     Mr. MacKenzie took no chances. He notified the subscriber that the man was now banned from not only subscribing to, but also reading from,The Sun ever again.
     This story brought to my mind another anecdote, told by comedian Groucho Marx about a possible cancellation of his club membership. As Groucho relates that tale in Groucho and Me, “I sent the club a wire stating, ‘Please accept my resignation. I don't want to belong to any club that will accept me as a member.’”

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

Click below for more: 
Cultivate Referred Customers 
Grab On with Weak Connections 
Reserve the Benefits of Exclusivity