Say Thanks, Keep the Change

When thanking a customer, you could be better off not adding a monetary reward.
     Researchers at Duke University, University of Pittsburgh, and Vanderbilt University found that consumers reacted positively to an expression of gratitude, but negatively when a trivial amount of money was added. The researchers’ explanation is that the smallness of the financial reward made the thanks seem small.
     I agree, but I see another explanation as well: When a salesperson gives money as an expression of gratitude, there’s a risk the salesperson will figure the money does the trick, and they’ll neglect the importance of a genuine face-to-face or handwritten thank you. They can forget that the customer’s purchase is itself a thanks, which helps the store owner and the sales employees pay their bills. And a thank you from the customer deserves a heartfelt thanks in return.
     Still, it’s possible to thank customers too much. Researchers at University of California-Riverside, Boston College, and Southern Methodist University assessed the repurchase behavior over a three year period of customers who were thanked repeatedly by the retailer. The researchers found that when there were too many thanks, the recipient began to see it as more of a sales pitch than as genuine appreciation. There were fewer repurchases from customers who indicated to the researchers that this tipping point had been exceeded.
     How to avoid the risks?

• Find out which channels each consumer prefers for messages. Repurchasing dropped faster when a customer liked a personal telephone call, but was getting thanked via e-mail. For most customers, a grammatically correct handwritten note is a welcome break from text messages.
• Add unpredictability. A surprise thanks comes across as more genuine than an obviously scheduled one. Researchers at Yale University and Carnegie Mellon University found that a surprise gift to commercial bank customers resulted in significantly higher deposit account balances.

    Still want to augment the thanks with a little monetary reward? Here are two tactics:

• If it’s a modest amount, like a real estate agent giving a $25 gift certificate as a thanks for a sale, describe it as a high point on a range: “We like to give $10 to $30 gift certificates as thanks.” 
• If the amount is truly trivial, explain that it will be pooled with rewards given to others and contributed to charity.

    In the Duke/Pittsburgh/Vanderbilt study, both these eliminated the negative pull from the financial thanks.

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

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