Friday, November 29, 2019

Premiere Items with Gifts for Preorders

When introducing a new item to your audience, you can benefit from preorders. Kicking off with a bundle of sales builds buzz to motivate further sales. And the revenues before the item even appears provide a cushion for recovery in case the new item flops. Encourage preorders by telling shoppers they’ll be among the first to have this state-of-the-art version in their hands.
     You also might grant a substantial discount off the price you’ll be regularly charging, or you might offer a special free gift at the time of the preorder. Researchers at Purdue University Northwest, The University of Memphis, Westfield State University, and University of Nevada‐Las Vegas find that how these incentives work depends on the length of time between the preorder and the promised delivery of the item.
     When this interval is relatively short, a larger discount produces more preorders. A preorder discount of 22% on a portable printer produced greater intentions to purchase than did a 7% discount if the product was due in one week. But when a different set of consumers were told the launch date was six weeks off, those offered the 22% discount did not show a higher preorder purchase intention than did those offered the 7% discount.
     An explanation for this curious finding has to do with the difference between search goods and experience goods. Search goods have features, the value of which can be relatively easily assessed before purchase. The values of experience goods are more difficult for the shopper to assess until they’ve been used. Because the preorder is being placed for a previously unavailable item, a high price discount could arouse perceptions of inferior quality. Much prior research has shown that when an item is purchased for immediate delivery, feasibility—such as a low price from a high discount—carries particular weight. But when delivery is in the further future, perceptions of item quality predominate.
     If an incentive you’re offering for preordering is a price discount and the delivery time is a number of weeks off, improve your revenues by keeping the amount of the discount modest.
     But the researchers found that when the incentive was a free gift, offering a higher value produces stronger purchase intentions for both long and short intervals until delivery of the preordered item. Here you’ll do best by balancing the value of the free gift against the increase in preorders you observe.

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Commit Shoppers from a Distance for Expenses
Post Dramatic Tales for Post-Experience Goods
Moderate Discounts to Project Quality
Change Up with Entitled Customers

Monday, November 25, 2019

Fret Less About Seniors’ Regret

We all have regrets. But according to a group of psychologists at Stanford University, people become less disturbed by their regrets when late in their lifespan. Rather than experiencing only despair and wistfulness about mistakes made, the elderly are likely to also experience positive emotions. These might include gratitude for lessons learned or pride at having moved on from the setbacks, for instance.
     In the studies, the ages of the 629 participants ranged from 18 to 92 years and the sample was selected to be representative of U.S. Census benchmarks by age and gender. Some participants were asked about a major life regret, while others were asked about a regret which occurred within the past year. This was done to equalize the exploration of emotions across the age range because the psychologists recognized how the longer you’ve lived, the more opportunities you’ve had to accumulate regrets.
     Considering this care exercised in conducting the study, I believe the conclusions can be applied to both action regrets—thinking about what the person did—and inaction regrets—thinking about what they failed to do. It can be applied to major decisions which the senior later decides led to long-term disadvantages and for decisions as minor as a purchase which the senior wishes they’d passed on.
     So marketers should not worry that justified decisions they’re persuading seniors to make are likely to be mistakenly regretted by those seniors later. At the same time, though, marketers need to protect seniors from making the sorts of decisions which should be regretted later. Older people can complete transactions with an excess of impulse. It has to do with the trouble the aged brain has in filtering out irrelevant signals and in keeping focus.
     Compared to younger shoppers, seniors spend less time and attention on gathering detailed information before decisions. But along with this, they are less likely to complain and more likely to accentuate the positives after making a bad buy. Even when dissatisfied, they tend to return to the same set of merchants and shop for the same brands. Familiarity is appealing, and memory is often flawed. Studies find the habits to be so strong that even when there is evidence of harm from a product, senior shoppers usually have to be assertively steered away from repeat purchases. The helpful guidance which regret provides in the younger consumer is too often overlooked by the elderly.

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Embrace Sadness in Marketing to Seniors
Shower Cold on Regretful Customers
Keep Senior Shoppers From Worst Impulses

Friday, November 22, 2019

Poke Sedentary Seniors’ Assets

A group of researchers at Ghent University in Belgium refused to sit still for seniors just sitting still. They realized how at least a moderately vigorous level of physical activity for at least an hour most days protects against unnecessary disability. Fewer than 20% of adults over age 60 meet the standard. The World Health Organization has declared increasing that percentage to be a public health priority.
     How do we persuade sedentary elders to start exercising and then keep at it? The researchers decided the answer begins with discovering why seniors who are fully capable of moving around do no more than sit around instead. A total of fifteen studies about that topic were reviewed, covering seniors ranging in age from 63 years to 79 years in the United Kingdom, Canada, the U.S., and Belgium.
     The first overall finding was that seniors often fail to realize how much of their time they are sitting around. A logical remedy, then, might be to encourage seniors to schedule times to vigorously exercise. For many of the seniors in the studies, weather is a limitation. A successful schedule will provide for alternatives to going outside when weather conditions are bad.
     But it isn’t so straightforward. You see, there is the matter of falling straight forward, or backward, or sideways, or, more precisely, fear of falling. Many of the seniors said they’d slipped into the habit of being sedentary after having taken a spill. The answer here might be to teach both ways to maintain your balance and to take a fall. Reassurance could come from checking for disorders such as osteoporosis and in providing mobility aids such as a walker, if indicated. Fatigue propensity is a consideration. Program exercise for the morning rather than late afternoon.
     Seniors are more likely to exercise when they are around others, so arranging for companionship helps. But the expectations of those others are a factor. A number of the seniors who were studied said that they perceived society expects them to sit as their primary mode of living. At the same time, some seniors said that they don’t go out into their neighborhoods because there aren’t enough places along the way to sit if they get tired. Longer term solutions to the problem of seniors being sedentary should include persuading those around the seniors to encourage them to exercise and persuading public facilities to install benches.

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Inspire Seniors with Interval Training
Vaccinate to Encourage Seniors’ Vaccinating
Help Seniors to Shop Early
Media-Chat with Seniors
Forget Stereotypes of Seniors’ Memory Deficits
Feel Easier for Seniors with Biophilia Design

Monday, November 18, 2019

Level Option Expectations in Customization

Shoppers are attracted by the possibility of customizing a product or service to fit their particular needs and desires. But those same shoppers can feel overwhelmed when a great many categories of options and options within each category are available. A straightforward way for a seller to address this conundrum is to guide the shopper through the choices step-by-step. In selecting a laptop computer, the shopper could first be asked about operating system, then after that choice is made, asked about memory capacity, and so on.
     Unfortunately, this technique frequently has an effect opposite to what’s intended. It turns the shopper into a maximizer. Maximizers are consumers who want to hold out for the best possible alternative, with the result that they’ll delay or even walk away from purchase decisions. Further, when people in a maximizing mindset do buy the item, perhaps because they have a pressing need for at least some alternative, they leave the transaction feeling frustrated.
     Studies at University of Denver and University of Florida indicate that the step-by-step method works best with shoppers who have given evidence of satisfaction with products which are good enough and with products in which objective ratings are lacking. When there are clear objective ratings for the options in each category, a matrix presentation works well. Here a table of all the categories and all the options within each category are presented at once to the shopper.
     If you’ve concerns about the step-by-step bringing out maximizing tendencies, level the option expectations. Give good points about each alternative. First, this helps the shopper feel good about whatever choice they make. Second, it makes the decision more challenging. Maximizers feel better when important decisions are at least a bit difficult.
     Researchers at University of Alberta and University of St. Gallen evaluated another technique for avoiding the problem: Develop a limited number of combinations of the major item attributes, then encourage the shopper to choose one of these and personalize using the other attributes.
     With shirts, automobiles, vacation packages, jewelry, and financial products, the researchers identified clear benefits of this customization via starting solutions. Compared to use of a step-by-step or matrix method, purchasers were more satisfied with what they ended up buying and found more mental stimulation in using the items. The businesses using this method were pleased how customers selected a greater number of item features, resulting in a higher-dollar transaction.

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Absolve Maximizers of Solely Absolutes
Look Simple, But Offer Complexity
Tempt Shoppers with a Template

Friday, November 15, 2019

Handle Controversy in Retail Performances

Even today, the Gettysburg National Military Park is a site of battles. Gratefully, not the tragic Civil War confrontations in which about 23,000 Union soldiers and 28,000 Confederate soldiers lost their lives over a three-day period. Rather, it is the battling perspectives among groups of visitors to the historic attraction. In general, white visitors with firm roots in the heritage of the American South view Gettysburg much differently than do visitors with allegiances to a different geography.
     Researchers at California State University-Stanislaus investigated how tour guides handled these controversies in ways designed to make the visits stimulating, but pleasant, for visitors. The research findings might best be understood in a framework of the tour guides staging a performance for the visitors. What worked in those performances yields ideas for any retailer navigating differences among consumers’ ideologies.
     The essential objective is to avoid an escalating spiral of confrontation. The Gettysburg tour guides most successful in this start by establishing authority. Confidently providing factual information worked well. Authority via expertise is vital when consumers come convinced of mistaken beliefs.
     The next steps consisted of controlling the narrative by instructing visitors to look at specific artifacts or signage while the tour guide told a relevant story. This is easier when the servicescape—the physical environment in which the performance is taking place—quickly projects certainty without indicating dogmatism.
     Acknowledging different perspectives is also helpful. One cadre of park employees, while wearing costumes associated with events in the history of Gettysburg, involves visitors in reenactments. Respect for the allegiances and knowledge of the visitors is important. A common complaint from visitors is that there aren’t enough Southern artifacts. In interviews by the researchers, a few visitors expressed disappointment that one of the cannons on display had “1864” inscribed on its muzzle. The Battle of Gettysburg occurred in 1863.
     Highlighting commonalities helps smooth outrage. Tour guides are instructed to emphasize stories about the courage of the soldiers more than stories based on numerical details of battles. Statues and memorials are used as prompts and props for these stories. Scripts used by the guides highlight that all the soldiers fought for a cause they considered to be noble.
     Lessons from all this apply beyond the frontline employees at Gettysburg National Military Park. Talking about commonalities, using stories to guide impressions, and establishing authority through expertise work well in any retail situation when calming unruly controversy.

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Use or Sidestep Political Polarization
Convert Controversy to Retail Sales
Prop Up Frenzy with Pop-Up Servicescapes?

Monday, November 11, 2019

Neglect Overprotectiveness of Seniors

In serving the needs of aging adults, we’ll sometimes be asked to accommodate what we consider to be excessive risk. Maybe it’s the elderly man who wants to purchase a cane, but would be safer with a walker. The 80-year-old woman looks to be in excellent physical condition, but she’d be by far the oldest person you’ve ever guided on the adventurous travel tour she’s selected. A resident of an assisted living facility has asked you to arrange for her to celebrate her birthday with champagne, but your records indicate that she’s not to have alcohol.
     Joseph Ibrahim at Monash University has been probably the best-known proponent of the “dignity of risk” in these sorts of situations. His argument is that we providers to the elderly should ensure informed consent, but even cognitively impaired seniors usually have some capacity for expressing their preferences and making decisions. Get signed waivers if necessary, but shun overprotectiveness. Encourage elderly adults to step out from any excessively cautious self-imposed limitations. Allow them to experience the thrills from fulfilling their wishes, even in the face of possible injury or perhaps expedited death.
     This argument makes sense within what’s known about the psychology of seniors. As we get older, we do become increasingly cautious. Caution serves us well when it comes to avoiding scams, but not when it comes to avoiding risks in ways which lead to sadness.
     Attention to the dignity of risk does fit a zeitgeist in society. From the two old skydiving guys in year 2007’s “The Bucket List” up and through the squad of old cheerleading gals in year 2019’s “Poms,” the message of grab it before you’re gone prevails. There’s an important difference between those movies, though. In the first, both protagonists are already terminally ill and the physical danger in their escapades is high. In the second, only one protagonist has the bad medical prognosis and the dangers include ridicule as much as broken bones. The spirit of the times is that you no longer need to be facing imminent death in order to take inordinate risks.
     Contemplate how much of that spirit you choose to inspire you, though. I admit Prof. Ibrahim might be taking it too far. The lead sentence in a policy paper he co-authored advocating for the dignity of risk in serving the aged reads, “Live fast, die young and leave a good looking corpse.”

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Retire Impatience with Seniors’ Price Decisions
Protect Customers From Dangerous Decisions

Friday, November 8, 2019

Envision How Envy Affects Shoppers

Envy motivates buying. But which items are most likely to be purchased depends on the nature of the envy. Benign envy occurs when a shopper feels that someone with advantages over them is justified in having the advantage. Malicious envy occurs when the shopper believes the someone isn’t.
     Your conversations with a shopper might allow you to determine which of these the shopper is experiencing. Statements like, “I admire that person,” and, “I think I could do that if I try,” signal benign envy. Statements like, “There must have been some cheating, since they don’t have the talent,” “What’s the use of trying?” or, “What they have isn’t really worth my effort,” indicate malicious envy.
     According to studies at University of Cincinnati, University of Miami, and University of Florida, both benign and malicious envy motivate consumers to purchase self-improvement items. Those feeling benign envy are more likely to want to improve in the domain in which the other person has the advantage. If the other person got a job the shopper wanted, benign envy narrows focus onto products and services which build skills for that specific job. On the other hand, malicious envy shifts the spotlight toward cultivating competencies for a related type of job. Appeal further to malicious envy by describing the ease of mastery of the product or service.
     Envy applies to possessions as well as accomplishments. When a shopper believes the other person earned the right to the advantages of owning the product, that shopper is willing to pay a premium for owning the product themselves. The extra money is like a tribute to the respected person. In those studies, people who had this benign envy of someone owning an iPhone, for instance, were willing to pay an average of €80 extra for their own iPhone.
     What about the shopper who believes the other person doesn’t deserve the good fortune? There is then a desire to show how what the other person has isn’t so great, after all. In the studies, people with this malicious envy were also willing to spend more money, but only on a competing product.
     Envy of either type can be aroused temporarily, and maybe unintentionally, in the service situation itself. Researchers at Hong Kong Baptist University, University of Hong Kong, and Hanyang University ERICA saw it happen when a customer witnessed others receiving special benefits because the others were premium customers.

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Wriggle Along with the Wrinkles of Aspiration
Redirect with Evil Envy
Stay Aware of the Drive to Share

Monday, November 4, 2019

Assure Consistency By Using Uncertainty

Repetition and predictability are valuable to a marketer. We want our customers to come back again and again. If we can anticipate what they’re likely to buy and what sorts of discounts will be most attractive to them, we can optimize our efforts.
     Researchers at University of Chicago, Carnegie Mellon University, and Chinese University of Hong Kong saw how repetition, and therefore predictability, increase when there is some uncertainty in the payoff of a transaction. The resolution of the uncertainty, in itself, provides pleasure. In one of their studies, consumers who weren’t sure if they’d receive a 5¢ or 10¢ cash-back coupon were more likely to continue making purchases than were consumers who knew they’d receive a 10¢ cash-back coupon.
     Other research by the University of Chicago and Chinese University of Hong Kong group showed that uncertainty also can motivate effort. Imagine yourself a participant in an experiment in which you’re asked, “How much effort are you willing to exert for a bag of Godiva chocolates? Oh, before deciding how hard you’ll work, you want to know how many chocolates are in the bag? Well, it’s either two or four.”
     Study participants given instructions like that worked noticeably harder than did another set of participants told that the bag was guaranteed to contain four chocolates. The researchers had parallel results when offering one group a guaranteed reward of two dollars and the other group only a guarantee that it would be either one or two dollars.
     The researchers point out that uncertainty motivates well only if it is resolved quickly. In times of high turmoil or when a transaction already involves considerable risk, don’t introduce prolonged uncertainty about the payoff. People going to the dentist or an auto repair shop prefer to know the parameters of the pain.
     At the other extreme, when the consumer’s involvement in a transaction is low, adding uncertainty can grab attention. Research findings from Indiana University and University of Colorado-Boulder indicate the value of a mystery ad format, in which you wait until the end to announce the retailer’s name. Start off with an unusual story which dramatizes the category of retailer, but hooks the ad’s audience into thinking “Who’s this commercial for, anyway?”
     Mystery ads were significantly more effective than traditional ads in making the name-category link memorable. Again, don’t sustain the mystery for too long. Announce the name at the end boldly.

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Encourage Category Consistency Time-to-Time
Tickle with Uncertainty
Sustain Mystery, But Not for Too Long
Kick the Sale with Curiosity
Worm Your Way into WOM with Self-Discovery

Friday, November 1, 2019

Reveal Limitations of Mystery Shoppers

The money and trust devoted to mystery shoppers by finance, telecommunications, travel, hospitality, motor dealership, and other retail organizations is worse than wasted. The results can mislead marketers. Those are the conclusions from studies headquartered at University of Zurich and Reutlingen University, which found that mystery shopper ratings did not predict well either customer satisfaction ratings or sales results.
     While pretending to be typical customers, mystery shoppers visit service points. They use systematic protocols to record their observations, which they summarize and report to the client.
     Some older studies said that the use of mystery shoppers did improve the quality of customer service, but mostly in the short-term. Perhaps this was because store associates were on good behavior, knowing that they could be secretly rated at any time.
     Why don’t mystery shopper programs do better?
  • The projects generally include two to four visits. Prior research suggests that at least twenty visits are necessary for valid conclusions. Further, the individual mystery shoppers may not be representative of the actual target populations of customers. Even if they are selected to be demographically similar, they don’t have the same emotional investment in considering purchase options. 
  • Professional mystery shoppers make it a point to record separately their assessments of each encounter during each store visit. The greeting upon entering the shop might have been superb, but the wait to get help from a salesperson was excruciating, and the experience when paying for the merchandise was only acceptable. Typical shoppers don’t dissect their judgments in this way. Instead, they remember and talk about salespeople with overall impressions along only two principal dimensions—interpersonal skills and product expertise. Moreover, researchers at University of Texas-San Antonio and University of Virginia find that those overall impressions are influenced by whether the shopper is accompanied by others. A mystery shopper makes their visit by themselves. 
  • Based on the behavioral assessments, professional mystery shoppers are expected to answer questions in the format, “What are your opinions of the store?” Researchers at University of California-San Diego and Northwestern University find that building a profitable relationship with customers is more likely when asking questions instead in the format, “What items of advice do you have for our store?” Advice questions lead to purchase intentions. 
     Without you correcting for such problems, a mystery shopper program might yield leads to explore. However, I recommend against you making strategic decisions depending solely on mystery shopper reports.

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Track the Trajectory of In-Store Impressions
To Build Loyalty, Ask Advice, Not Expectations
Demystify Mystery Shopper Review Oddities
Tally the Costs of Customer Service