Research at Drexel University, Lehigh University, and Monmouth University indicates that this humanization of the store increases sensitivity to price changes. For any product and service brands in your store with a human or quasi-human association—items like Michelin tires with the Michelin Man logo and Mrs. Paul’s fish sticks—the sensitivity to price changes is especially keen. Shoppers are more likely to see price increases as efforts by the store owner and the item supplier to profiteer. Across product categories including frozen pizza, butter, paper towels, potato chips, toilet tissue, and yogurt, the researchers saw price increases stifling demand and price decreases enhancing demand more markedly with humanized than with non-humanized brands.
In studies at Nanyang Technological University in Singapore, consumers who considered themselves close friends of a retailer were more forgiving of the retailer when the outcome of a transaction was unfavorable. The consumers gave higher ratings on fairness and satisfaction than when the retailer was considered only an acquaintance.
But when serving customers who consider themselves to have a personal relationship with you, clarify expectations and obligations.
Researchers at Lingnan University in Hong Kong and Chinese University of Hong Kong presented study participants with a scenario: You’ve asked the owner of a restaurant with whom you have a close business attachment to hold an ocean-view table for your birthday bash. When you arrive, the owner explains, with a tone of regret, that all the ocean-view tables are taken.
Each study participant was asked what their reaction would be. Past research had indicated the restaurant customer would be empathic, since the owner was, after all, like a friend. And indeed, for many of the study participants, this was the reaction. They demonstrated understanding toward the owner. However, for other participants, the reaction was anger at being betrayed by a friend.
In the Drexel/Lehigh/Monmouth studies, empathy also made the difference. Shoppers sensitive to the needs of others responded less strongly to price changes than did shoppers focused on their own needs.
Generate empathy in your shoppers for the challenges of running a retail business. One research-based technique for doing this is to ask your regular customers for advice.
For your profitability: Sell Well: What Really Moves Your Shoppers
Click below for more:
Elucidate with Close Business Friends
To Build Loyalty, Ask Advice, Not Expectations
Be Ready to Explain Price Increases
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