Monday, February 2, 2015

Agitate Stable Blindness

Australian retailer Evan Crick called it “stable blindness.” He was characterizing to me the doubts he’s often encountered upon suggesting to store owners in his Mitre 10 group that they implement shopper loyalty programs.
     When Evan’s phrase first reached my brain, I assumed for an instant that “stable” referred to a fixation on continuing to run the business in the same old unwavering ways. But since Evan is an equestrian, coordinates horse shows, and has sold saddles and all online in addition to screwdrivers and all in his store, I realized his phrase came from another source. Allusions to blinders on the spirited thoroughbreds and nags nagging against change.
     A review of decision making studies at Harvard University and University of Chicago indicates the ways in which a stable of merchants can move in either of those directions. The blinders go on when the people fail to share experiences before embarking on a course of action or during implementation of a program. The nagging against change arises when the merchants fear they’ll be out of step and risk their reputations if pioneering adventurous adjustments.
     The solution, according to the researchers, is for store owners and operators to collaborate with each other to broaden the perspectives available to everyone and to generate the courage which comes from companionship. Well-functioning groups are better than individuals in overcoming certain kinds of decision making errors:
  • Availability heuristic. Individuals pay too much attention to what’s happened most recently or fits in best with their other beliefs. 
  • Egocentric bias. Groups help the members see that the preferences of each one may not be typical of the tastes of the potential customers. 
     Along with this, the researchers urge us to stay vigilant so we avoid proven dangers of groupthink:
  • Planning fallacy. Groups are worse than individuals in underestimating the time, money, and staff projects will take. 
  • Framing effects. Group members come to depend on each other to do the critical thinking, meaning that the critical thinking is inadequate. As a result, the manner in which the facts are framed makes too much of a difference. A group will be more likely to agree to a change if told it has a 90% chance of success than if told it has a 10% chance of failure. 
  • Sunk-cost fallacy. Because of reputational concerns, groups are more likely than individuals to prolong ill-fated initiatives, throwing good money after bad. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Give Loyalty Program Members Prestige 
Steam On Through to Success 
Bind Yourself to Your Plan

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