Thursday, September 29, 2016

Settle for Being in the Top 10

Sometimes in retailing, as in the rest of life, the juice just ain’t worth the squeeze. My evidence today comes from six Seattle University, Utah State University, and Northwestern University studies involving more than 1,600 consumers. The finding was that shoppers are no more likely to buy from a store or buy a product in that store which is rated as “In the Top 9!” than “In the Top 10!” But wait, it gets even worse: People told a store or item brand was in the top ten were actually more likely to become customers than an equivalent group of people told the brand was in the top nine. Therefore, the extra effort to move up in the ranking was worse than wasted.
     The reason for this counterintuitive behavior has to do with the desire of consumers to simplify decision making. Round numbers are more comfortable than precise numbers, so create a more positive approach toward buying. This also is part of the explanation of another puzzling finding in those studies: People had more favorable impressions of brands described as “In the Top 9” than “Ranked as 9th.” Another part of the explanation for that one is the optimism of shoppers when it comes to what are called “tensile claims.” If you advertise “Up to 45% off regular prices,” people tend to think the item they’re seeking will be one of those tagged for the full discount. If you say, “It’s ranked in the top nine,” they’ll tend to think it’s even higher than rank 9.”
     Still, there are times when the juice is indeed worth the squeeze. What about fourth place? In Olympic competitions and horse races, we learn who came in first, second, and third, but beyond that, it’s a group of also-rans. The psychological distance between third and fourth is leagues larger than the psychological distance between second and third.
     In other types of ranking lists, there are also cut points. Researchers at Seattle University and Rutgers University-Camden found that on a “Top 50 Retailers” list, consumers are likely to see a bigger difference between ranks 10 and 11 than between ranks 9 and 10 and a bigger difference between ranks 25 and 26 than between ranks 24 and 25. So it might be worthwhile for a retailer to expend resources to jump a cut-point hurdle, but not cost-effective to move up without jumping a hurdle.

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

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Jump the Cut Point Hurdle
Advertise Tensile Pricing Selectively

Monday, September 26, 2016

Respond Selectively to Negative Reviews

With the proliferation of review channels and with everybody considering themselves to be an expert reviewer, it could consume too much of your time to swat at every fly. Better to respond selectively.
     How to select? Researchers at Louisiana State University, Fairfield University, and University of Alabama provide one indicator—the appearance of “negatively-valenced emotional expressions.” That’s the term the researchers concocted to cover the use of all caps, exclamation points, emoticons, or extreme language. Prospective customers place especially high trust in negative reviews posted online when the review is written by someone the reader considers to have expertise about shopping at the store and the reviewer uses NVEE.
     Those, then, are the negative reviews you want to select for your priority replies. Explain your perspective on the complaint or criticism and, if you’re making changes, specify what they are.
     Not responding to every negative review is challenging. The conscientious retailer can come to take praise for granted. This gives the criticism an unbalanced importance. We learn of a few criticisms and think this represents the views of a large number of people.
     To restrain yourself from overreacting to negative online reviews, realize that even the most biting critique of your retail business could bring profitable attention. Research supports this argument, with the condition that you openly welcome shoppers asking you about any of the points in the review.
     Studies at Georgia Institute of Technology and University of Pennsylvania plotted the relationship between controversy about a topic and the interest of people in talking about that topic. The finding is that as the amount of controversy increases, people do want to talk about it more.
     Thus, even a negative review of your business can draw people to tune into your social media channels and come into your restaurant, clinic, office, or store to hear your retort. Actually, consumers who are having a difficult time selecting between alternatives appreciate—and may even seek out—criticism of one of the products or stores. This helps the consumer make the decision.
     Acknowledge the negative review if asked about it. Researchers at European University Viadrina find that when a salesperson does this, the shopper becomes more likely to trust everything the salesperson says. Keep the words and logic simple. The researchers find that if there’s too much complexity, the shopper no longer hooks the acknowledgement of negative information to the salesperson’s credibility.

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

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Welcome Shoppers’ Questions About Negatives
Restrain Your Overreaction to Criticism
Prevent Store Brand Sabotage
Sell More by Being Less Certain

Thursday, September 22, 2016

Celebrate Shoppers Who Celebrate

Often, consumers who have surmounted a hurdle, such as graduating from their university, want to celebrate with a hearty party and an expensive purchase. When they come into your store, be ready to satisfy one or both of those wants.
     Researchers at University of Toronto, Hong Kong University of Science and Technology, and China’s Sun Yat-sen University say you can do a better job of it by determining why the consumer thinks they were successful. If they think it was more because of their special abilities than because of their hard work, suggest a distinctive product or experience. In the experiments, people who said, “I truly felt that I am superior to others,” or, “I felt my success is due to something born to me,” were more likely to choose a distinctive looking shirt or a less popular luxury coffee maker than were people who said, “I felt my success is due to my hard work,” or, “I truly felt that if other people devote the same amount of effort, they can be as successful as me.” In an example of their point, the researchers predict that when pride in the accomplishment comes from a belief in superior abilities, celebration at a restaurant will include limited-edition hand-crafted microbrews rather than doses of the signature best-selling cocktail.
     When a group, such as gathering of graduating seniors, is celebrating together, other psychological forces drive the purchase decisions. Whether a shopper is a variety seeker or conformist depends in part on the degree of conformity of others in the group. Again using the restaurant experience as an example, consider the findings of an observational study conducted with diners at Flam's in Paris by researchers from Sorbonne-Assas in France and University of Adelaide in Australia.
     The researchers found that when about 30% to 80% of a group had ordered the same choice, people placing their orders next tended to go along with ordering this choice for themselves. But once the conformity exceeded 80%, subsequent orders were much more likely to show variety seeking.
     If you're selling fancy bracelets or briefcases instead of brioche, or if you're doing business in Paris, Texas, instead of Paris, France, the percentages will probably be different. But in any case, do your merchandising and selling with the expectation you'll be having both conformists and variety seekers as celebrant shoppers. Welcome all, and remember to extend your sincere congratulations!

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

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Expect Shopper Conformity & Variety Seeking
Navigate Shoppers Toward Distinctiveness
Offer Variations to Ease Fear of Conformity
Distinguish Activity from Accomplishment

Monday, September 19, 2016

Shy Away from Frightening Off Introverts

Some shoppers don’t want to be bothered interacting with you. They’re shy. A bricks-and-mortar retailer can catch sales dollars from these introverts by maintaining an ecommerce presence. But study results from Temple University suggest a better strategy is to make in-store experiences more pleasant for shy shoppers.
     Those studies found that when online shoppers come to the store, such as to pick up items, they buy more. Impulse items, and tactile-appeal goods such as shoes and cosmetics sell better there. Exclusively online shoppers who were convinced to come to the physical store with a discount coupon yielded from two to eight times as much profit from sales. Contrast that with what happened for customers who lived a distance from the store and had shopped exclusively in the store. When these customers were incentivized to shop online, profits from those online sales were only half as much as with store sales.
     But this was with all customers, not just the introverted ones. How do we make the introverts more comfortable? Researchers at Université Paris Dauphine and PSL Research University suggest you begin by recognizing the situations the shy tend to shy away from:
  • Purchases of a type the shopper hasn’t made recently 
  • Purchases in which the shopper isn’t sure how long the transaction will take or how many subsequent visits will be required 
  • Situations in which the salesperson comes toward the shopper quickly, especially if the store layout makes it difficult for the shopper to move away 
  • The shopper is offered special treatment which singles them out 
     Look for signs of social anxiety in someone considering an unfamiliar purchase. If you do spot those signs, tell the shopper your estimate of how long a typical transaction takes and how many, if any, repeat visits to the store they should expect. Physically step away from the shopper briefly. If feasible, move to a less crowded shopping area or an area in which there is a large selection of products. Researchers at Columbia University and University of British Columbia found that crowded store spaces and limited product assortment heighten shopper discomfort. Verbally step back by softening the rhetoric. Researchers at University of Illinois and University of Louisiana found more sales resistance when using phrasing like, “It’s impossible to deny all the evidence that the TMX-890 is the only choice for you,” than with, “Purchasing the TMX-890 makes the best sense for you.”

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

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Utilize Multichannel with Hedonic Selling
Unbox the Resistant Customer
Intercept Shoppers Fruitfully
Beware Open Sell

Thursday, September 15, 2016

Tune In to the Supplier Channel Together

Just as in your relationships with your store customers, it’s best when your buyer-seller interactions with your store’s merchandise suppliers can emphasize common interests. Most obvious among those is the objective of selling lots of whatever your suppliers sell to you. And most obvious of the areas in which interests can diverge is when it comes to payment terms.
     There are also areas for potential disagreement which could stay hidden unless you tune in to them together with your suppliers. Retailing scholars at Cornell University and Arizona State University identified one example—the container size of consumer packaged goods. Their research showed how suppliers benefit when a store carries larger package sizes. The profit margin per unit is bigger. However, the small to midsize retailer does better to have smaller packages sizes. Smaller packages ease the customer shock from price increases, since the absolute dollar amount of the hike is less. The smaller package footprint allows a broader variety of items to be stocked on the shelves, so the retailer can satisfy the needs and desires of more people. And in general, consumers like the option of a range of package sizes, including small packages.
     Once you’ve surfaced these sorts of divergent interests, negotiate collaborative solutions. For influence in the negotiations, show your value to your suppliers. Based on Arizona State University research about influencing in retailing, here are three approaches:
  • Distinctiveness. What do you offer your supplier that other customers do not? If you are a multistore retailer, what you have is the ability to place especially large orders. If you’re an independent one-store business, you can offer a distinctive flexibility in choosing to showcase items the supplier wants to try out at retail. 
  • Expertise. You’re closer to the customer than is the supplier. What valuable advice can you provide about product complaints and market trends? 
  • Consistency. If you’ve been a reliable account, placing orders predictably and paying on schedule, be sure your supplier recognizes this. If you’ve agreed to use point-of-purchase displays, use them as intended and report the results. 
     Another set of ways to tune in together is to undertake collaborative projects. For instance, have suppliers train your staff and shoppers. Checking out the quality of the training is a chance to team up with retailers who operate businesses like yours. Ask the supplier to put you in contact with other retailers where the supplier has done training.

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

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Show Your Value to Your Suppliers
Have Suppliers Train Staff & Shoppers

Monday, September 12, 2016

Hover Within the Shopper’s Power Level

International cultures differ on something named Power Distance Belief (PDB) by researchers at University of Texas-San Antonio, Pennsylvania State University, and Rice University. The “power” refers to the degree of influence people have over others. The “distance belief” refers to the degree to which a consumer accepts that there are wide differences in the amount of power possessed by people.
     North American and European residents have low PDB scores, believing that in retail transactions, for example, the salesperson and the shopper deserve to have about an equal amount of influence. Still, the level of power your shopper feels can differ depending on personality factors like a desire for domination and situational factors like high or low expertise about a product or service category. Researchers at INSEAD-France, Northwestern University, and Columbia University find that, at least in France and the U.S., you’re more likely to make a sale when you position yourself at a point within the range of the power shown by the shopper.
     High-power persuasion transactions emphasize shows of competence, so when your shopper flashes competence, flash it back. Low-power persuasion transactions emphasize warmth, so when your shopper exudes warmth, generate it back. Other research finds that you can navigate toward the right power zone by phrasing you use. “At our store, you’re the boss” moves you toward lower power, while “At our store, we take care of you” moves you higher. To manipulate a sense of power for a sequence of consumer behavior experiments, researchers at Stanford University and Tilburg University had people sit on either a tall chair or a low ottoman.
     Researchers at Cornell University and University of Michigan showed some study participants pictures of SUVs facing directly toward the viewer, while others were shown side views of the vehicles. The consumers seeing the head-on perspective gave higher average ratings of the SUV on words like “dominant” and “powerful.” Then another set of study participants, asked to assess the status and power of the SUV’s owner, were more likely to say “high status, high power” if shown the head-on view of the vehicle than if shown the side view.
     When the same experiments were done with pictures of family sedans, there were no differences in the degree of rated power for the car or for the owners. The conclusion: People seeking the product associated with power will get more interested if the view is head-on.

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

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Yield to Power Distance Belief
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Thursday, September 8, 2016

Threaten Gently, Praise Vigorously

Persuading a consumer to make a change often involves both praise and criticism. Praise for what they’ve accomplished so far and the acceptance they’ve shown. Criticism—in the form of warning about bad consequences—for not having accomplished more or not having made a decision to comply.
     Researchers at Northeastern University, Ben-Gurion University of the Negev, and Vrije Universiteit Amsterdam recommend you praise vigorously and threaten gently. They explored the degree of compliance for three persuasion objectives:
  • Watching a video about how to plan for retirement 
  • Signing a petition in support of improving water purity 
  • Washing hands thoroughly after using public toilet facilities 
     With vigorous praise and gentle threats, participants in the different studies were more willing to watch the retirement planning video, sign the petition, or use ample amounts of soap compared to the participants in equivalent persuasion conditions who received gentle praise and vigorous threats.
     The optimal degree of message assertiveness also depends on the nature of the persuasion objective. Researchers at Georgetown University and Ben-Gurion University found that highly directive sales messages work fine if the products or services bring happiness. The happiness might come from immediate sensual pleasure. The salesperson for the spa says, “You belong on our massage table.” Or the happiness might come from an anticipated sense of accomplishment. Running the marathon in Nike shoes qualifies under this prong, and so the Nike slogan, “Just Do It,” works.
     Contrast this with what would happen at a bank where the staff wants to store your money. In the Georgetown/Ben-Gurion study, some participants read a message encouraging them to try a chocolate treat. The other participants’ message encouraged them to open a bank account.
     Those in the first condition responded best to an assertive message, “You must try our chocolate.” Those with the bank message responded best to a non-assertive pitch, “You could open a bank account with us.”
     And the optimal assertiveness of a threat to someone engaging in bad behavior depends on abuse severity. Researchers at High Point University and Bradley University worked with people who texted while driving and with another group who gambled excessively. Those who lightly engaged in the problem behavior responded best to sales presentations that portrayed the negative consequences of continuing. For heavy abusers—those who might be considered texting or gambling addicts—behavior change was better when the persuasion pointed out benefits of cessation for people like them.

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

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Toss Positive with Heavy Abusers
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Monday, September 5, 2016

Contribute Vicarious Gratitude to Customers

Multiply the impact of your store’s charitable contributions by encouraging customers to also contribute. That only makes good sense, I realize. Still, perhaps you’ll be taken aback when learning that your encouragement of customer contributions yields bonus results—increased purchase intentions at your store—if the charity you select is not a tight fit with the personality of your retail business.
     The explanation begins with University of Michigan findings that under certain circumstances, the customers of a retail business build gratitude toward a charity when they discover the business has made a donation to the charity. This gratitude leads to the customers wanting to make their own contributions. The circumstances are when the customers believe that the business is socially responsible and the contribution is more than a token amount.
     It is a vicarious gratitude, experienced by the customers at that point not because of their own actions, but instead because of the actions of the store, which signal gratitude toward the charity.
     The sequence is especially likely in senior citizens. Seniors like to give their business to retailers who are compassionate, and they like to view themselves as generous. One dynamic behind this is a desire to leave behind a legacy of love. Maybe behind this, in turn, is a calculation of what will be required on the résumé submitted at the Pearly Gates. A related dynamic is a sense among senior citizens that they want to compensate for other, less positive, legacies their generation seems destined to leave behind—-stupendous government deficits and possible fallouts from global warming, for instance.
     The seniors want to personally participate in the giving, and this fact gets us closer to explaining why it works best when the charity receiving your donation is not a tight fit with your store’s personality. The reason is that this gives the consumers more of a sense of personal participation in helping the cause. They feel noble, and a sense of nobility has been found to increase purchase intentions. This tip for the bonus benefit is courtesy of studies at North Carolina State University and University of South Carolina.
     If luxury stores include a symphony orchestra or art exhibit among their partners, they should also highlight continuing association with a charity providing food, shelter, and education to disadvantaged populations. On the other hand, stores selling commodities should include among their charity partners causes which promote self-enhancement.

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

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Help Older Customers to Help Others
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Thursday, September 1, 2016

Involve the Shopper in Your Story

A good story beats out bare numbers in making the sale. The magic of stories is called “transportation” by consumer psychologists. The shopper is transported into the tale. But a set of researchers at Hofstra University and Virginia Tech caution that you must be sure to include the shopper in the trip. Give listeners ample opportunity for retrospective reflection, in which they can think and maybe talk about how their own experiences resemble those in the tale the retailer is telling.
     This means you shouldn’t rush the narrative. Still, keep the story concise. Otherwise, you’ll irritate busy shoppers and lose the attention of others.
     A concise story is easier for the shopper to appreciate when it follows a familiar trajectory. That lets the listener fill in missing parts. The process stimulates retrospective reflection.
     Author Christopher Booker contended every compelling story is a variation on one or more of seven familiar trajectories:
  • Overcoming the monster. In this plot the underdog prevails because fate favors them. 
  • Rebirth. What has been lost is ultimately regained. 
  • Quest. Retailers who talk about continuous improvement are telling consumers of a journey which could easily go on forever. Quest plots grab the attention of people who put top priority on products and services which help them achieve more than they have now. The never-ending quest intrigues those seeking never-ending gains. 
  • Journey & return. The characters in the story end their expedition rather than going on forever, and they come back changed. This plot line combines escape with magic. Special promotions and events in your store can cast magic spells for escape benefits. 
  • Rags to riches. This plot line celebrates perseverance, which fits well for retailers who profit by having customers save money instead of spending money. These are the insurance agents, CPAs, attorneys, banks, and others who provide financial planning services. 
  • Tragedy. So much can go wrong in life, your tale warns the consumer. Tragic stories can grab attention. Research at Universidad Pùblica de Navarra in Pamplona, Spain concludes that for certain shoppers in the world, fear sells, but for others, it’s a turnoff. How to tell which is which? Monitor the extent to which your shopper uses fear words themselves. 
  • Comedy. Humor heads off mental counterarguments. The shopper is too busy chuckling to challenge the sales pitch. A common rhetorical device for humor is incongruity: A single element is way out of place in an otherwise sensible story. 

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

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Craft Powerful Stories
Post Dramatic Tales for Post-Experience Goods
Plot Your Way to Profitability