Thursday, July 28, 2016

Help Shoppers Leave with Health Left

Given the choice between items with healthy and unhealthy reputations within a product category, shoppers in a grocery store are more likely to pick the healthy ones if those items are shelved to the left of the unhealthy ones instead of to the right of them. Similarly, if healthy items are listed in a column to the left of the page and the less healthy ones to the right on a restaurant menu, the diners become more likely than otherwise to select from the healthy items.
     Those grocery store shoppers and restaurant diners will also consume more of the healthy purchases they make if they’ve selected them from the left instead of the right.
     All this comes from a set of studies at University of South Florida. Please recognize this doesn’t necessarily mean people will select and consume the healthy items to a greater extent than the unhealthy ones. Instead, the finding is that the relative preferences shift toward the healthier items. People might still prefer the unhealthy items, but it will be noticeably less often than otherwise.
     In the grocery store application, it isn’t necessary that there be two single columns of items—the more healthy column to the left of the unhealthy column. It also could work with two shelving units, the healthy items shelved in a unit to the left and the less healthy items shelved in a separate, but immediately adjacent, shelving unit on the right.
     One explanation for this “left health” effect has to do with price images. Items displayed to the right of the visual field will—all other factors equal—be estimated by shoppers to carry higher prices. Consumers familiar with the labeling on tape measures and graphs assume that numbers appearing to the right are of a higher magnitude than those appearing to the left. And with the exception of situations like announcing space launch countdowns, we count up. Those in cultures that read from left to right will, on average, mentally process an item to the right later than an item to the left, so subconsciously associate a higher number with it.
     When the healthy item is on the left, it seems like a better deal than when it’s on the right.
     Although we read from top to bottom, too, placing the healthy items above the less healthy ones on shelves or on the restaurant menu doesn’t shift the preferences as strongly, however.

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

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Go Fourth in a Five-Item Horizontal Choice
Assume Higher Anchors for Right-Side Items
Offer Bonus Packs of Virtue, Discounts on Vice
Funnel Purchase Alternatives Maturely

Monday, July 25, 2016

Ask for the Sale

A shopper asks to see a particular type of item. You guide the shopper to the area where you carry the item. As soon as you arrive, the shopper looks over the merchandise, inquires about item numbers and prices, and looks ready to leave.
     Maybe this shopper wasn’t truly interested in becoming your customer. But before you give up, you ask a question: “Will you be buying this item at our store?”
     There are loads of consumer behavior studies which indicate that, in asking such a question, you influence the probability the shopper will, in fact, come back to buy the item from you. A team of researchers at University of California-Irvine, State University of New York-Albany, University of Idaho, and Washington State University reviewed more than 100 of those studies to discover the forces behind this question-behavior effect. Here’s my version of their findings, along with my suggestions of how to use the effect to make sales more likely:
  • Positive attitudes. When the salesperson is courteous and helpful, the question leads the shopper to generalize the positive impressions of the salesperson to thinking about making a purchase at the store. Strengthen this by remaining courteous and helpful even if you think there’s no chance the person will return. You could be wrong about that. 
  • Consistency. For no reason other than to avoid confrontation, shoppers are more likely to answer your question “yes” than “no” if at that point they had not intended to purchase from you. And a characteristic of human behavior is that we feel better about ourselves when there’s a thread of consistency in our behavior. So the “yes” increases the odds the shopper will actually do it. To strengthen this one, follow up the “yes” with, “I’m pleased to hear you say that, since here are a few of the advantages our store offers….” 
  • Fluency & commitment. What you see as the shopper wanting to leave may be indecisiveness, not a desire to purchase somewhere else. By asking the question and getting an answer, you free the shopper to flow closer to commitment. If the shopper answers “no,” say, “May I ask the reasons?” Then decide if the shopper is open to you dissolving the objections. 
     The research doesn’t conclude that asking the question always increases the likelihood of purchase from you. Such questioning will irritate some shoppers, making them feel trapped. Use the question-behavior effect judiciously.

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

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Go for Customer Gratitude and Guilt
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Thursday, July 21, 2016

Sell Domestic for the Health of It

Items in your store produced in the same area in which the shopper lives carry a special appeal for that shopper. There are reasons for this having to do with economic sensitivities: People like to keep the dollars for their countrymen. But a consumer behavior research team from far and wide thinks they know another big reason. The scientists’ affiliations include ISM University of Management and Economics in Lithuania, Lingnan University in Hong Kong, Sun Yat-sen University in China, and Vienna University of Economics and Business. They found that consumers consider merchandise to be more pure when it comes from domestic sources.
     The preference for domestic didn’t hold when the retailer said the item had both domestic and foreign components. You might be required by law or regulations to reveal multiple-country origins. If you don’t operate under such requirements, consider choosing to describe only the local side with items where purity is a virtue.
     Researchers at Texas State University-San Marcos, University of Wisconsin-Madison, and University of Delaware noticed how the declared country-of-origin (COO) on clothing usually is the locale of manufacture, not the locale where the fibers were produced. The researchers’ study samples consisted of consumers in three U.S. southern states. Participants were asked to decide how much more, if anything, they’d be willing to pay for a woolen sweater depending on the COO. The choices for locales of manufacture were America and China. The choices for fiber origin were Australia, America, and the particular state in which that day’s study was conducted.
     The researchers found that the consumers were willing to pay the most when the fibers were from their home state, and willing to pay more when the wool in the sweater had been grown in America rather than Australia.
     The researchers had administered to the participants a standardized inventory of ethnocentrism—the degree to which you believe your own culture is superior to others. Those with the highest ethnocentrism were those willing to pay the highest price premium for closer-to-home fiber origin.
     In applying findings to your use of COO information, recognize that what’s true for Southern consumers and wool sweaters isn’t necessarily universal. Shoppers associate certain countries of origin with desirable product characteristics. Cheeses and perfumes from France have a special cachet, as do cutlery and timepieces from Switzerland. In these cases, you’ll do best to flaunt the country of origin.

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

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Monday, July 18, 2016

Reward Customer Referrals with Congruency

The revenue value from a referred customer averages about 16% higher than that from a non-referred customer. This statistic is in studies at University of Pennsylvania and Goethe University Frankfurt which tracked the referral patterns and purchase behavior of 10,000 retail customers over a period of almost three years.
     It does seem clear, then, that it pays to reward your current customers for sending friends and family toward your store. But researchers at University of Kaiserslautern do find that the nature of the reward makes a difference. As you’d expect, the reward should be something the recipient considers to be of clear value rather than a trivial trinket. Equally important, the researchers say, is that the reward be compatible with the brand image of your store. A coupon for a 20% discount on store merchandise would do that. So would a personal item carrying the name of your store. Tickets to attend a concert probably wouldn’t have sufficient congruity unless your retail enterprise gives concerts. Entries in a drawing would work best if your store brand image emphasizes excitement over reliability.
     Customer referrals are especially important in retail businesses with high customer turnover. Funeral homes, landscape architects, bridal shops, and baby stores must draw a continuing stream of new prospects in order to succeed. The retailer who sells houses, refrigerators, automobiles, or a trade school education might not see the same customer for the same item often if there’s a consistent record of customer satisfaction. Do satisfy customers thoroughly, then reward each of those customers for making referrals.
     Your customers who are loyal to your store become more likely to refer others to you. And it also works the other way around: Customers who participate in a referral program become more loyal because of making the referrals.
     One study with this conclusion was conducted at University of Arizona, University of Victoria, University of Wuppertal, and University of Paderborn. The data came from customers of a global cellular telecommunications provider. The effect of program participation on customer loyalty was highest for newer customers.
     These researchers defined customer loyalty as praising the retailer and as renewing the contract with the retailer. When rewards for making referrals were relatively large, both signals of loyalty were increased by the act of referring. With relatively small rewards for referrals, defection rates went down, but degree of praise for the retailer did not change significantly.

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

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Cultivate Referred Customers
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Thursday, July 14, 2016

Prevent Store Brand Sabotage

When a highly regular customer stops doing business with you, there are many possible explanations for it. Researchers at University of Bern and University of Texas-Austin say that if the reason is a clash of the former customer’s value system with their perception of your business’s current value system, you had better be careful. The result could be what the researchers call Consumer Brand Sabotage. Unless you intervene early, the CBS individual becomes willing to devote substantial efforts to harming the reputation of your store.
     The dominant motives of most dissatisfied customers are to restore a sense of fairness and vent negative emotions. But the desire to destroy your business in those ready to engage in CBS arises from feelings of being betrayed. Their relationship with your store is often a strong one, the sort described by market researchers as being closer to a love affair than a fleeting fling.
     Catalyzing the consumer’s outrage is a sense of powerlessness, and thereby lies the way to head off the destructiveness: Restore the customer’s sense of influence by asking, “What can I do to make things right?” Just being asked and listened to can prevent the active sabotage. And if the answer you get involves actions you’re not able or willing to take, you can come back with a more reasonable alternative. In this dialogue, remember that what’s at the base is a conflict in values systems, so learn about the disgruntled customer’s values.
     But wait. If the customer has stopped coming into your store, how will you be able to ask them that? Well, you do it by reaching out to regular patrons who suddenly stop showing their faces. The outreach might require some persistence. In studies at University of Western Ontario and Queens University in Kingston, Ontario, former customers who felt betrayed often experienced shame and insecurity.
     If the CBS has already begun, you’ll want to actively counter it by correcting misinformation. Take comfort, though, in another finding from the Ontario group: People can decode an unreasonable complaint. The researchers present this example of a real posting: “I used to love [that store]. Let me tell you all why I plan to never go back there again; I hate them with a passion now,….” The studies found that readers of such a posting, which talks of “hate” and “passion,” will suspect that this reviewer isn’t objectively accurate and therefore not credible.

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

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Monday, July 11, 2016

Shape Shoppers with Their Negativity Bias

People have what consumer behavior researchers call a “negativity bias.” Consumers hear praise so often from advertising and from friends wanting to convince themselves that whichever store they went to had to be the best. It’s the negatives which help narrow choices.
     Researchers at University of Mississippi and Ohio State University find that the negativity bias operates differently at different points in the purchase process. Earlier, when your shopper has yet to favor one alternative, including the alternative to buy nothing at all, the attention to the negatives is to help reduce ambivalence. The shopper wants help narrowing the choices. In addition, shoppers are concerned that if they select a product with negative reviews online, others will think less of them.
     However, once a purchase decision is made, interest in negatives is mostly to comfort the consumer that they’ve done their homework.
     With this in mind, retailer, shape shoppers depending on the degree of ambivalence. Early on, use the negativity bias to earn credibility. Researchers at European University Viadrina find that when a salesperson volunteers negative information about a product that’s being considered by the shopper, the shopper becomes more likely to trust everything the salesperson says.
     Start by presenting a good choice, but one other than what you think is the best choice for both the shopper and the store’s profitability. After presenting a downside of that choice, move to presenting the best choice. Keep the words and logic simple. Research finds that if there’s too much complexity, the shopper won’t hook the talk of negative information to the salesperson’s credibility.
     In the same vein, encourage your customers to post balanced reviews so that those looking at the reviews early in the decision process will develop trust. Also, reviews which include both strong positives and a few negatives develop curiosity in prospective shoppers. The curiosity can lead to the shoppers wanting to check things out for themselves at your store or website. Research at Rutgers University concluded that store experience affects how negative information is interpreted.
     Then late in the purchase process, satisfy the shopper’s negativity bias by providing reassurance. According to researchers at Stanford University, University of Utah, and University of Iowa, customers usually want details pre-purchase, but after making the purchase, they seek generalities and praise. So tell the customer that they’ve made a good decision, pointing out how they did take into account the tradeoffs.

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

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Thursday, July 7, 2016

Incorporate Incongruity to Keep Attention

If you’re wanting to convince shoppers what you’re offering them is valuable, you’d like those shoppers to mentally process the information. In our fast-paced world, processing increases purchase probability.
     Mild incongruity—something a bit out of place—kindles processing. Incongruity tickles us cognitively and emotionally, so we devote resources to scratching. A repeated finding in consumer psychology is that retailers should introduce enough surprise to slow down the shopper for a moment to appreciate the sales message. For instance, if a store layout is perfectly predictable, the shopper processes it all immediately and then moves on—beyond the range of a sale that benefits both the purchaser and the retailer.
     Researchers at Belgium’s Hasselt University-Diepenbeek found this to be true with scents used in stores. My standard, research-based advice to retailers is to use pleasant fragrances which are already familiar to the shopper or which you make familiar through repetition. If a smell hasn’t been encountered before, with associations stored in the brain, it will be complicated for the shopper to decode, so the advantages of instant, subconscious influence are lost. Moreover, it’s best when the interpretation of the scent matches the other sensory signals in the surroundings. If the merchandise is intended for a male audience, use male fragrances.
     But the Belgian researchers found that when a mild scent with mildly female associations was used in that setting, shoppers rated the store and the items in the area more highly. It worked the other way around, too: In an area with merchandise targeted to women, a faint male-associated fragrance enhanced store and product ratings.
     Severe incongruity often doesn’t work well. When something doesn’t fit at all, consumers—especially older consumers—are motivated to reject the situation. You can adjust the degree of incongruity by the way you prepare the consumer. Consider a study at University of Southern California and Ohio State University in which it was found that people gave higher ratings to concert music with decisive rhythms and dynamics when told the conductor was male than when told the conductor was female. The ratings were about 14% higher. Not a huge difference, but enough to possibly affect future ticket sales.
     Yet with other participants, who were convinced of the female conductor’s competence, the degree of perceived incongruity was reduced. Then the incongruity was found to deepen consumers’ thinking about the merit of the music they were hearing.

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

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Monday, July 4, 2016

Maintain Store Distinctiveness in Ad Groups

A retail mall operator or a downtown association might produce advertising and other marketing campaigns which feature your store as part of a group. The financing of the campaigns might be covered by your rent or membership levies, so it could seem to you there’s no additional cost. If you start thinking that, you could be wrong. Consider other potential costs—such as to your reputation.
     Let’s say you’ve a car dealership in an auto mall. A set of studies at University of Washington and University of Southern California explored what could happen to the reputation of your brand if a safety recall is announced on a rival brand. As the researchers suspected, a bad impression spreads. Consumers’ negative chatter about a recalled car model causes an increase in consumers’ negative chatter about other models in that same brand and, to a lesser, but still important degree, to models of other brands.
     The cross-brand spread will be greater if you’ve not sufficiently maintained your brand’s distinctiveness. That’s where the danger of a unified car mall advertising campaign carries risks.
     Another set of studies, at New York University and University of Florida, supports the need for such caution for all sorts of retail businesses and group advertising arrangements. Teaming up with other retailers to fund a media campaign can save you money and allow you to diversify marketing dollars. But, says the research, just be sure your store's distinctive advantages are featured in the advertising. With retailer advertising groups, fund a set of advertising messages, not only a single message. Different ads can feature different distinctive features of the ad group members’ businesses.
     Any distinctions can make a difference. In a soft goods store, you can distinguish even items that are common commodities by the ways in which you display them or offer them in combinations. In the Washington/USC studies, the spread of bad reputation from an auto model recall was less to brands that were seen as from a different country.
     In drawing distinctions, I do recommend stopping short of schadenfreude—delighting in the misery of others. Let’s go back to the auto mall example and the January 2010 Toyota recall of eight of its best-selling models. Promptly afterwards, Ford and GM dealers began offering $1,000 bonuses to any consumers who wanted to trade in their Toyotas.
     That sort of thing could undermine negotiations about subsequent cooperative ad campaigns.

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

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